WaPo biz desk misses parent company story

Michael Santoli and Bill Alpert of Barron’s note that the Washington Post business desk, which typically does a good job of covering regulatory action, has missed an investigation into a subsidiary of the paper’s parent company.

The investigation by the Department of Education into Kaplan was disclosed in a 10-K this past week.

Santoli and Alpert write, “Student-loan default rates are one inverse measure of the benefit received by students. Kaplan higher-ed’s numbers have been getting worse. In the first two years after graduation, defaults at four of the school’s 33 reporting units were above 25%, which is the level at which they are at risk of Department of Education sanctions. At the online Kaplan University, defaults rose from 6% for 2005 grads to 13% for 2007 grads, with preliminary numbers for 2008 worse, around 16%.

“Most intriguing in the 10-K is the passing (and first) mention that the Education Department has been conducting a ‘Program Review’ of Kaplan University’s main offices in Fort Lauderdale, Fla., since September. The Post business desk seemed not to notice any of this, but Post investors might want to.”

Read more here.