For-profit school leaders criticize Cummings investigation

For-profit college leaders criticized a congressional investigation looking into compensation of their chief executives. 

Brian Moran, interim chief executive officer and president of the Association of Private Sector Colleges and Universities (APSCU), called the investigation by Rep. Elijah Cummings (D-Md.), ranking member of the House Committee on Oversight and Government Reform, "just more politics" that doesn't acknowledge the role of the private sector schools. 

“This appears to be just more politics and unfortunately fails to acknowledge the important role private sector colleges and universities have in educating non-traditional students to compete for jobs in a very difficult economic environment," Moran said in a statement sent to The Hill. 

Moran argued that private sector schools charge less tuition and have fewer fee increases while showing similar results of other higher education institutions.

"The truth is career-oriented institutions are an integral part of the solution with more than 3 million students representing about 12 percent of all of higher education," he said. 

"Rather than singling out one sector, we hope that Rep. Cummings evaluates all areas of higher education so that the true beneficiary is the student.”

Cummings sent letters to the chief executives of 13 for-profit schools seeking copies of compensation agreements for senior executives as part of an effort to determine whether salaries, bonuses and other compensation are appropriately tied to the performance of students they educate, the vast majority of whom pay for their education with federal tax dollars.

A spokesman for the University of Phoenix, part of the Apollo Group, which received one of the letters, said compensation is based on student satisfaction. 

“University of Phoenix welcomes transparency and accountability across all of higher education," said Rick Castellano, director of Public Relations, in an email to The Hill on Monday. 

"We appropriately base compensation on student satisfaction and educational outcomes and have lead the way in providing vast student resources —including graduation teams, our student preparation center and no-cost orientation program for all new students," he said. 

"We seek to ensure our students are prepared for the workforce and hope all schools will do the same."

Cummings said there are studies have found that chief executives at for-profit colleges "consistently make much more than their counterparts at public and nonprofit schools."

When compared with public and nonprofit schools, "for-profit companies spend a smaller percentage of their funds on student education, reserving more for marketing, advertising, recruitment and other non-education expenses," he said.

He also said for-profit schools have lower rates of student success with students more likely to default on loan payments.  

Cummings requested that the schools — Apollo Group, Bridgepoint Education, Capella Education Co., Career Education Corp., Corinthian Colleges, DeVry, Education Management Corp., Grand Canyon Education Inc., ITT Educational Services, Kaplan, Lincoln Educational Services Corp., Strayer Education and Universal Technical Institute — provide the documents by Dec. 23.