Attorneys General warn of "open season" on students attending for-profit colleges

Betsy DeVos (Education Department Photo)

The 18 AGs plead with Education Secretary DeVos and Congress not to roll back for-profit regulations

A group of state attorneys general are asking Education Secretary Betsy DeVos and Congressional leaders not to declare "open season" on students by rolling back regulations governing for-profit colleges.

"Over the past fifteen years, millions of students have been defrauded by unscrupulous for-profit post-secondary schools," said the nine-page letter signed by 18 attorneys general, who said they had been forced to step in to stop some of the worst abuses because accreditors had been "asleep at the wheel."

Regulations governing for-profit schools and their accrediting agencies were tightened over the past several years after a series of abuses, but the new chair of the House Education Committee -- Rep. Virginia Foxx (R-N.C.) -- has vowed to "do everything we can" to roll back the regulations.

"Now that Mr. Trump is the president-elect, I think [we’ll approach things] quite differently than the way we might have if it had been Mrs. Clinton," Foxx said in a November 2016 interview with Inside Higher Education.

Asked if she sees the federal government taking action to lower the cost of education, Foxx said she did not.

"No. Why should we? We have a $20 trillion debt," she said. "Why should we go into debt to pay for what the states should be doing? Have you read the Constitution lately? If you find the word "education" in there as a responsibility of the federal government, then I might change my mind."

Serious cases

The AGs listed some of the most serious cases, including American Career Institute; Ashford University/Bridgepoint Education, Inc.; Corinthian Colleges, Inc.; Career Education Corporation; Education Management Corporation; Daymar College; DeVry University; ITT Tech; National College of Kentucky; and Westwood Colleges, noting that students and taxpayers have lost millions of dollars paying for substandard programs, certificates, and degrees.

Illinois Attorney General Lisa Madigan and the other AGs pointed to a number of protections they believe should remain intact, including the Gainful Employment Rule, which ensures students who attend career training programs will qualify for employment and be able to repay their federal student loans once they graduate.

The AGs are also pushing to keep vigorous federal oversight of accreditors that are tasked with providing prospective students with quality assurance.

Loan forgiveness

In addition to today’s letter, Madigan has repeatedly called on the U.S. Department of Education to immediately forgive federal loans of students who attended fraudulent for-profit schools. Madigan reached a $15 million settlement with Westwood College in 2015 that forgave private debt owed by students of Westwood’s criminal justice program. 

Madigan’s investigation into Everest College, which was operated by Corinthian Colleges Inc., revealed widespread misrepresentations made to prospective students, supporting the Department of Education’s own findings of fraud.

Madigan was also the first attorney general in the country to take action against a new industry of student loan debt relief scams. These scams target student loan borrowers who are desperate for help to avoid defaulting on their loans and end up getting scammed into paying money that does not help with their debt. Once these scammers illegally take upfront fees from borrowers, they do little to help them with their payments.

"Deceptive and abusive"

"These schools, and others like them, engaged in a variety of deceptive and abusive practices," the letter said. "Some promised prospective students jobs, careers, and further opportunities in education that the schools could not provide. Many schools inflated job placement numbers and/or promised career services resources that did not exist. Many nationally accredited schools promised that their credits would transfer, even though credits from nationally accredited schools often do not transfer to more rigorous regionally accredited schools."

"Many students were placed in loans that the schools knew from experience their graduates could not pay back. The schools were overseen by accreditors who failed to take action to protect students or the taxpayers who funded their federal student loans, despite ample evidence of these and other problems. In short, the entire for-profit education system was failing students and taxpayers," the letter continues.

Joining Madigan in sending the letter were attorneys general from 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 Executive Director of the Office of Consumer Protection of Hawaii.

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