For-profit schools are at center of disputes
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WASHINGTON -- As the Senate hearing was set to begin, a familiar character sidled up to the press table.
Lanny J. Davis, the former White House counsel to President Bill Clinton, dished out talking points in support of the for-profit college industry, a sector now under serious scrutiny in Washington.
Mr. Davis told reporters that for their convenience, he had several students waiting outside ready to sing the praises of their schools after the Sept. 30 hearing, which focused on students' high debt loads and overzealous recruiting tactics at schools owned by Downtown-based Education Management Corp., and other companies.
From Sept. 17 to year's end, Mr. Davis was paid $160,000 to lobby for a group called the Coalition for Educational Success -- a band of for-profit schools with EDMC at its center. His efforts are just a small part of a booming political advocacy campaign from the company, which has been aggressively fighting proposed regulations from the Obama administration and a Senate probe that the industry views as unfair.
Critics say EDMC and other for-profit education companies use misleading recruiting tactics and graduate students with massive debts and no jobs to pay them off.
The Department of Education has proposed regulations, including the so-called "gainful employment rule," which is expected to be finalized sometime early this year. The rule would mean that if a pool of graduates in a particular program has an average student-loan debt load that is high related to the average earnings of the group, the federal government will not make loans available to students in the program. The federal government also could deny loans to programs in which students default on their loans at a high rate.
EDMC is one of the nation's largest for-profit education companies, operating the Art Institutes, Argosy University, South University and Brown Mackie College -- accounting for more than 150,000 students in all.
From the middle of 2009 to the end of 2010, EDMC itself spent at least $850,000 on federal lobbying -- after not spending a dime in the previous decade. In addition the EDMC-backed Coalition for Education Success, which formed in September, spent $570,000 by year's end. The company also formed a political action committee in 2009 that raised $118,000, mostly from EDMC executives, and made $56,000 in political contributions during the 2010 election cycle.
First Published January 23, 2011 12:00 am
