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Are for-profit colleges taking low-income students to the cleaners or helping them improve their lives? That question led to a U.S. Senate hearing today. It's the third in a series of hearings investigating why so many for-profit students can't repay their federal loans.
As NPR's Larry Abramson reports, the issue is becoming increasingly partisan as the November elections approach.
LARRY ABRAMSON: Iowa Democratic Senator Tom Harkin says before he proposes any action, he wants to find out the truth about whether for-profit colleges are cheating students. But this third in a series of hearings on the issue led many to believe he's already made up his mind.
Harkin led off the hearing with his own report documenting that students at private, for-profit schools borrow too much money.
Senator TOM HARKIN (Democratic, Iowa): Ninety-five percent of for-profit college students borrow to attend school - 95 percent - compared to just 16 percent of community college students.
ABRAMSON: Harkin explained that students borrow most of that money from the federal government. Taxpayers should care because they take the hit if students can't pay. And Harkin says for-profit students should care because they may be borrowing to pay for programs they're unlikely to finish.
Sen. HARKIN: Fifty-seven percent of students withdrawing within the first two years, based on self-reported numbers by the institutions themselves. Now, these students take with them thousands of dollars in student loan debt.
ABRAMSON: These hearings have given new urgency to regulations proposed by the Department of Education. They would limit access to student loans for for-profit schools that leave their students hanging.
Kathleen Bittel told the Senate Health and Education Committee, schools do deliberately mislead students about their job prospects. Bittel is currently on leave from Education Management Corporation, which owns the for-profit Art Institutes.
Bittel says she may not be able to return to her job because she's blowing the whistle.
Ms. KATHLEEN BITTEL (Career Services, Education Management Corporation): In fact, I stand to lose everything by coming here to see you today.
ABRAMSON: In written testimony, Bittel said Education Management employees had falsified employment reports. For example, she says students only needed to work for one day to be counted as employed for the company's self-reported statistics.
Bittel says the government needs to keep these companies honest.
Ms. BITTEL: Across-the-board criteria for just what constitutes a job placement needs to be developed and enforced, so that these commonplace tricks to justify employment can no longer exist.
ABRAMSON: Education Management said it has tried to investigate Bittel's allegations, but that she refused to cooperate.
Most of the Republicans on the Senate Health and Education Committee did not hang around for much of the hearing. Chairman Harkin explained the Senate had adjourned yesterday, so members might have left town.
But ranking Republican Mike Enzi of Wyoming, indicated the minority was in fact protesting what he said was a one-sided investigation. Why, Enzi asked, wasn't the committee investigating low graduation rates that plague many not-for-profit schools?
Senator MIKE ENZI (Republican, Wyoming): If we want to make sure that students have access to high-quality college education and make higher education more affordable, why are we not looking at these problems throughout higher education?
ABRAMSON: The Republicans who did stay were at pains to say this hearing shows how eager Democrats are to interfere in this free-market activity.
North Carolina Republican Richard Burr said if the Department of Education limits access to federal loans, the next step might be telling returning veterans where they can study.
Senator RICHARD BURR (Republican, North Carolina): No, you can only use that GI money where we say you can use it. You can't use it to go to the NASCAR two-year institution that teaches you to be a mechanic.
ABRAMSON: Chairman Harkin indicated he was surprised to see this is becoming a partisan issue. The only real surprise out there will be how many schools really will close down, as they claim they will, if the Department of Education goes ahead with its proposed crackdown.
Larry Abramson, NPR News, Washington.
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