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Business and Policy Areas
Business and Policy Areas

Senate Education Committee Shares Report on For-profit Institutions, Holds Hearing

October 6, 2010

The Senate committee on Health, Education, Labor, and Pensions (HELP) released a report titled "The Return on the Federal Investment in For-Profit Education: Debt Without a Diploma" on September 30 during a committee hearing.

The hearing, the third to examine for-profit institutions, was held to examine if students are succeeding at these universities. The chair of the committee acknowledged that further investigation needs to take place, as there is no clear solution to the committee's concerns with for-profit institutions, while Republicans argued that it was unfair to assume that abuses were taking place only at for-profit schools.

The report highlighted how for-profit institutions are enrolling large numbers of new students but losing nearly the same amount in withdrawals. One school, in 2008-2009, enrolled 120,638 new students but due to attrition only had a net increase of 18,233. According to the report, the 16 schools analyzed "added 1.2 million new students to their starting enrollment of 1 million." Further, "the schools ended the year with only 1.3 million students, meaning nearly one million students departed those schools in the course of the year." Between July 2008 and June 2009, 57 percent of the students withdrew from the 16 institutions examined.

Students at for-profit institutions, the HELP report continued, borrow more in student loans compared to students at community colleges and public four-year institutions. Approximately 95 percent of students at two-year for-profits and 93 percent of students at four-year for-profits took out student loans, compared to 17 percent of students at community colleges and 44 percent of students at four-year public institutions. The report goes on to explain how the amount of federal aid dollars sent to for-profit institutions has been dramatically increasing.

In addition to the report, the HELP hearing featured four witnesses. One student and one counselor shared their experiences at for-profit institutions, and two experts spoke to the issues of increasing student loan debt and withdrawal rates. Witness' written testimonies and full video of the hearing can be found on the HELP committee website.

The committee intends to hold another hearing on for-profit institutions and the student aid received from the Post-9/11 GI Bill. That hearing is scheduled to take place in early December.


Bryan Dickson
Senior Policy Analyst