The Senate Committee on Health, Education, Labor and Pensions has delivered a fairly scathing report on for-profit colleges, arguing that they have provided far more benefits for shareholders than the students that matriculate at their institutions.

As of 2009, the report said, three-quarters of students in for-profit colleges attended institutions owned either by publicly traded companies or private equity firms. It said the schools excelled at recruiting students, but not necessarily at retaining them: More than half of students at for-profit schools who enrolled in the 2008-09 academic year left without a degree, the report found. Half of all non-finishers ended their studies within four months.

The findings are in line with concerns voiced last year when the Education Department imposed stricter rules on for-profit schools that benefit from federal student loans.

Good for the Washington Post, whose parent company Kaplan owns a for-profit college, for printing this.

The lifeline for for-profit colleges turns out to be the federal government. Students access federal loans to enroll in the colleges, and they don’t end up benefiting from the experience. They are also often misled about how much the education will cost. And for-profit colleges devote more money to recruitment than instruction, not caring as much about the individual enrollee after getting their hands on the cash. For-profit colleges account for 1/2 of all student loan defaults.

A substantial part of the profit margin of for-profit colleges comes directly from the federal government. 1/4 of all federal student aid goes to for-profit colleges. The committee reports that in 2009, 86% of all revenues that went to for-profit colleges came from taxpayers.

That wouldn’t be such a problem if the institutions actually educated their students and prepared them for the 21st-century workplace. But they don’t. The tuition is far higher, by a factor of four, at a for-profit college over a public community college, and the quality of the education is worse.

The full HELP Committee report, the product of a two-year investigation, is available here. The Obama Administration has tried to deal with for-profit colleges by instituting a rule that required a “gainful employment” standard (colleges would only be eligible for student financial aid if their programs led to students finding work afterward). But a federal judge invalidated the rule (holding the Department of Education failed to provide justification for one of the criteria for schools’ loan eligibility). A for-profit college investigation taken up by a series of state Attorneys General has gone essentially nowhere. These colleges continue to prey on students.