For-Profit Executives Talk Up Their Colleges' Societal Value at Investors' Conference

September 17, 2010

The political and regulatory pressure bearing down on for-profit colleges gave an annual investors' conference a decidedly different tone this year.

The chief executives of companies like the Apollo Group, DeVry, and Bridgepoint Education were among the dozens of industry leaders attending the jam-packed BMO Capital Markets Back to School Education Conference, held at a hotel here on Thursday. They spent as much time talking about their colleges' role in expanding the country's higher-education capacity and helping meet President Obama's goal of raising the proportion of adults who have college degrees as they did boasting about their earnings and profits.

Daniel Hamburger, the CEO of DeVry, even featured a video clip of the president speaking about his education goals in the State of the Union speech. And he pointed to statistics showing that nine of the top 10 colleges graduating Hispanic students in computer science were for-profit institutions as just one way that those institutions were helping to "democratize higher education."

The event was the first big for-profit industry gathering since Senate hearings and a Government Accountability Office report brought national attention to concerns about colleges overloading students with debt and targeting them with aggressive recruiting tactics.

"I was afraid nobody would show up," Jeffrey M. Silber, an industry analyst with BMO, said in an interview.

The worry was misplaced. Interest was higher than ever—with more than 1,000 people registered and the financial network CNBC broadcasting live segments from the hotel lobby.

While few of the companies took the opportunity to announce new developments in their businesses, just about all of them made clear that they have no intention of letting up on their campaign against the proposed new "gainful employment" rule, which would deny federal student aid to college programs where students debt-to-income levels are too high.

"Hold onto your seats" said Peter C. Waller, CEO of Corinthian Colleges Inc. His company has been lobbying heavily against the proposed rule, and Mr. Waller said it would continue to do so with "real data that we are going to bring in a very loud way."