A number of high-profile for-profit educators shut down or scaled back operations in recent years, among accusations of overcharging and under-educating students, and new rules intended to hold schools accountable. However, these companies’ fortunes began to turn after the election of Donald Trump and his naming of pro-industry Education Secretary Betsy DeVos. That’s why a group of 18 state attorneys general are calling on the administration to not ease up on these controversial schools.
Shortly after the election, Rep. Virginia Foxx (NC) — the new Chair of the House Education Committee (and the largest recipient of campaign contributions from both the for-profit college and student loan industries) — said that Congress would “do everything we can to roll back those rules and regulations” put in place by the previous White House.
It’s pro-business, anti-regulation sentiments like this that led the 18 attorneys general to send a letter [PDF] to DeVos and Congressional leaders, raising concerns that without current protections, for-profit colleges would see it as “open season” on students.
“As the chief consumer law enforcement agencies in our states, our offices handle thousands of complaints concerning higher education every year,” the AGs wrote in the letter, adding that their offices have worked to stop abuses by schools such as ITT Technical Institute, Corinthian Colleges, and DeVry University.
For example, just last month, New York Attorney General Eric Schneiderman’s office announced a $2.75 million settlement with DeVry University related to the company’s use of deceptive ads to recruit students.
In April 2016, Massachusetts Attorney General Maura Healey filed a lawsuit against ITT Educational Services, accusing ITT Technical Institutes of using unfair and harassing sales tactics, and misleading students about the quality of its Computer Network Systems programs, and the success of the program’s graduates in finding jobs.
The AG’s note in the letter that through their investigations and lawsuits, the Dept. of Education began to take steps to prevent these abuses by issuing new regulations and policies.
“Three of these recent steps — the Gainful Employment Rule, the policy of vigorous federal oversight of accreditors, and the Borrower Defense to Repayment Rule – are essential to protect both consumers and taxpayers from fraudulent actors in the for-profit education sector,” the letter states.
Under the Gainful Employment rules, which went into effect in June 2015, for-profit colleges are at risk of losing their federal aid should a typical graduate’s annual loan repayments exceed 20% of their discretionary income, or 8% of their total earnings.
Likewise, the Borrower Defense Rule allows student’s federal education loans to be forgiven if they can prove their college used deceptive practices to convince them to enroll.
“Our extensive experience in the higher education field, and our participation in the process of developing these recent policies and regulations, gives us unique insight into the abusive and deceptive practices of for-profit schools over the last ten years,” the letter states. “We cannot overemphasize the harm to students and taxpayers that a rollback of federal protections would cause.”
“Allowing for-profit schools unfettered access to federal student loan money without reasonable oversight and accountability is a mistake that American students and taxpayers should not be made to pay for again,” the AG’s warn.
The letter was signed by AG’s from Illinois, Connecticut, Delaware, Hawaii, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and the District of Columbia, as well as the Office of Consumer Protection of Hawaii.
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