The U.S. Senate Committee on Health, Education, Labor and Pensions released a final report on Monday detailing its findings from a two-year investigation that its chairman, Sen. Tom Harkin (D-IA), has led of the for-profit higher education industry. The report is voluminous, and we are still digging through it. But for the moment, it’s important to acknowledge the report’s true significance: it puts thousands of pages of internal company documents into the permanent record, providing crucial evidence that fraud and abuse have run rampant throughout the sector, and especially at some of the country's largest for-profit college companies.
This is a major development, as it will make it extremely difficult for the industry and its Congressional champions to continue to deny that abuses have occurred at their schools that have caused – as Senator Harkin said at a press conference yesterday -- “lasting harm to the students they enroll.”
Over the last decade, both publicly-traded and private-equity owned for-profit higher education companies have come under scrutiny from federal and state regulators, and have faced numerous lawsuits by former employees, students, and shareholders over allegations that they engaged in misleading recruitment and admissions tactics to inflate their enrollment numbers. Many of these companies have been accused of routinely recruiting and enrolling unqualified student and sticking them with huge amounts of debt for training from which these individuals were unlikely to benefit.
Yet, time and again, these actions have ended in settlements, in which the companies agree to pay a fine but do not admit to any wrongdoing. What’s more, as part of the terms of these agreements, evidence of abuses that has been unearthed is put under seal, hidden permanently from public view. (For examples, see here, here, here, and here.)
As a result, the companies involved get off scot-free, no matter how airtight the cases are against them. Sure, they have to pay a fine, but this is a small price for these extremely lucrative corporations to pay to maintain their innocence.
The settlements have not only given cover to the individual companies but to the for-profit higher education sector as a whole. The fact that nobody has been found guilty of anything has allowed the industry, as well as its backers on Capitol Hill and Wall Street, to remain in denial about the extent of the abuses that have occurred and the damage that has been done. Instead, these settlements have, in recent years, made it many times easier for for-profit college leaders and lobbyists to portray themselves as innocent victims of a partisan witch hunt, as they have fought efforts by the Obama administration and Senate Democrats to rein in the industry’s very worst players and practices.
And that’s why the new Senate report is so important -- it puts into the official record mountains of evidence, drawn from internal company records, backing up its findings. Lawmakers can still willfully choose to ignore the evidence. But they can no longer say, with a straight face, that it doesn't exist.