Senate hearing: high debts from for-profit schools

June 7, 2011 - 2:30 PM

Washington (AP) — Senate Democrats say students attending for-profit colleges are subject to subprime mortgage-like lending practices that carry a heavy financial burden both for the students and taxpayers.

The Senate hearing on for-profit schools came just days after the Education Department issued new rules to deal with the student debt problems at such colleges.

Sen. Tom Harkin, who has held several hearings on the low graduation rates and high debt rates of for-profit schools, spoke of a "toxic mix" of companies trying to maximize their profits and vulnerable people taking financial risks to improve themselves.

Republicans on the committee boycotted the event and industry representatives who take strong issue with the hearing's findings said they had not been invited to testify.