For-Profit Colleges a New Lobby Force in Washington

Bridgepoint Education, a publicly traded company that runs for-profit colleges, spent $3.6 million on lobbying in 2011.

That was more than five times the amount spent the year before.

Bridgepoint was one of the companies behind a successful lobbying drive to weaken new rules for government education funding. (1)

Like all the companies in the chart below, it relies heavily on federal Title IV and GI Bill education funds.

Bridgepoint’s University of the Rockies in Colorado Springs derived 85 percent of its revenues last year from Title IV programs. The rate was even higher, 86.8 percent, at its other school, Ashford University in Iowa.

Concerned about student debt and an inability of many graduates to find well-paying jobs, the Obama administration had proposed strict eligibility rules tied to the percentage of students repaying their loans. The final version of the plan, released after the lobbying blitz, lowered the thresholds and delayed the penalties.

While the revisions put many for-profit education companies in a safer place, their government dependence continues.

So does the call for closer government scrutiny.

In December, Rep. Elijah Cummings (D-MD), ranking member of the House Committee on Oversight and Government Reform, sent a letter to Bridgepoint CEO Andrew S. Clark.

Cummings sought compensation agreements for Clark and other top executives of the firm.

“For-profit education companies like yours receive the majority of their funds from U.S. taxpayers in the form of Title IV loans and grants, Title X tuition assistance, and funds distributed pursuant to the Veterans Education Assistance Act,” he wrote. “In 2010, your company reported receiving approximately 85% of your total revenues of $713.2 million from Title IV payments alone.

“In the same year, your company reported awarding its executives $5.8 million in compensation, and you personally received $2.2 million, including salary, stock options, and bonus awards.”

According to Bridgepoint’s most recent proxy statement, filed this month, Clark’s compensation increased in 2011, to a total $2.7 million, including salary, bonus, stock and options.

Clark launched Bridgepoint just eight years ago, after working for Career Education Corporation and Apollo Group.

Despite the size of his compensation package, Bridgepoint was not the biggest money-maker among top for-profit colleges

Education Management reported the highest revenue – nearly $2.9 billion. Title IV funds accounted for $2.6 billion.

Not surprisingly, the connections between these corporations and government are myriad.

One of the lobbyists for Bridgepoint is Tim Hutchinson, the Arkansas Republican who served as a member of the House and Senate.

Education Management employs two former members of Congress as lobbyists. Thomas Loeffler (R-TX) and William H. Gray III (D-PA) of GrayLoeffler lobby for the firm.

Another for-profit education company, Capella Education, is represented by former Rep. Vin Weber (R-MN), of Mercury/Clark & Weinstock.

The sector also lobbies through a trade group, the Association of Private Sector Colleges and Universities, which spent $915,632 last year.

Three ex-members of Congress have lobbied on behalf of the association: former Rep. Lewis F. Payne Jr. (D-VA) and former Sens. John Breaux (D-LA), and Trent Lott (R-MS).

We assembled data on major companies in the for-profit education sector from government reports Title IV and GI Bill funding; trade group members; business information filed with the Securities and Exchange Commission; and lobbying and campaign data from the U.S. Senate, the Federal Election Commission, the Center for Responsive Politics and First Street.

(1) Not everyone pushing for the changes was a registered lobbyist. Former White House Communications Director Anita B. Dunn worked with Kaplan University, a subsidiary of the Washington Post. Dunn is a managing director of SKDKnickerbocker, the communications firm employing Hilary Rosen, of the Ann Romney “never worked a day in her life” controversy.

Laurie Bennett is a longtime newspaper journalist and winner of the Polk Award. She is co-founder of Muckety.com and also blogs for Forbes.

Here are the top 10 lobbying companies:

* Kaplan, Inc. is a subsidiary of the Washington Post Co.

** Alta Colleges is the parent company of Westwood College, which is the registered lobby client.

Related Post: For-Profit Colleges Have Uncounted Government Connections