For-Profit College Regulations Are Needed, Concede Some Industry Presidents

Ann McClure's picture

If all goes according to plan, Grand Canyon University's teams will play in a Division I athletics conference and its campus will maintain a hub of academic research. But it won't be easy for the Phoenix-based for-profit college, as its entire industry is under heavy scrutiny from the Obama administration and members of Congress, and since GCU was singled out in a U.S. Senate report just a few months ago.

A Senate investigation lead by Iowa Democrat Tom Harkin, chair of the Senate Health, Education, Labor and Pensions Committee, revealed that students at for-profit schools take out higher-than-average student debt loads, have a poor job placement record and mostly fail to graduate -- but the schools collected $32 billion in taxpayer dollars last year alone. Grand Canyon was one of the schools profiled, and the school was shown to have a significant growth in profits, correlating with a rise in enrollment over the past decade. However, GCU had a very low completion rate and spent more per student on marketing than on academics in 2009.

Brian Mueller, CEO and director of Grand Canyon University, who came on board in mid-2008, insists the report doesn't reflect the reality under the school's current leadership. But Mueller also isn't trying to block all the regulations that are being proposed to remedy the issues found in the Senate report.

The Obama administration has proposed and enacted a slew of regulations aimed at for-profits, and members of Congress are proposing even more, such as limiting how for-profits can spend tuition dollars. Nearly all of this has been met with hostility from the industry in the form of a $40 million lobbying campaign.

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