Facing heavy-handed government regulation, America’s for-profit colleges are reforming themselves
“EGREGIOUS, outrageous, violated everything we stand for”: Don Graham’s denunciation of recent activities by some employees of his own firm is stark. On August 4th a report by the Government Accountability Office (GAO) found evidence of deceptive recruitment tactics by 15 of America’s leading for-profit colleges, including one operated by Kaplan, which accounts for the bulk of the profits of Mr Graham’s Washington Post Company. Some of the colleges, which also included the giant University of Phoenix, insisted that the incidents—which ranged from misleading potential students about tuition costs and likely post-graduation salaries to encouraging them to file fraudulent loan applications—were isolated. But the mood is turning against them.
For-profit colleges, which range from beauty schools to institutions that resemble traditional universities, were already under attack. In June Steve Eisman, a hedge-fund manager who made a lot of money during the financial crisis by shorting bank shares, told Congress that the for-profit education business was as destructive as the subprime mortgage industry. Congress already seems eager to add to regulations that the government plans to introduce in November. …
