Senate Committee Holds Hearing on Student Debt at For-Profit Institutions
June 9, 2011
The United States Senate Committee on Health, Education, Labor, and Pensions (HELP) held a committee hearing on June 7 to discuss the high levels of debt many students face when leaving proprietary institutions.
In his opening remarks, Senator Tom Harkin, the chairman of the committee, compared student loans at for-profit institutions to the sub-prime mortgage crisis. "Instead of packaging these loans into securities and selling them to investors, this time they're passing the debt off to American taxpayers in the form of federally guaranteed student loans," said Harkin. The chairman also took issue with the Department of Education's new gainful employment rules, calling the rules a "modest first step" in addressing student debt.
The HELP committee, with no minority party members present, heard testimony from experts describing how for-profit institutions benefit from student loans and student debt. Sandy Baum, a higher education analyst and consultant, cautioned that the whole student loan program may be at risk because of abuses by bad actors. In addition to the panel of witnesses, Under Secretary Martha Kanter shared the department's view of the current student debt situation, and defended the recently released gainful employment rules.
Witnesses' written testimonies and full video of the hearing can be found on the HELP committee website.
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