"Executive pay at for-profit colleges is being investigated by the ranking member of a congressional oversight committee, who said “lavish” compensation at the schools bears little relationship to academic well-being.
"Representative Elijah Cummings, the top Democrat on the House Oversight and Government Reform Committee, sent letters asking to see pay agreements from 13 companies, including Apollo Group Inc. (APOL), Strayer Education Inc. (STRA) and Washington Post Co. (WPO)’s Kaplan unit. Cummings cited a 2010 Bloomberg article that showed executives at the 15 U.S. publicly traded colleges received compensation that exceeded traditional colleges and collected $2 billion from selling stock over the previous seven years.
"Congress and the U.S. Education Department are scrutinizing for-profit colleges, which received almost $32 billion in federal grants and loans in the 2009-2010 school year. Students at those schools are defaulting on government loans at higher rates than those who attend nonprofit and public institutions.
“'The American taxpayers fund these schools through billions of dollars in tuition assistance, but there is little evidence that lavish executive pay is linked to the well-being of the students they are supposed to educate,' Cummings, who represents Maryland, said in a statement."
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