For-profit college companies under House scrutiny

Evelina Smirnitskaya

Rep. Elijah E. Cummings, a top-ranking Democrat on the House Oversight and Government Reform Committee, demanded salary information from chief executives of 13 for-profit college companies Monday. According to The Baltimore Sun the list included Kaplan Inc. – a national test prep giant.

The Chronicle of Higher Education reported that Cummings said the committee will investigate how the companies’ executive compensation affects the performance of students educated with taxpayer funds.

In individualized letters sent out to each company, Cummings cited federal aid revenues, student federal loan default rates, and investment into education.

Some of the executives on the list, Cummings said, received up to $6 million in salary, stock, and bonuses last year. In 2010, the president and CEO of Bridgepoint Education received $2.2 million in compensation. The same year the company recieved 85 percent of its revenues from federal student aid programs, spent 38 percent of its operational expenses towards education, and recorded 19.8 percent of student default rate three years after college.