On July 30, 2012, the HELP Committee released its majority staff report summarizing the results of the investigation conducted by its chair Senator Tom Harkin (D-IA) into the for-profit education sector. The report, which was the culmination of a series of hearings and reports initiated by Senator Harkin over the last two years, focused on criticizing the sector for its reliance on federal funds, drop-out rates, the level of expenditures for instruction, and student loan default rates. Additionally, the report included profiles of 30 private sector institutions. The profiles included a variety of allegations that plaintiffs' lawyers may attempt to use as fodder for securities, qui tam, and student lawsuits.
Despite the overall negative tone about the sector, the report did contain some positive statements. Most notably, the report recognized that "[f]or-profit colleges have an important role to play in higher education." Additionally, with regard to the so-called "incentive compensation" provision, the report reaffirmed that there is no law or regulation preventing a school from terminating recruiters who fail to meet minimum performance requirements.
It is important to note that this report is a staff report and was never voted on by the whole committee. As such, the report does not carry the full weight of the HELP Committee behind it. Additionally, because it was a staff report, an argument may exist that the report is inadmissible in federal court proceedings as unreliable hearsay. This, of course, will not stop plaintiffs' attorneys from attempting to rely upon this report--like they have relied upon the Nunn Report for the last 20 years--in current and future cases.