For-Profit College Chiefs Unwind At Lavish Tahoe Resort

Federal Student Loan Dollars Paid For This Ritzy View

TRUCKEE, Calif. -- After two years of intense scrutiny and new federal regulations that have cut into booming enrollments at for-profit colleges, the industry's executives apparently felt the need for a restful break.

They found it this week at the palatial Ritz-Carlton, Lake Tahoe resort, a wonderland of gondolas, heated pools and upscale dining that is a city unto itself. The private four-day getaway marked the annual senior executive management seminar of the trade group representing the for-profit college industry -- a sector that derives most of its $30 billion-plus annual revenue from federal funds, in the form of student loans and grants.

Students at for-profit colleges often end up with enormous debt burdens and lean job prospects, resulting in a disproportionate number of student loan defaults. But the scene at this resort tucked into the Sierra Nevada Mountains served as testament to the fact that those running the institutions have fared far better.

Five dozen executives, who flew in on Sunday from states as far afield as Florida, Indiana and Virginia, gathered at the Ritz-Carlton, paying nearly $400 a night. They enjoyed the ski slopes, a spa and cocktail lounges, putting their taxpayer-financed revenues to lavish effect.

They devoted some of their hours to work, plotting political and business strategies in a key election year. Among the distinguished guests was former Senate Majority Leader Trent Lott of Mississippi, who was recently brought on as a lobbyist for the trade group, the Association of Private Sector Colleges and Universities. New rules from the Obama administration aimed at stemming marketing abuses within the industry have impeded growth. The trade group has filed suit in a bid to derail the regulations.

But the schedule in Tahoe was light on formal events. The agenda was confined to a three-hour planning session each morning, followed by cocktail receptions each night overlooking the snow-capped peaks and towering ponderosa pines.

That left time for the finer things in life: hours worth of skiing following Sunday evening's fresh snowfall, enjoying $14 signature cocktails such as the tequila-laden "Tahoe Breeze," and kicking back in the resplendent spa, with a full slate of steam rooms and massage options.

"You get a treatment yet?" asked Brian Moran, who just stepped down as interim chairman of the trade group and heads Virginia's Democratic Party.

"Just got done with it," said Robert Herzog, the CFO of Harrison College in Indiana and a member of the trade group's board.

"Sweet," replied Moran.

The spa also features an "experimental shower," with 21 different showerheads misting warm or cool water in different sequences, and a swimsuit-drying machine to prevent an uncomfortable walk back to one's room.

At a time of rising public anger over economic inequality and a sense that well-connected industries have profited at public expense, the festivities here offered a stark exhibit of the lucrative spoils flowing from for-profit colleges. Steve Gunderson, a former Wisconsin congressman who in January was named chief executive of the Association of Private Sector Colleges and Universities, declined to speak with a Huffington Post reporter when approached here this week.

Reporters were not invited to the event, Gunderson said, adding that if the media were granted interviews or access, the executives "might not come back next year." Were that the case, they would miss out on another opportunity to improve their alpine form: Next year's seminar is scheduled for the Four Seasons resort in Jackson Hole, Wyo.

Reached on Thursday after the retreat ended, Gunderson said the retreat represented a thrifty way to convene top executives, one that balanced work and leisure.

"Sure, this was a nice place, but I'll tell you this, flights to Reno were a lot cheaper than rates to Washington, D.C.," he said. "We gave them the opportunity to have some free time to network or use it for recreational purposes. But every association does that."

Gunderson challenged the notion that the gathering was financed largely with taxpayer dollars and defended the industry as a crucial educator of low-income students who lack other options.

"To suggest that this conference is somehow paid for by the taxpayers would be tantamount to saying nobody in public education in America that gets higher ed dollars should ever have a meeting," Gunderson said. "The reality is these are all for-profit organizations; most of them pay a 30 to 35 percent tax rate on any money they make. Yes, they serve a student body that is 95 percent eligible for student loans. But they are a student body that nobody else will serve."

The high life at the Ritz-Carlton was evident to anyone seated in the Living Room, an enormous central lounge with a three-story, stone chimney featuring multiple gas fireplaces.

All throughout the day, executives and their families streamed in and out. Some wore ski garb, with sunglasses, helmets and boots. Others lounged in robes provided by the hotel.

The central gathering area was a hybrid bar, restaurant and lobby all in one, open in the mornings for breakfast and late into the evenings for cocktails.

At 4 p.m. on Monday, still an hour and a half before the scheduled cocktail hour, a group of executives from South Florida sipped Paulaner Hefeweizen and Blue Moon on the plush couches, reflecting on the challenges of the East Ridge run.

Happy hour led to cocktail hour, which led to dining at the Manzanita, the resort's French-American restaurant helmed by a James Beard Foundation award-winning chef.

Last call at the Manzanita at 11:12 p.m. came too early for the half a dozen executives who remained. The party continued to the bar of the Living Room, where three South Florida executives took shots of Southern Comfort and lime juice from a shot rail shaped like a ski.

"This is the best thing about this conference," one proclaimed to fellow executives gathered at the bar. "We all get shit-faced and go skiing."

The executive management seminar is an annual tradition for the Association of Private Sector Colleges and Universities, designed "exclusively for owners, directors and other senior executive college leaders," according to the organization's website. Last year, as the group was in the midst of a major regulatory battle with the Obama administration, the group holed up at a Ritz-Carlton in Beaver Creek, Colo.

That gathering was equally luxurious, with top executives skiing directly into an evening cocktail hour, as one person who attended last year's event told HuffPost.

The association, formerly known as the Career College Association, has been a powerful force in Washington for more than a decade. As the chief trade association for for-profit colleges, it has been among the chief shapers of higher education policy in Congress and at the Department of Education.

The group has spent more than $3.8 million on lobbying over the past 10 years, including more than $900,000 last year alone. The organization has donated in excess of $1.5 million to campaigns for lawmakers and political committees in Washington, with top recipients including Democratic congressional fund-raising committees as well as the Freedom Project, a political action committee affiliated with House Speaker John Boehner (R-Ohio).

The group's major lobbyists include Tony Podesta, one of the most influential Democratic insiders in the Beltway, and former Senate Majority Leader Lott, who attended this year's event in Tahoe with his wife.

Lott was a guest speaker at Monday's "federal update and election preview" session. The session and the entire conference were closed to the media, but a copy of the slideshow presentation during the session, obtained by The Huffington Post, showed the organization was planning a continued effort to repeal regulations designed to hold schools accountable for leaving students with unsustainable debts.

"Our industry will continue to face intense scrutiny at both the federal and state level -- from legislative and regulatory issues to investigations by state attorneys general," one slide declared. "We need a long-term strategic plan that will change the current dynamic and allow APSCU to go on the offensive."

The presentation also referenced expectations of a political shift over the next two years.

"Next year's elections could drastically change the political environment in Washington and around the country," another slide stated. "It will be important for us to monitor the next two election cycles (2012 & 2014) to identify ways to insert our messaging and make a significant impact on targeted races."

HuffPost's Ryan Grim contributed to this report.

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