Published: May 2014

Protect students and taxpayers from being ripped off

According to the Department of Education (DoE), an astonishing 72 percent of the for-profit college programs subject to the regulation produced graduates who on average earned less than high school dropouts. Of all the federal financial aid recipients enrolled at the lowest performing programs, 98% are at for-profit colleges. The taxpayer abuse and funding of worthless credentials needs to end! Consumer Action and coalition advocates urge the DoE and Congress to strengthen the federal gainful employment law, which requires career education programs — at public, nonprofit, and for-profit colleges — to prepare students for career in a recognized occupation.

We know that for-profit colleges are some of the worst offenders of this debt factory scheme. According to federal data, graduates of two-year, for-profit career training programs average a loan debt of $23,590. By contrast, most community-college graduates owe nothing. In fact, an astonishing 72 percent of the for-profit college programs subject to the proposed regulation produced graduates who on average earned less than high school dropouts. That's outrageous! And what's worse, these schools often target vulnerable populations, including veterans and underserved communities who can least afford costly and worthless degrees.

The Department of Education (DoE) recently proposed an inadequate rule to hold colleges accountable for making sure their graduates' degrees pay off. The proposal is full of loopholes and giveaways of taxpayer money to schools. Consumer Action and coalition advocates urged the Department of Education to institute a stronger rule that protects students from sham institutions that leave them with sky-high debt and dismal career prospects.

In order to quickly improve or strengthen weak programs the coalition recommends the DoE includes the following to the final rule:

1. Providing financial relief for students in programs that lose eligibility. 

2. Limiting enrollment in poorly performing programs until they improve. 

3. Closing loopholes and raising standards.  The proposed regulation is too easy to game, and its standards are too low.  For example, programs can pass the standards even when 99% of their students drop out with heavy debts that they cannot pay down.

4. Protecting low-cost programs where most graduates don’t borrow, including community colleges.

Lead Organization

The Institute for College Access and Success (TICAS)

Other Organizations

AFL-CIO | NAACP | The American Association of State Colleges and Universities (AASCU) | National Association for Black Veterans Inc. (NABVETS) | American Association of University Professors (AAUP) | National Association for College Admission Counseling | American Association of University Women | National Consumer Law Center (on behalf of its low-income clients) | American Federation of Teachers (AFT) | National Consumers League | Americans for Financial Reform | National Council of La Raza | Center for Law and Social Policy (CLASP) | National Education Association | Center for Public Interest Law | National Women Veterans Association of America |Center for Responsible Lending | Children's Advocacy Institute | New Economy Project (formerly NEDAP) | Children’s Defense Fund | Paralyzed Veterans of America | Consumer Action | Public Advocates Inc. | Consumer Federation of California | Public Citizen | Consumers Union | Public Counsel | Council for Opportunity in Education (COE) | Public Higher Education Network of Covenant House Massachusetts (PHENOM) | Crittenton Women’s Union | Public Law Center | East Bay Community Law Center | Rebuild the Dream | The Education Trust | SEIU | Generation Progress | United States Student Association | The Institute for College Access & Success | U.S. PIRG

More Information

To read the entire coaltion letter, click here.

For more information, please visit the TICAS website.

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