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Chronicle for Higher Education - Cummings: Profits, Not Student Success, Drive Executive Pay at For-Profit Colleges

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A congressman's investigation into executive pay at for-profit colleges has found that it is based "predominantly on the profitability of their companies rather than the success of their students."

Rep. Elijah E. Cummings, who released his preliminary findings on Friday, said he found it particularly troubling that "some companies provided no documents indicating any link whatsoever between corporate pay and student achievement."

Representative Cummings of Maryland, the top Democrat on the House Committee on Oversight and Government Reform, focused his inquiry on the pay practices at 13 publicly traded higher-education companies whose billions in revenue come in large part from federal taxpayers.

In a memorandum to fellow Democrats on the committee, Mr. Cummings noted that several of the companies did include measures of student success in their pay policies. But, the memo said, "across the board, measures relating to corporate profitability dwarfed those relating to student achievement."

It said two of the companies--Kaplan Inc., a subsidiary of the Washington Post Company, and Lincoln Educational Services--provided no documents that could verify that student success had played a role in determining executive pay, even though both companies asserted that they considered that factor.

The memo also said three companies provided details on specific criteria related to students such as persistence, average starting salaries, and job-placement rates for graduates. The rest of the companies provided information with "vague references to student performance" but failed to show how those policies for executive pay would work or how they are actually applied in practice.

Mr. Cummings said the investigation would continue with a request for additional documents from the companies and direct meetings between company executives and committee staff members.

Congressman Cummings is also scheduled to take part on Monday in a presentation by Sen. Tom Harkin, an Iowa Democrat, of the much-anticipated results of a two-year investigation of 30 for-profit college companies by the Senate Committee on Higher Education, Labor, and Pensions. Senator Harkin, who is chairman of the committee, said the report would include previously unreleased data and documents on "student outcomes" for each of the companies reviewed.


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