By Representative Emanuel Cleaver
As we approach the end of a long and divisive political campaign season, one issue has received little to no attention. We have a national crisis in education. The United States, once leading the world college graduates, has now fallen to the middle of the pack. With 63 percent of jobs requiring some sort of higher education by 2018, a projected shortfall of college graduates to meet this demand, and a gaping achievement gap between the rich and the poor, this is truly a crisis we cannot afford to ignore.
Things must change and change quickly. I join Senator Harkin and my colleagues in the House in demanding better performance from the for-profit college industry that serves millions of students across this nation.
As we address these demands, it is imperative that we have a diverse set of educational institutions to serve all students, not just those walking the traditional four year path. It is clear that traditional educational institutions can't fulfill the demands of the 21st century and the global marketplace alone. More and more, these non-traditional students are being served by for-profit colleges. Over the years, high school graduates from our church have asked me about certain for-profit schools in our community. In an attempt not to discourage their hunger for more education, I have withheld my reservations. In spite of recent negative attention, the for-profit industry has proved their staying power. But if they are here to stay, if they want to become a vital part of our national system of education, they must do better.
In late July, the Health, Education, Labor, and Pensions (HELP) Committee released a report highly critical of the for-profit industry. The report revealed the tremendous public investment in the for-profit industry; the federal government invests $30 billion annually into the industry through Pell Grants and the GI Bill, the source 86 percent of revenues for these companies.
Yet, in the face of a sound financial backing from the federal government, these institutions report dismal numbers. The HELP Committee found that half of associate degree students, and 64 percent of two-year students, left without even getting a degree. Those who do get a degree pay 19 percent more than at flagship public universities, and more than one in five will default on these loans within three years.
The report also found billions of dollars diverted to non-educational purposes, 22.4 percent of all revenues to marketing, 19.4 percent to profits, yet only 17.7 percent to student instruction. The average salary for-profit college CEO was $7,300,000, more than 7 times the average salary of large public university presidents (who on average are paid $421,000).
And while some of my colleagues have moved, understandably, to attempt to do away with these institutions, for-profit colleges are now a part of the future of higher education in America. These colleges serve a segment of the population to whom a four year college is simply not a real option. For those desperate to improve their economic situation, this loss would be devastating. Unfortunately, the findings from the HELP Committee demonstrate that these students, who are most in need, are being failed.
But this isn't just about poor kids getting into college; this is about the economic and moral future of our nation and all of its citizens. For centuries, America has been known as the "land of opportunity." In America, you don't have to pay for justice, you don't have to pay for opportunity; everyone has the opportunity succeed, if you work hard and play by the rules.
Yet, Chairman Harkin's report demonstrates that our land of opportunity is in jeopardy -- not only the American dream, but our ability to compete globally and produce a competitive workforce. It is critical that for-profit companies work with Congress to find standards that will ensure the industry fulfills its promise to students. If standards cannot be agreed upon, it is up to Congress and the Administration to develop guidelines that will force transparency, and give students a fighting chance at obtaining the American Dream.
Education is the vehicle for hope for millions of Americans, from those born into poverty, to the now-unemployed who wake up every single morning and look for a job. These companies owe it to our nation and our nation's students to be and do better, to clearly and honestly represent their services, and to simply provide the best possible education to their customers.