For-profit colleges more than doubled spending on lobbying and hired six former members of the US Congress this year to fight regulations that threaten the industry.
Ten education companies and their trade association spent $3.8 million on lobbying in the first nine months of 2010, up from $1.5 million in the comparable period last year, according to reports filed with Congress.
For-profit colleges are resisting a US Department of Education proposal to restrict funding and objecting to a law that limits their revenue from government sources. The proposed restriction, called “gainful employment,” would tie eligibility for federal student-aid programs to graduates’ incomes and loan repayment rates.
“The stakes are extremely high,” said Harris Miller, president and CEO of the Association of Private Sector Colleges & Universities, the Washington-based trade group trying to blunt the regulations. “It’s the biggest fight I’ve been in since coming to the industry.”
Miller’s group spent $630,000 on lobbying in the first nine months of 2010, more than three times the $167,692 total a year earlier, according to filings with the Senate and House. Education Management Corp spent $410,000 on lobbying in the first nine months, up eightfold from $50,000 a year earlier. That company was 39 per cent owned by New York-based Goldman Sachs Group Inc as of November 5.
Black Caucus
Pittsburgh-based Education Management hired former US Representatives Tom Loeffler, a Texas Republican, and William Gray, a Pennsylvania Democrat, according to the filings. Gray belonged to the Congressional Black Caucus, whose members signed letters to the education department this year, saying the gainful-employment rule would hurt minority students.
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“What they bring is a Rolodex,” said Craig Holman of Public Citizen, a Washington-based advocacy group that calls for curbs on lobbying. “They worked with members who are still there, who know them well and know their senior staff. When they make a phone call to ask for a visit, they get it.”
Career Education Corp, based in Hoffman Estates, Illinois, spent $540,000 from January through September, compared with $210,000 in the same period in 2009, and hired former Connecticut Democratic Representative Toby Moffett.
Kaplan’s lobbying
Washington Post Co, owner of the Kaplan education business, spent $470,000 in the first nine months, compared with $120,000 a year earlier, according to filings, and hired former California Democratic Representative Vic Fazio. Fazio is a senior adviser at Akin Gump Strauss Hauer & Feld LLP, a law firm based in Washington. Post Chairman and CEO Donald Graham has also lobbied against education department regulations.
“There’s been considerable misinformation generated about for-profit colleges in recent months, and it’s important that lawmakers understand that Kaplan is in the business of helping people succeed,” Rima Calderon, a Kaplan spokeswoman, said in an e-mail. “We have retained people to help us tell that story, and we hope lawmakers are listening.” Jeff Leshay, a spokesman for Career Education, and Jacquelyn Muller, a spokeswoman for Education Management, didn’t return calls seeking comment.
Campaign contributions
For-profit colleges have also contributed to political campaigns. Two for-profit colleges were among the 14 biggest donors to the re-election effort of John Boehner, an Ohio Republican who will be the speaker of the House, according to the Center for Responsive Politics, a Washington-based research group.