There has been much written lately--in The Chronicle of Higher Education and elsewhere--about the lack of oversight of private colleges (some of which are online) that encourage students to go deeply into student loan debt, but provide substandard education.
Here's a message on the subject from CREDO Action:
It's time to stop predatory for-profit colleges from ripping off students and taxpayers.
These unscrupulous education profiteers market their programs and certificates as an opportunity for students to increase their employment prospects and jumpstart their careers. In reality, these companies reap billions of dollars in profits from taxpayers by offering substandard training and saddling students with debt they can't repay.
The for-profit education industry enrolls less than 11% of all students, but accounts for 26% of federal student aid and represents an astounding 43% of all federal student loan defaults.1
Many of these for-profit schools target the poor — sometimes even the homeless — with predatory, deceptive and outright fraudulent practices. They rope in students for overpriced programs, then leave them deep in debt they can't pay back.
In 2010, the U.S. Government Accountability Office conducted undercover investigations at 15 for-profit colleges. The results showed overwhelming evidence that for-profit colleges encouraged fraud and engaged in deceptive marketing practices. Four undercover applicants were even encouraged by college personnel to falsify their fianancial aid forms to qualify for more aid.
For-profit college recruiters also significantly exaggerated average salaries for the degree programs and certificates they provided. In one example, an admissions representative said that barbers can earn up to $150,000 to $250,000 a year, while the Bureau of Labor Statistics reports that 90% of barbers make less than $43,000 a year.2
Federal law requires career education programs that receive federal student aid to "prepare students for gainful employment in a recognized occupation." Last year, members of CREDO Action called on the Obama administration to further define "gainful employment," which would finally make it possible to enforce this important law.
While the new definition has yet to be released by the Department of Education, the for-profit college industry and its highly paid lobbyists are fighting hard to weaken the proposed rules, so exploitative businesses can keep profiting off federal student aid. That's why the Obama administration needs to hear from you today.
Thank you for standing up for students across the country.
Mark Anthony Dingbaum, Campaign Manager CREDO Action from Working Assets
1. "Department of Education Establishes New Student Aid Rules to Protect Borrowers and Taxpayers," U.S. Department of Education, 10-28-2010.