A new Senate report led by Sen Tom Harkin (D-Iowa) says that for-profit colleges are taking too much public money for student loans but not getting the same results as other schools.
The report targeted schools like Apollo Inc.'s University of Phoenix as being schools operated for profit, as opposed to traditional colleges, which are not-for-profit. It said University of Phoenix students drop out at much higher rates but take more public money through grants, which the government doesn't get back when students drop out. Harkin said this money sometimes goes to recruiting and advertising.
Students enrolled at for-profit colleges take on more debt, according to Bloomberg, with 98 percent of students taking out loans. Only 48 percent of students in public schools take out loans, according to Bloomberg.
"In this report, you will find overwhelming documentation of exorbitant tuition, aggressive student recruiting and abysmal student outcomes," Harkin said in a release. "These practices are not the exception. They are the norm."
Steve Gunderson, president and chief executive officer of the Association of Private Sector Colleges and Universities, released a statement saying that for-profit schools fit the needs of many non-traditional students and veterans because they have flexible course hours. He also said some of the Senate report's data is being misconstrued to attack schools.
"Senator Harkin is attacking schools that are currently providing instruction to 3.8 million students," Gunderson said in a release. "Today's students already face enough challenges accessing post-secondary education without these sorts of distractions."