Sen. Tom Harkin to Release GAO Report on For-Profit College Amidst Looming Questions From His Last One.

Sen. Tom Harkin will be releasing a report today on For-Profit Education but here’s a spoiler: He’s not a fan.

His previous investigation into For-Profit schools resulted in error-ridden reports & accusations of witness tampering. Much of the controversy surrounding that investigation still leaves ample doubt that Harkin is capable of providing an objective assessment of for-profit education.


To start with, Harkin had commissioned a report from the Government Accountability Office (GAO) which was ultimately determined to be riddled with errors and was an embarrassment to the department. An internal email was acquired which accused Harkin of pressuring the GAO with “extreme short time frames” which ultimately led to numerous errors in the report.

A smoking gun document about an error-ridden GAO report puts the murder weapon in a top Democratic senator’s hands. GAO issued a slew of corrections in November to an undercover investigation into for-profit colleges requested by Sen. Tom Harkin, Iowa Democrat, who had unveiled the report at a hearing highly critical of the schools Aug. 4. The email says GAO was put under “extreme short time frames” by Harkin to issue the report and “congressional staffers” demanded the inclusion of numerous details as it was being finalized.

The GAO report (released in the summer of 2010) was highly critical of for-profit education accusing universities of engaging in “fraudulent recruiting practices.” Once it came to light that Harkin’s office may have put pressure on the GAO to guide them into reporting what Harkin wanted them to, House Oversight Committee Chairman Darrel Issa (R-Calif) started an investigation into what had happened. This investigation resulted in 16 changes to the 28 key investigative “scenarios” which had led to the reports conclusions. To put it in perspective as to how big of a deal this was at the time, the issuance of a revised GAO report, the Coalition for Educational Success reports that “out of over 1,000 reports issued in the past year only 16 were later revised.” Of course, none of the other reports seem to have had the accusation of Senatorial influence over the report’s conclusions.

But the controversy doesn’t end there. Harkin was also accusing of meeting with special interests what had a financial stake in the outcome of the investigation and that they colluded in witness tampering:


Top aides to Iowa Democratic Sen. Tom Harkin collaborated with a special interest group and a law firm with a financial stake in the matter to edit the written and oral testimony of a witness at a key investigative hearing last year, documents obtained by The Daily Caller show.

Officials from The Institute for College Access & Success (TICAS) and the James, Hoyer, Newcomer & Smiljanich law firm edited Josh Pruyn’s testimony for a pivotal Aug. 4, 2010 hearing before the Senate Health, Education, Labor and Pensions Committee (HELP), as did Harkin aides. (emphasis mine)

One hedge fund short seller, Steve Eisman, had meetings with Senior Department of Education (DOE) officials two months prior to the first batch of regulations targeting for-profit colleges.

On April 26, 2010, Steven Eisman, famed short-seller, met secretly with two senior DOE officials, Deputy Undersecretary of DOE Robert Shireman and Acting Deputy Assistant for Policy and Budget, David Bergeron. Less than two months later, the Department issued its first batch of regulations targeting only for-profit colleges…

Why is that important? Well after giving numerous speeches comparing for-profit colleges to the subprime mortgage industry as well as meeting with Sen. Harkin’s staff and officials at the DOE, Eisman casually revealed that he was short selling private education stocks.

This is a lot of information so let me summarize. Sen. Tom Harkin commissioned a GAO report to use in an investigation of for-profit education. He subsequently used his staff to apply pressure to the GAO which ultimately resulted in a report that was highly critical of for-profit education (going so far as to accuse them of fraudulent practices) and the report was eventually determined to be covered with errors.


After the investigation, Darrell Issa of California did his own bit of investigating and discovered that Harkin’s top aides along with a special interest group that had a financial stake in the outcome of the education investigation, had tampered with witness testimony and edited it for their benefit.

Additionally, it was discovered that hedge fund manager Steve Eisman, who acknowledged that he was short selling education stock and thus had a financial interest in the outcome of the investigation, had consulted with the DOE and Harkin’s offices on the issue of for-profit education and in short order the DOE had issued new regulations on for-profit education.

And after all of this mess and scandal, the same man, Senator Tom Harkin, is set to release his new report on for-profit educational institutions.

His timing on this is not an accident. We are amidst what many have referred to as a “student loan bubble.” Graduates are having trouble finding jobs, debt is weighing on the mind of students, and overall it is not a great time for college education.

In short, the entire college education sector is facing a mountain of problems. No doubt Harkin’s report will glaze over this fact and again attempt to point the finger only at the for-profit portion of that sector.


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