Hagan Takes on For-Profit Schools


Is this the same Sen. Kay Hagan who championed another repatriation tax holiday? Hagan is sponsoring a bill to restrict for-profit career schools from using federal student loan dollars to pay for marketing, advertising and recruiting. A 2009 Senate investigation found that 86 percent of revenues received by for-profit schools came from the federal student loan programs. They spent 23 percent on advertising. The Winston-Salem Journal quotes Hagan:

“I’m particularly troubled by the tactics some for-profit colleges have employed in targeting active-duty servicemen and women and their spouses,” Hagan said in a prepared statement. She criticized some for-profit colleges for using “taxpayer dollars to fund aggressive and often misleading recruiting practices.”

Writes Andrew Leonard in Salon, the Hagan bill “would cut for-profit schools off at their knees.” Hagan, a member of the Senate Health, Education and Labor and Pension Committee, cited one such school with 1,700 recruiters and just a single job counselor. Leonard continues,

A little follow-up research reveals that school to be Bridgepoint Inc., a relatively recent, but very fast-growing entry into the for-profit sector. According to HELP committee analysis of data provided by Bridgepoint, as of March 2011, Bridgepoint employed 1,703 recruitment sales staff, and only one job placement counselor. Bridgepoint spends 30 percent of its revenue on marketing and recruitment. (The Chronicle of Higher Education reported in February that Bridgepoint did not contest the numbers in a press release.)

The two-year schools sport an 84 percent graduation withdrawal rate.

Holy waste, fraud and abuse. Nice going, Senator. FIRE next, please.

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