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For-profit colleges ramp up resistence to Harkin-led oversight
The for-profit college industry boosted its lobbying efforts this year in response to moves by U.S. Sen. Tom Harkin, D-Iowa, to increase regulation on the institutions.
Ten education companies and their trade association spent $3.8 million on lobbying in the first nine months of 2010, up from $1.5 million in the comparable period last year, according to reports filed with Congress.
Harkin initiated the debate over private sector higher education earlier this year when the Senate committee he leads issued a report detailing risky lending to for-profit college students. Students at schools like Iowa-based Kaplan University rack up huge federal debt loads, but their degrees often don’t earn them big enough paychecks to pay that debt down. As many as 40 percent of for-profit college students will eventually default on their federal debt, one report suggests.
The industry is launching a lobbying burst to resist the gainful employment standard proposed by the U.S. Department of Education. Under that plan, students at schools where grads don’t land good jobs wouldn’t be eligible for federal loans. Losing federal loan eligibility would likely be damning to most for-profit schools because they often aim to attract low-income students.
Still, $3.8 million for lobbying over nine months is relatively meager in an industry where corporations often spend more on marketing than on education. For example, Bridgepoint Education Inc., which owns Ashford University in Clinton, spent almost $150 million on marketing in 2009. Meanwhile, the company spent only $120 million on “instructional costs.”