Harkin says reform 'urgently needed' to rein in for-profit education sector

Sen. Tom Harkin (D-Iowa) this week called for quick installation of new rules designed to rein the exploding career college industry, which feeds a large portion of the nation's growing need for healthcare professionals.

"There is evidence that too many of these institutions are driven more by the profit motive than their commitment to educating students," Harkin said in a Washington Post op-ed published Friday. "We must guard against for-profit schools that load up students with tens of thousands of dollars of debt in exchange for largely worthless degrees."

Stricter rules, added Harkin, who chairs the Senate Health, Education, Labor and Pensions Committee, "are urgently needed to take advantage of the strengths of for-profit institutions while avoiding their pitfalls."

The exploding growth of career colleges has raised eyebrows in Washington, not least because those schools got roughly $24 billion in federal tuition subsidies last year — a figure representing 23 percent of the $105 billion in Title IV education funding allocated in the 2008-2009 school year. 

Those subsidies have helped to fuel the enormous growth of career colleges, which have seen enrollment soar roughly 500 percent — from 365,000 students to 1.8 million students — in just the past few years, according to the Government Accountability Office (GAO).

Harkin said that, at certain schools, those subsidies represent as much as 90 percent of all revenues. "In some cases," he adds, "close to 30 percent of that federal investment is being spent on marketing and advertising to persuade students to enroll."

Such concerns have been agitated by recent reports revealing that shady marketing and recruitment practices — even fraud — are not uncommon in the industry. Some recruiters, the GAO found recently, were overpromising the salaries available after graduation, raising concerns that those students would be at risk of defaulting on federal loans at the taxpayers' expense.

In response, the Obama administration has proposed a series of rules designed to ensure that the schools are pumping out graduates employable enough to pay off the debts they incur. 

The industry has pushed back hard, arguing that a number of those proposals would hobble their recruitment and retention of students, leading to glut of workers in the fields being fed by for-profits.

Harkin, though, is backing those proposed rules. 

"New steps can ensure that these students get accurate information about the costs and likely outcomes of educational programs, while weeding out the programs that would leave them with debts they are unlikely to be able to repay," he wrote Friday. "The government should not be in the business of subsidizing for-profit institutions that leave students saddled with onerous debts they cannot repay and degrees or credentials that are of little value."

The issue is of particular importance to the growing health services sector, because career colleges train more than 40 percent of students receiving health degrees and certificates requiring two years of schooling or less, according to the latest survey from the National Center for Education Statistics.