Let’s be clear: Not all for-profit colleges are bad apples. But enough of them are that they’re giving the entire industry a bad name.
Even “Doonesbury” cartoonist Garry Trudeau is taking a shot at these schools. A recent storyline has fictional Walden College retooling itself as a for-profit, shifting “scarce resources from instruction to marketing” in order to compete for federal student aid money.
“Game on, University of Phoenix!” one character exclaims.
Too many for-profits seem more concerned with pulling in financial aid money than whether their students graduate or are adequately educated for the job market if they do earn a diploma. Often any credits they earn don’t transfer to public or private not-for-profit colleges – something applicants aren’t told.
Former school employees have complained about being pressured to sign up any warm body, even if it was obvious the prospective student was unlikely to succeed. Former military members and low-income people with few other higher-education alternatives have been particularly targeted.
Attorneys general in several states – including California, New York and Illinois – are taking action against some schools. And members of Congress have urged tougher standards for for-profits to receive federal student aid money.
Now the federal Consumer Financial Protection Bureau has gotten involved. The CFPB filed suit last week against the large for-profit chain ITT Tech, which has locations in Tukwila, Everett and Spokane. The suit alleges that ITT used predatory, high-pressure tactics – such as threatening expulsion – to coerce students into taking out high-cost private loans it provided even though it projected that 64 percent likely would default. And it allegedly misled students with inflated job-placement claims.
Americans owe more on outstanding student loan debt – nearly $1 trillion – than they do on auto loan or credit card debt. Bankruptcy won’t eliminate the debt, and often students’ parents – who may have co-signed on the loans – are on the hook, even having money garnished from their Social Security checks.
Former students burdened with debt often did not get a degree, so they may not be equipped to get the kind of jobs that will pay off loans and enable them to one day buy homes and save for retirement. In that way, their burden becomes the nation’s.
With financial aid dollars at a premium, it makes sense to go after those predatory for-profit schools that take advantage of their students.