Feds questioning Capella U's owner

Looks like the federal hearings into activities by for-profit colleges has reached Minnesota.

Earlier this week the General Accounting Office released results of its investigation into fraud at for-profit schools.

Minnesota was not one of the states the GAO targeted.

Now, the U.S. Senate Committee on Health, Education, Labor and Pensions has asked Capella Education Company of Minneapolis, the owner of publicly traded Capella University, for information about how it handles its business, according to a  Securities and Exchange Commission document the company has filed.

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Capella is apparently one of 30 such colleges being asked for data.

Among the things Washington wants to know is how Capella:

  • uses federal money;

  • recruits and enrolls students, and tracks their attendance;

  • sets tuition and manages financial aid;

  • handles the withdrawal of students and the return of federal money;

  • and ensures that it complies with the rule that 90% or less of its income should come from federal Tile IV funds.

The Senate committee also wants to look at the university's graduation and job-placement rates, student debt and how the company handles the risk of student loan default.

Capella says in the document it "intends to cooperate" in a way "that does not compromise the company's sensitive proprietary operating and other information."

Capella is supposed to submit some of the information by Aug. 26 and the rest by Sept. 16.