Clinton endorses controversial private equity-backed for-profit higher education chain- report
Former US President Bill Clinton serves the Honorary Chancellor for Laureate Education Inc, America's largest-for profit college firm in terms of enrollment, Bloomberg reported. He has made over a dozen appearances to various campuses of Laureate Education located in various countries in the paid position he has held since 2010, the report said.
An offshoot of Sylvan Learning Systems Inc, a tutoring chain, Laureate now has 75 schools in 30 countries. From having 243,000 students seven years ago, it now has 800,000 students. Its yearly revenue has increased more than three times to $4 billion since it went private in 2007.
The report said Laureate is supported by several of the financial industry's biggest names. These include Henry Kravis, George Soros, Steve Cohen and Paul Allen. KKR & Co took a stake worth $487.5 million when Laureate Founder and CEO Doug Becker persuaded its investos to take his company private in a $3.8 billion deal.
In a KKR memo to investors in 2010, the private equity company said its investment in the college chain had risen in value to $710.8 million, the report said. The company has also grown by utilizing a lot of the strategies that for-profit colleges have adopted, like spending a lot of money on marketing and offering students career-oriented courses. Bloomberg reported that these strategies built up a booming industry until four years ago when recruiting abuses and increasing student debt led to a regulatory scrutiny by the administration of President Barack Obama.
However, some supporters of Laureate say that the company provides an important service by giving emerging markets access to education. International Finance Corp, the investment arm of the World Bank, poured $150 million in the company.
The growth of the company comes with its share of controversies. Teachers, students and government officials criticize Laureate because it seeks to increase the revenue of embattled colleges by growing enrollment without making a corresponding investment in academics.