Dems seek tougher crackdown on ‘disgraceful’ for-profit colleges

A group of Senate Democrats said Thursday that proposed Education Department regulations don’t go far enough to tamp down on predatory for-profit colleges.

Recent years have seen an explosion of for-profit schools with career training programs that saddle students with a mountain of debt but leave them without any improved employment prospects, critics say.

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Lawmakers, citing schools like the University of Phoenix and Corinthian Colleges, note that, while only one in 10 students attend for-profit colleges, they account for almost half the country’s student loan defaults.

“They won’t deny it; they can’t deny it,” Sen. Dick Durbin (D-Ill.) said. “When it comes to the facts of the matter, this sector of higher education is disgraceful and scandalous.”

The Obama administration has proposed regulations spelling out new criteria for determining whether certain higher education programs lead to gainful employment, including students’ ability to repay loans and their debt-to-income ratio. Schools found to fall short of the goals would lose access to federal student aid money.

But Durbin, along with Sens. Tom Harkin (D-Iowa), Chris Murphy (D-Conn.) and Brian Schatz (D-Hawaii) said the regulations don’t do enough to rein in unscrupulous practices at for-profit schools. They called on Education Secretary Arne Duncan to consider tougher language in a final rule expected later this year.

“The proposed rule is insufficient. It needs to be strengthened,” said Harkin, chairman of the Senate Committee on Health, Education, Labor and Pensions.

In particular, Harkin said, the draft rule does not account for students who fail to complete programs in the formulas used to calculate default rates. Many students drop out from the programs after finding out about their deficiencies.

“They got debt, no degree,” Harkin said.

The lawmakers also said the schools have become savvy at manipulating their default rates by scuttling borrowers without the wherewithal to repay their loans into forbearance.

The rule reflects the administration’s second run at the issue. An initial rule proposed in 2011 was tossed out, after a federal court found fault with an important provision involving repayment rates.

The new criticism comes as part of a public comment period for the regulation that closes on May 27.

Parties on both sides of the debate have flocked to the White House to meet with administration officials in hopes of influencing the final language.

The Association of Private Sector Colleges and Universities (APSCU), for instance, argued during meetings at the Office of Management and Budget that the regulations would deny as many as 2 million people access to college through the end of the current decade. Further, the rule unfairly singles out for-profit institutions, the industry group contends.  
 


“It would predominantly impact students enrolled at private sector colleges, while not addressing outcomes and student debt issues across all of higher education,” APSCU spokesman Noah Black told The Hill in February.