Senate Committee Looks at For-Profit Education

“The lunatics are running the asylum.”
That startling accusation from Wall Street hedge fund manager Steven Eisman was just one of the troubling statements made during a hearing on June 24th held by the Senate Committee on Health, Education, Labor and Pensions (HELP).

There’s no question that the problems in the for-profit sector of higher education are very real. But the hearing had the feel of a “witch hunt” with the witness list stacked heavily with outspoken critics.

Clearly the most critical of the critics was Mr. Eisman and that statement about who’s running the asylum was his assessment of the national accrediting agencies that accredit for-profit institutions. He makes that statement because the boards of those agencies are composed of people from the very for-profits they accredit. But alas, that is the very nature of “peer review” and much the same thing could be said about any accrediting agency.

Although there was very little mention of specialized or programmatic accreditation, and what was said showed that there was lots of confusion about it, there were two specific examples that reflected what we in the CAAHEP office see as the major problem (not necessarily limited to for-profits but certainly disproportionately seen among those institutions).
One of the witnesses was a single mother who borrowed heavily to go to a diagnostic medical sonography program which turned out not to be accredited. She has been trying for over two years to find a job but because she cannot get certified she is unemployable. She did not allege that anyone lied to her about accreditation, they just failed to mention it and she never asked. Mr. Eisman had another example of a medical assisting program in California that was not accredited so that graduates could not get certified.

This is the very real problem which we see every day – in fact, even as the hearing was going on we had a call from a student in that same situation! How do we stop the institutions from misleading potential students? I’m afraid that any effort by Congress to get at the problem will end up hurting all of higher education. The ranking Republican on the Committee, Sentaor Michael Enzi (R, WY) may have stated it best:

“Unfortunately, as in other industries, there are bad actors in the for-profit sector. Some for-profit schools have attempted to game the system in order to gain access to more federal aid dollars … . .That is unacceptable … However, in combating this behavior, it is essential that we use a scalpel and not a machete. Whatever protections are put in place must eliminate bad actors and ensure that we do not unintentionally harm students in legitimate programs.”

Senator Harkin (D, IA) has promised more hearings to come so stay tuned…