WASHINGTON – U.S. Senators Dick Durbin (D-IL), Maggie Hassan (D-NH), Patty Murray (D-WA), and U.S. Representative Bobby Scott (D-VA-03) announced today the release of a Government Accountability Office report that they requested into for-profit college conversions – the process used by some for-profit colleges to become nonprofit, changing both their tax filing status and level of higher education accountability requirements applied to the institution.
The report highlights significant concerns with insider involvement in for-profit conversions, including that:
- Approximately one of three for-profit college conversions involved insiders
- Insider conversions account for the vast majority of federal student aid
- Insider conversions have worse financial performance
- Many of the insider conversion institutions engage in deceptive marketing practices
The Government Accountability Office recommended that the Internal Revenue Service strengthen its process for reviewing for-profit conversion applications. It also recommended that the Department of Education provide better oversight after a conversion occurs, which is part of Senator Hassan and Durbin’s PROTECT Students Act.
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“This report confirms what we have long known: that for-profit colleges are gaming the system and our federal government is not adequately protecting students and taxpayers. I stand ready to work with the Biden Administration to address the shortcomings identified in this report and enact new measures like the PROTECT Students Act,” said Durbin.
