Warren, Pocan Investigate How Private Equity Buyouts Exacerbate Problems Plaguing For-Profit Colleges
Student Outcomes Deteriorate While Firms’ Profits and Reliance on Federal Student Aid Soars
Washington, DC – United States Senator Elizabeth Warren (D-Mass.) and Representative Mark Pocan (D-Wisc.) wrote to six private equity firms with current or recent holdings in for-profit colleges, KKR, Sterling Partners, Altas Partners, Vistra, Leeds Equity Partners, and Apollo Global Management, and requested information about the firms’ management of colleges and universities.
Over the last two decades, private equity activity has exploded across the U.S. economy. Private equity funds purchased companies, stripped them of their assets and loaded them with debt, and extracted exorbitant fees while taking payouts for themselves and walking away from workers and investors when the bets went bad.
In July, Senator Warren and Representative Pocan, along with a number of their Democratic colleagues, introduced the Stop Wall Street Looting Act, a comprehensive bill to bring greater responsibility to the private equity industry by holding private equity firms jointly liable for the debts of companies under their control and by requiring greater transparency in private equity firms’ practices.
In their letters, Senator Warren and Representative Pocan highlighted private equity’s destructive role in for-profit colleges and asked the firms to provide information on their fees, returns, marketing, and other financial practices, as required under the Stop Wall Street Looting Act.