What Harkin for-profit report says about three MN colleges

I've chatted with Tom Crann on All Things Considered about Sen. Tom Harkin's investigation into for-profit colleges and the three Minnesota schools that were in the report.

Above is the first volume of the report, where you can see in detail what what's said about each college.

The Web page with links to all the volumes is here. Look for Volume I.

Capella University's profile is on pages 334-350.

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Rasmussen College is discussed on pages 693-712.

And Walden University is handled on pages 777-792.

The conclusions are on the last page of each profile.

I've included a summary of each in our main news story.

Here's the (reposted) summary for each college, and the college's response:


The report says graduate students in Minneapolis- based Capella's online-only programs seem to fare much better than those at many companies in the investigation.

The university also has a solid track record, and past student-loan default rates have been very low. But investigators are seriously concerned about the high withdrawal rate among those seeking a bachelor's degree.

And the report said Capella's low default rate may not reflect the coming challenges for students seeking four-year degrees. It also says Capella spends an "unusually high" share of its revenue on marketing -- and a "relatively small" amount on online instruction.

Investigators were also concerned about the academic independence of Capella's faculty, most of whom are part-time.

That said, the report said the university does better than others in controlling recruiting practices and investing in student services.


Spokesman Mike Buttry called the section on Capella "a pretty balanced report."

He acknowledged the concern over the undergraduate withdrawal rates, but said things are improving:

"We're seeing some exciting progress. But that certainly is something that we talked a lot about in 2010 when we started to see outcomes that we weren't happy with."

He said Capella has to spend more money on marketing than nonprofit and public universities. That's because it doesn't have the marketing tools -- such as football teams, large alumni population or a large campus presence -- that they do.

He also said that since Harkin's researchers collected the data, Capella as boosted the number of full-time faculty from 165 to 250.


Investigators call the programs at Minnetonka-based Rasmussen College expensive. The college has received growing amounts of funding through federal financial aid, and its profits have grown significantly.

Yet the report finds that more than 63 percent of its students leave without finishing their degree. Investigators called the college's retention rates among the worst in the report.

Investigators say Rasmussen has made minor improvements. It spends more on instruction and student services than many other for-profits in the report.

But investigators say it's not clear whether the company offers value to students or taxpayers.


Rasmussen Vice Chairman Michael Locke told me he had issues with some of the data and what the report chose to present.

He said, however, the college is working on improving retention rates.

"We are disappointed in those rates, and we've taken a number of steps to improve those. And I'm delighted that we are seeing improvements."

In the fall of 2010, he said, the college instituted a one-week orientation program to make sure potential students are truly motivated. Since then, he said, Rasmussen has denied admission to 20 percent of incoming students.

Locke said the college also institute "stackable credentials" in January. Under the old system, if students shot for a bachelor's but didn't make it, they walked away with nothing. The new system would avoid that. Students would start by earning a certificate, then proceed to associate's degree, and then finally earn a bachelor's degree. That way, if they left school before finishing the four-year degree, they'd have something to show for it.

Rasmussen hasn't increased tuition in two years, Locke said, and has lowered it by as much as 20 percent in some programs.

Although investigators called Rasmussen's efforts "minor improvements," Locke disagreed, calling them "extremely major and significant."

He said he was "disappointed that the report didn't provide more context on that."


The report says Minneapolis-based Walden University students have much greater retention rates than those at comparable for-profit schools. It spends a large share of its money on marketing and a "relatively" small amount on instruction.

But its students seem to do much better than their counterparts at other schools. And Walden spends more on student services than many other companies in the report. It doesn't spend much on online instruction.

Investigators have concerns about the academic independence of Walden's faculty, most of whom are part-time.

The university's withdrawal rate for those seeking a four-year bachelor's degree is 51.6 percent. That's considerably worse than the rate among its graduate programs. But investigators say Walden has moved fast to start a free orientation program, which should help.

They said placement rates and earning power are not an issue for graduate students in teaching and nursing. But it could become "a more serious concern" as it enrolls more undergraduate students.


Walden officials would only comment by email. Here's a version of their response, which I've edited lightly, including for length and format:

Overall, we are pleased that the Committee found us to be the best of the institutions examined and we appreciate the attention paid to accountability and outcomes by Chairman Harkin and other policymakers. As the report acknowledges, institutions like Walden play an essential role in providing access to quality higher education.

However, we wish that the report was not limited to only one sector of higher education. And we were also disappointed by the generalizations made in both the title and text of the report.

“Safeguarding” federal funds and ensuring that Walden provides a strong education at a good value for our students are essential goals at Walden. As the report acknowledges, we have the outcomes that demonstrate it. With a current Cohort Default Rate (CDR) of 2.5%, Walden safeguards federal funds better than most institutions in all of higher education.

In a Washington, D.C. press conference today, Sen. Harkin said he expects to see a number of pieces of legislation designed to curb abuses and raise performance. But he said they probably wouldn't be introduced till next year.

The main changes he'd like to see involve:

  • Better data on student performance. He said most current data measures just first-time, full-time students. Those are just a fraction of the students who attend for-profit colleges. Most are part-time, or took some classes years ago.

  • Restricted spending. Harkin said for-profit colleges should not be allowed to use federal money for advertising, recruiting or lobbying.

  • Support. The government needs to make sure colleges provide enough support services for students -- not just for their first week but through their entire college career, he said.

  • "Outcomes-based thresholds." Harkin said federal officials should build on recently released gainful-employment rules that measure how well graduates do at getting a job that helps them pay off their debt.