Kaplan’s for-profit higher education division “faces growing scrutiny,” reports the New York Times, which emphasizes that its rival, the Washington Post, owns Kaplan.
. . . Kaplan’s revenue grew 9 percent during the last quarter to $743.3 million — with higher education revenues more than four times greater than those from test-prep — helping its parent company more than triple its profits.
But over the last few months, Kaplan and other for-profit education companies have come under intense scrutiny from Congress, amid growing concerns that the industry leaves too many students mired in debt, and with credentials that provide little help in finding jobs.
The Post Company spent $350,000 on lobbying in the third quarter, reports the Times. That’s more than any other higher-education company. Donald Graham, chairman of the Post Company, “has gone to Capitol Hill to argue against the regulations in private visits with lawmakers, the first time he has lobbied directly on a federal issue in a dozen years.”
The Washington Post editorialized against regulations linking student loans to graduates debts, earnings and repayment rates.
Though it disclosed its conflict of interest, the newspaper said the regulations would limit students’ choices. “The aim of the regulations was to punish bad actors, but the effect is to punish institutions that serve poor students,” Mr. Graham said in an interview.
. . . “For students with risk factors, older working students with children, Kaplan has dramatically better graduation rates than community colleges.”
In 2009, only 28 percent of Kaplan’s students were repaying the principal on their . The proposed “gainful employment” regulation requires a 45 repayment rate for full eligibility for federal aid. “By comparison, 44 percent of students at the largest for-profit, the University of Phoenix, were repaying their loans.”
Under a new program called the Kaplan Commitment, students can take classes for a four- to five-week trial period before paying tuition, making it more likely that those who take out loans understand the demands and will complete the class. That should cut enrollment and boost graduation and loan repayment rates.
University of Phoenix rolled out a similar strategy this month: New students must complete a free three-week orientation before enrolling and borrowing. In pilot orientations, 20 percent of prospective students decided not to enroll.
For-profit colleges really do enroll many students with risk factors, as Graham says. For-profit students are more likely to be low-income, non-white, older and balancing job and family responsibilities. Success rates are higher for these students at for-profit colleges than for similar students at public universities and community colleges.
Dependent on Kaplan’s profits, the Washington Post shouldn’t editorialize on for-profit education, argues Stephen Burd of Higher Ed Watch. The Post also owns a stake in Corinthian Colleges.
Higher education’s bubble is about to burst, predicts Glenn Reynolds, a University of Tennessee law professor who blogs as Instapundit. “If you’re going to go after schools for charging a lot and graduating students with poor job prospects, there’s no reason to focus on the for-profit sector exclusively — unless you’re just attacking the competition on behalf of the existing education establishment.
