Report: For-profit colleges pay executives based on profit, not student success


Top executives at major for-profit colleges take in millions of dollars in annual compensation — primarily from taxpayer subsidies -– yet most of their pay is unrelated to student achievement, according to preliminary findings from a congressional investigation, the Huffington Post reports. The report from Rep. Elijah Cummings (D-Md.), the ranking member of the House Oversight and Government Reform committee, found that publicly traded college corporations calculate executive compensation “predominantly on the profitability of their companies rather than the success of their students.”

“This is especially troubling given the billions of taxpayer dollars flowing into these institutions and the serious financial risks to students who go through these programs,” the report concluded.

For-profit colleges receive much of their revenues from federal financial aid: student loans, Pell grants and military educational benefits. Yet students often fare poorly, dropping out in large numbers and defaulting on federal loans at double the rate of their counterparts at public institutions…

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