Lawmakers Call for GAO Probe on For-Profit Colleges

By Caralee J. Adams — June 23, 2010 1 min read
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For-profit colleges are under the microscope again.

This time, Democratic lawmakers are asking the Government Accounting Office to assess the quality of for-profit institutions and look at how much of their revenue is from federal funding sources, including student aid.

On Monday, Rep. George Miller (D-Calif.), chairman of the House Education and Labor Committee; Sen. Tom Harkin (D-Iowa), chairman of the Senate Health, Education, Labor and Pensions Committee; Sen. Richard Durbin (D-Ill.); and Reps. Timothy Bishop (D-N.Y.) and Ruben Hinojosa (D-Texas) requested the probe by Congress’ investigative arm. (See letter.)

This sector is of particular interest to lawmakers as it accounts for less than 10 percent of total enrollment but gets about 25 percent of all federal student aid, according to the letter. The review is to look at the structure and governance of the institutions, quality of programs, completion rates, job-placement rates, and student-loan indebtedness. The GAO will also examine whether there are sufficient safeguards to protect against waste, fraud, and abuse in the federal student-aid programs and how much of proprietary institutions’ revenue is comprised of federal sources.

Tomorrow, hearings on for-profit colleges are slated to begin on Capitol Hill. The industry is facing increased oversight with new proposed regulations introduced last week related to the way colleges recruit students. (For a past post on the topic, click here.) The scrutiny has brought swift reaction from the higher education community.

Part of the attention is driven by student-loan default rates, which are on the rise particularly for those attending for-profit institutions.

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A version of this news article first appeared in the College Bound blog.