A Senate committee sent a clear message to for-profit colleges last week: With drop-out rates averaging 57 percent, too many career schools are are gambling with students' lives and American tax dollars.
The hearing by the Committee on Health Labor Education and Pensions on Thursday was the third in a series to shed light on an industry accused of taking advantage of low-income applicants by turning out more unpaid loans than graduates.
A study prepared by the committee reported 94.4 percent of students attending for-profit schools take out loans, compared to 16.6 percent attending community college and 44.3 percent enrolled in traditional four-year public schools. Much of that money comes from federal Pell Grants, which help low-income applicants attend schools of higher education, but is often never returned if they don't graduate.
For-profit colleges' high dropout rates and steep tuition costs have put a heavy burden on Pell Grants, leading Secretary of Education Arne Duncan to create what he calls "gainful employment" regulations to reign in federal loans given to for-profit college students. The rules, yet to take effect, would require for-profit schools to prove a certain percentage of their graduates find jobs upon graduation.
Committee Chairman Sen. Tom Harkin (D-Iowa), who is in favor of gainful employment regulations, said the bottom line is this: "For students enrolling in for-profit schools, graduation with a degree is a possibility, but a debt without a diploma is a probability. Going to college should not be like going to a casino, where the odds are stacked against you and the house usually wins."
But critics say the committee has presented only one side of the for-profit college debate. Among them: Republican senators, employers and for-profit students and graduates who protested gainful employment regulations in front of the Capitol Wednesday.
As mid-term election near, each issue becomes more partisan -- and regulating for-profit education is no exception. Sen. John McCain (R-Ariz.) was among three Republicans at the hearing, each of whom accused the panel of being biased in favor of the regulations.
Before excusing himself from the hearing, McCain said, "This debate exemplifies the sharp divisions between our two parties and two philosophies of government. And hopefully, maybe in January, it seems pretty clear that we will have a different agenda for this committee and the United States Senate."
Witnesses invited to testify only presented the case against the colleges, and the discussion centered on dropout rates rather than the successes of those who earn diplomas.
"We're focused on the wrong thing, Mr. Chairman," said Sen. Richard Burr (R-N.C.). "I hope that at some point we will look at the graduation rate of our students and whether they get across the goal line and get that certificate that angles them to a greater future."
Not presented at the hearing were two separate studies by the Accrediting Council for Independent Colleges and Schools and the Coalition for Education Success which report that among for-profit college students who did receive their degrees in 2009, an average of 75 percent found jobs within six months of graduation.
One witness, Danielle Johnson, said her training to be a nurse at a for-profit college in Iowa has not been adequate. She worries that other graduates are entering careers where their incompetence has potential danger.
"Coming out and working in a medical field," Johnson said, "I don't feel confident in working with people's lives."
In the audience listening to Johnson was Laurie Chapman, a recruiting specialist who supplies IT support to the Army and NASA. Chapman said she fills more than 40 percent of her positions with graduates from for-profit schools such as Virginia College and ITT Technical Institute. She disagreed that the graduates are inadequate.
"That has not been my experience at all," she said. "Every graduate and student who I have put to work from the colleges I'm associated with has been able to go in and work from Day One."
Discussion over the gainful employment regulations will be stalled until the Senate reconvenes for the lame duck session in November. Regulations are not due to be enacted until 2011.