News Column

For-profit Colleges Give to Romney PAC

March 30, 2012

By Fredreka Schouten and Ray Locker


For-profit colleges and individuals with ties to them have donated $430,000 to a super PAC spending millions of dollars to help elect Republican Mitt Romney to the presidency, as the industry faces federal scrutiny.

The Apollo Group, which owns the University of Phoenix, gave $75,000 in February to Restore Our Future, a super PAC run by former Romney aides. The super PAC is one of the biggest players in the GOP's long-running nomination fight, spending more than $38 million.

Other Restore Our Future donors linked to the industry include James "Bill" Heavener, the CEO of Full Sail University, who gave $85,000 and serves as a top Romney fundraiser in Florida, and C. Kevin Landry, an executive with TA Associates, a private equity firm that has a minority ownership stake in Full Sail. He donated $120,000.

Another prominent industry figure: Todd Nelson, the CEO of Education Management Corp., and his wife, Amy, have donated nearly $5,000 to Romney's campaign. Amy Nelson, using a post office box in Utah as her address, also contributed $50,000 to Restore Our Future on Feb. 13, campaign-finance and property records show.

Nelson's company is embroiled in an $11 billion lawsuit from the U.S. Department of Justice and several states, alleging the company broke federal rules by paying commissions to recruiters as an incentive to enroll more students.

The firm has denied wrongdoing. Nelson said his political activity is unrelated to company business. "I've given to those who I feel can help our country," he said.

Asked about his wife's $50,000 donation, Nelson said, "I'm aware of some of the things my wife does and some not." Attempts to reach her were unsuccessful.

The donations come as the industry copes with attention from Washington. The Democratic-led Senate education committee has investigated schools' recruiting practices and the big loans assumed by its students. New rules from the Obama administration will measure the colleges on students' loan-repayment rates and other factors.

The industry has donated to both parties. Full Sail's co-chairman Ed Haddock, for instance, has donated more than $60,000 to Obama and the Democratic National Committee for this election, and served as an Obama fundraiser in 2008.

Romney is an enthusiastic backer of for-profit education and has singled out Full Sail and the University of Phoenix for praise, as The New York Times noted this year.

In an interview with Iowa's Ames Tribune last December, Romney said for-profit institutions such as Full Sail "hold down the cost of their education" and increase competition. "You are going to find students, saying 'You know what? That's not a bad deal. I'm not willing to come out of college with $100,000 in debt,'" Romney said.

"The alternative is to say that the government is going to pay for them," he added. "If the government starts writing checks for people to go to university, they'll just keep on raising their rates."

Education experts and industry critics say for-profit schools already rely heavily on the government. "Their revenue stream is almost completely dependent on the federal government," said Kevin Kinser, a higher-education expert at the State University of New York-Albany.

About six in 10 for-profit schools received more than 70% of their revenue from federal student aid programs, according to the U.S. Education Department. Although the industry enrolls about 12% of the nation's higher-education students, it accounts for nearly half of student-loan defaults, said Sen. Tom Harkin, D-Iowa, who led the Senate probe.

Romney spokeswoman Andrea Saul said it's important to protect students and taxpayers from "low-quality educational programs and unnecessary and excessive debt," but she said regulators should focus "on stopping abuses" instead of "adding unnecessary and burdensome regulations."

Landry and Heavener said their contributions have nothing to do with for-profit schools. "I'm a fan of Mitt Romney's," Landry said. Heavener called Romney "the best candidate for what America needs at this time."

Apollo Group backs "candidates who understand the important role" it plays in higher education, spokesman Rick Castellano said.

Source: Copyright USA TODAY 2012

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters