Education urged to step up oversight of for-profit schools

Suggestions were few and questions many when the House Education and the Workforce Committee held a hearing Tuesday to review how federal officials are addressing alleged fraud and abuse in some for-profit higher education institutions.

At a hearing sparked by a CBS "60 Minutes" probe of practices at certain colleges, Education Department Deputy Inspector General Thomas Carter said investigations have declined in recent years and both federal and regional agencies "could be doing a better job."

Rep. Maxine Waters, D-Calif., said the department was "pitiful in its enforcement" of anti-fraud rules. She cited "thousands" of complaints from constituents, saying lower-income students often default on student loans because they cannot find any jobs once they finish the course of study.

Education and the Workforce ranking member George Miller, D-Calif., noted the CBS report documented instances in which for-profit schools misrepresented graduation rates, promised inflated salaries to prospective students and boosted enrollment numbers to qualify for more federal student aid payments.

"These actions represent a disservice to students, taxpayers and those colleges that play by the rules and provide a high-quality education," said Miller.

But Career College Association President Nick Glakas contended that the "60 Minutes" report was unbalanced and "premature," and that the problems it depicted were not industry-wide.

"Even if 15 or 20 campuses were under investigation, this would still be less than 1 percent [of all for-profit campuses]," said Glakas.

Miller used the hearing to criticize provisions in a higher education reauthorization bill introduced by Education and the Workforce Committee Chairman John Boehner, R-Mich., that he said would weaken existing regulatory standards.

Specifically, Boehner's bill would repeal the "90/10 rule," which requires for-profit institutions to make at least 10 percent of their revenue from non-federal sources, and the "50 percent rule," which says an institution cannot offer more than 50 percent of its courses off-campus.

Miller said the bill "eliminates important fraud and abuse safeguards in student aid programs, putting students in harm's way and wasting taxpayer dollars."

But Republicans noted that any illegal activity cited by the "60 Minutes" report would remain illegal under Boehner's bill.

In his opening remarks, Boehner noted traditional colleges and universities have not been able to meet the demand for higher education, and that students who attend proprietary schools "are essentially treated like second-class citizens under outdated current law."