Harkin Blasts For-Profit Colleges

(ABC 6 NEWS) -- It's a scathing report on for-profit colleges, including some in Minnesota. The two-year investigation led by an Iowa Senator blasts the private businesses for creating crippling student debt and having high dropout rates. But is the criticism fair?

An advertisement from Minnetonka based Rasmussen College boats they are preparing students for the workplace. But a two-year study lead by Senator Tom Harkin found that three for-profit colleges in Minnesota including Rasmussen, Capella, and Walden, used millions of federal tax dollars to increase marketing and profits, while many students dropped out, leaving them with large amounts of debt.

Harkin said, " In this report you will find overwhelming documentation of exorbitant tuition, aggressive recruiting processes, tax payer dollars spent on marketing and profit and pocked as profit, and regulatory evasion and manipulation."

The report says Rasmussen's Bachelor's degree dropout rate was 68 percent and Capella's was more than 60 percent.

"The biggest thing is graduation and retention rate," says Dave Jewison. He says for-profits can be limited, but educates students about their options. "There are some very good ones, some offer very good programs and have excellent retention and placement rates, others are certainly suspect."

Minnesota School of Business Campus Director Shann Politt wants people to know that's not the case of all for-profit schools.  "What we do here, we're transparent and report all our results to our crediting bodies," he said.  This year the school will place 81 percent of their graduating students in jobs. "One of the things we strive for is helping our students find successful careers."

The U.S. Education Department now requires schools to document whether students can find jobs that allow them to repay federally guaranteed loans, which is something the for-profit sector has spent millions of dollars lobbying against.