Report: For profit colleges not worth the cost

Senator Tom Harkin, D-IA, speaks at an event to kick of a day of lobbying in support of the Employee Free Choice Act September 10, 2009 in Washington, DC.

Jeff Horwich: Senator Tom Harkin is out today with a scathing report on for-profit colleges. The report says taxpayers spend billions of dollars a year on those schools. But students often leave deep in debt.

From the Marketplace Education Desk at WYPR in Baltimore, here's Amy Scott.

Amy Scott: As chairman of the Senate Education Committee, Iowa Democrat Tom Harkin has spent two years investigating for-profit colleges. His final report documents a litany of abuses.

Tom Harkin: Exorbitant tuition, aggressive recruiting practices, abysmal student outcomes, taxpayer dollars spent on marketing and profit. And these aren't exceptions. That is the norm.

For-profit colleges make most of their money from federal financial aid programs. In the 2009 and 2010 school year, that amounted to $32 billion.

Harkin says they spend more of that money on marketing and recruiting than on instruction.

Harkin: Federal money should be spent on education. Not advertising, not recruiting, not lobbying.

The Association of Private Sector Colleges and Universities -- and Republicans on the education committee - called the report biased, and took issue with a number of its findings.

For example, the industry says it has a higher graduation rate than reported.

Harkin's report recommends forbidding schools from using federal funding for marketing and recruiting.

I'm Amy Scott for Marketplace.

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.


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