Cummings will lead the charge against 13 for-profit schools.

Officials from for-profit colleges, with some of the largest online programs in the U.S., painted the industry as a fiscally sound choice for students after Rep. Elijah Cummings, D-Md., called for an investigation into “lavish” CEO pay at for-profit schools.

Cummings said Dec. 13 that the House Committee on Oversight and Government Reform would investigate executive pay at 13 for-profit programs, some with high student loan default rates and a checkered history of false claims used to dupe students into signing up for massive loans.

Committee members will decide whether for-profit schools, which depend on federally guaranteed student loans for the vast majority of their profits, were awarding executives fairly while student dropout rates and loan defaults rose at many prominent for-profit colleges.

Read more about for-profit colleges in higher education…

For-profit college default rate spikes; industry hits back

Plan to outsource online classes to for-profit schools meets opposition

“The American taxpayers fund these schools through billions of dollars in tuition assistance, but there is little evidence that lavish executive pay is linked to the well-being of the students they are supposed to educate,” Cummings said in a statement. “Congress has a responsibility to ensure that taxpayer funds are being used first and foremost for the benefit of students, not to line the pockets of corporate executives.”

Brian Moran, interim CEO and president of the Association of Private Sector Colleges and Universities (APSCU), led the criticism of Cummings and other lawmakers who pushed for the investigation.

For-profit colleges, he said, have provided career training for students in a down economy while avoiding tuition and fee increases that have become commonplace at public universities and nonprofit colleges.

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

National statistics have shown students at for-profit colleges are less likely to graduate and more likely to default on their loans. Fifteen percent of for-profit college students have defaulted on their school loans. Overall, 8.8 percent of U.S. college students have defaulted on their loans.


Add your opinion to the discussion.