Harkin Set to Release For-Profit Schools Report Amid Controversy

Senator Tom Harkin, whose outspoken opposition to Wall Street generally and for-profit schools specifically has made him a leading voice in Congressional regulation of career and for-profit colleges. His office is set to release a report this month – the second in a series – detailing the horrific ramifications of applying free market principles to higher education, but it seems his office may have much to be concerned about given recent details that have emerged about the Senator’s direct involvement in not only the creation and distribution of faulty past reports, but in back-door dealings that should give any American pause.

Last fall, Harkin released a report that his office claimed detailed a host of transgressions on the part of for-profit or “career” colleges from misuse of student loan money to misleading counseling services and high default rates among graduates. The report was criticized by Senate Republicans as “unfair,” and Republicans boycotted subsequent hearings. It was later revealed that the report, compiled – with Harkin’s help – by the GAO, was faulty and many of its findings either fabricated or unusable and the GAO issued fix:

In November 2010, the GAO was forced to release a significantly changed report. The correction affected 16 of the 28 findings in the original report. The bias of the original report was also reflected in the fact that all 16 revisions were all of the same type: changing flawed statements that cast the for-profits in the worst possible light. Error after error took statements out of context or did not accurately portray what was said.

The report, however, had Harkin’s desired effect. Just days after the report was presented at a Senate hearing, the value of for-profit schools’ stock dropped 14% and companies that ran free-market educational facilities lost over $4 billion dollars.

A later journalistic investigation revealed an even darker heart to the study. The website Daily Caller obtained a series of emails and memos detailing how Harkin and his staff had pressured the GAO, demanding the inclusion of detail after detail even after the deadline to the report drew close. One staffer even explained that these detail demands were heavily responsible for the GAO reports gross innaccuracies:

”The team’s unwillingness to say no to the additional insertion of details at the end of a job created some of our most obvious inaccuracies,” the email says, citing pressure internally at GAO for the inclusion of these “details” as well as from “stakeholders” and “congressional staffers.”…

The internal evaluation email says one specific “detail” demand in particular drove “most of our corrections.” The detail was a summary of how many schools made deceptive claims about graduation rates and accreditation questions in the form of “X of 15 schools,” the email says.

When asked about the emails and messages, Harkin couldn’t remember the time frames and denied having influence over the report. Later investigations, though, showed that not only had Harkin had a significant hand in altering the report, but that his staff may have been involved in coaching the testimony of a key witness after one person who testified in front of Congress was unable or unwilling to give them the testimony they were looking for without “help” from outside special interests.

Top aides to Iowa Democratic Sen. Tom Harkin collaborated with a special interest group and a law firm with a financial stake in the matter to edit the written and oral testimony of a witness at a key investigative hearing last year, ….Officials from The Institute for College Access & Success (TICAS) and the James, Hoyer, Newcomer & Smiljanich law firm edited Josh Pruyn’s testimony for a pivotal Aug. 4, 2010 hearing before the Senate Health, Education, Labor and Pensions Committee (HELP), as did Harkin aides.

Pruyn, a disillusioned former employee of the for-profit Westwood College online, testified about high-pressure sales tactics used to enroll new students at the school. But ethics experts say the involvement of outside groups undermines the credibility of his testimony.

And that’s not even the end. While preparing to make his claims against for-profit education, Harkin met with noted short seller Steve Eisman who had an interest in seeing for-profit education stocks decline and participated in and shared his thoughts on for-profit education with $10K-per head meetings with groups of investment bankers with a history of short-selling entire industries. Industry analysts later reported to Inside Higher Ed that these meetings brokered important relationships between Harkin and investment companies whose clients would be well served by documents Harkin could produce from for-profit colleges through his own investigations and from actions Harkin could take to regulate or control the for-profit education industry.

So, of course, given these circumstances, is anyone willing to trust Harkin’s next “blockbuster report” due out any day purporting to eviscerate the for-profit education industry once again?

The Obama Administration certainly followed Harkin’s lead in approving a host of rules that restrict the for-profit education industry, even when they failed to address similar (and sometimes more egregious) shortcomings in not-for-profit and public education, despite all of the red flags. Since the Administration is so willing to simply rubber stamp the “findings” of a Senator who looks to be serving the needs of investment bankers rather than the American people, perhaps its time that the public put a more watchful eye on education policy coming out of this White House.


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