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Hagan bill limits use of federal money by for-profit colleges

U.S. Sen. Kay Hagan is introducing a bill today that will prohibit for-profit colleges from using federal student aid dollars for marketing, advertising and recruitment. The Higher Education Act now prohibits that money from being used on lobbying, but allows it for this kind of promotion.

A summary of the bill from the NC Democratic senator's office says for-profit education companies spend a billions dollars from the taxpayer money they get from Pell grants and the GI Bill on promoting themselves instead of investing in education.

The Senate Committee on Health, Education, Labor and Pensions (HELP) conducted a two-year study that wrapped up last summer. It found that 15 of the largest for-profit education companies received 86 percent of their revenue from federal student aid programs. And in 2009 for-profit schools spent $3.7 billion or 23 percent of their budgets on advertising, marketing and recruitment.

Hagan introduced a similar measure last year. It's meant as part of a revision of the Higher Education Act, but the legislation never got to a full vote of the Senate last year. Hagan is co-sponsoring the bill with Sen. Tom Harkin, D-Iowa, the chairman of the Senate HELP committee. Twenty-four national education, veterans and consumer groups support it.

— Renee Schoof, McClatchy Washington Bureau


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