Profits, Not Student Success, Drive Executive Pay at for-Profit Colleges
A congressman’s investigation into executive pay at for-profit colleges has found that it is based “predominantly on the profitability of their companies rather than the success of their students.”
Rep. Elijah E. Cummings, who released his preliminary findings on Friday, said he found it particularly troubling that “some companies provided no documents indicating any link whatsoever between corporate pay and student achievement.”
Representative Cummings of Maryland, the top Democrat on the House Committee on Oversight and Government Reform, focused his inquiry on the pay practices at 13 publicly traded higher-education companies whose billions in revenue come in large part from federal taxpayers.
In a memorandum to fellow Democrats on the committee, Mr. Cummings noted that several of the companies did include measures of student success in their pay policies. But, the memo said, “across the board, measures relating to corporate profitability dwarfed those relating to student achievement.”
It said two of the companies—Kaplan Inc., a subsidiary of the Washington Post Company, and Lincoln Educational Services—provided no documents that could verify that student success had played a role in determining executive pay, even though both companies asserted that they considered that factor.