Senate explores value of for-profit colleges
College Graduation Caps
TEXT OF STORY
Bill Radke: Today, the U.S. Senate starts taking a closer look at for-profit colleges and universities. Many of them get more than 90 percent of their funding from the government. Marketplace's Eve Troeh reports lawmakers are questioning whether students are getting a good return on that investment.
Eve Troeh: Enrollment at for-profit colleges more than tripled in the past decade. A lot of that growth has been funded by taxpayers. Iowa Senator Tom Harkin says the government puts $20 billion a year in the industry by way of Pell Grants and federal student loans.
Tom Harkin: Are students being served well? Are they getting good value for the taxpayer's dollar?
Harkin says the Senate will hear from students who took out lots of loans and either didn't get degrees or failed to land the types of jobs needed to pay back the money. Now they're defaulting on their debt.
Harkin: The government is garnishing their wages.
Harris Miller: The default rate has nothing to do with the type of ownership structure of a school.
Harris Miller is president of the Career College Association, which represents for-profit schools.
Miller: It has to do with the demographics of the student population.
He says for-profit schools serve many low-income and minority students. He says as the government aims to expand higher education to those communities, it's going to have to take on more financial risk.
I'm Eve Troeh for Marketplace.