Harkin: For-profit colleges' dropout rate tops 50%

By Nick Anderson
Friday, October 1, 2010

A leading Senate Democrat said Thursday that data obtained from a sampling of for-profit colleges show that more than half of their students drop out without earning a degree or certificate.

Industry officials immediately disputed the analysis, which Sen. Tom Harkin (D-Iowa) released during a hearing on for-profit colleges that Republicans called unfair and one-sided. The Obama administration is attempting to tighten regulation of the industry, which relies on federal student aid for much of its revenue.

"The bottom line is this: For students enrolling in for-profit schools, graduation with a degree is a possibility, but debt without a diploma is a probability," said Harkin, chairman of the Committee on Health, Education, Labor and Pensions.

Of about 960,000 students who enrolled from July 2008 through June 2009 in schools run by 16 for-profit companies, data show that 57 percent had withdrawn from school as of August 2010, according to Harkin.

Sen. Mike Enzi (Wyo.), the committee's ranking Republican, said Harkin should turn his scrutiny to public and nonprofit schools as well. "It's naive to think the problems are limited to just the for-profit sector," Enzi said before he walked out in protest.

Harris Miller, president of the Association of Private Sector Colleges and Universities, said Harkin's analysis should receive an independent review. He said the industry is meeting the needs of the vast majority of its students, many of them low-income adults seeking to get ahead in life.

Last week, the Obama administration postponed final action on proposed regulations but warned that it would move forward in early 2011 with a rule meant to ensure that students in career-education programs - at for-profit, public and nonprofit schools - secure "gainful employment" and are not overloaded with debt.

For-profit schools say the proposal could have severe repercussions for the industry. Federal officials estimated enrollment at for-profit colleges at 1.8 million students in 2008.

(The Washington Post Co. operates for-profit colleges through its Kaplan Inc. subsidiary and owns more than 8 percent of the stock in for-profit Corinthian Colleges.)

On Wednesday, several hundred students from such schools, as well as others connected with the industry, rallied outside the Capitol to protest the Obama administration proposal.

On Thursday, Harkin heard criticism of the industry from a Kaplan nursing student in Iowa and from a career-services employee of higher education provider Education Management Corp.

Danielle Johnson, 37, of Tama, Iowa, said a Kaplan admissions officer misled her into thinking that after she began her studies in Cedar Rapids she could do a significant amount of her clinical training closer to her home. She said she later discovered that was not possible, but only after taking out $9,600 in student loans."This has been a very disheartening experience," Johnson said.

Kaplan said in a statement that federal privacy laws "prevent us from providing personal information on any single student. However, what the student presented today is not substantiated by the facts. We're very proud of our practical nursing program, in which the Cedar Rapids campus enjoys a 92 percent job placement rate."

Kathleen A. Bittel said Education Management Corp. was trying to "lend credibility" to its schools by allowing them to claim large numbers of graduates working in their fields. "But these are not realistic numbers that are being reported," Bittel said. She said that a co-worker showed her how to manipulate employment data and that she was pressured to meet impossible job-placement quotas. Bittel is on leave from the company, at her request.

In a letter to the committee, the company's chief executive said internal and external reviews had found no evidence to substantiate the allegations. "Based on our investigations, we believe that Ms. Bittel's allegations are unfair to the tens of thousands of men and women working to serve students across the country as part of the EDMC family," chief executive Todd S. Nelson wrote.

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