A person walks past an Everest Institute sign in a office building in Silver Spring, Md., Tuesday, July 8, 2014. The dozen campuses that for-profit education company Corinthian Colleges Inc. is closing operate under the Everest name and are scattered in 11 different states, the company announced. (AP Photo/Jose Luis Magana)
Updated: August 15, 2014 6:14AM
One reason to go to college is to get new experiences, but being defrauded shouldn’t be one of them.
Sadly, that’s exactly what happens to many students who yield to high-pressure recruiters and sign up for unscrupulous for-profit schools that leave them with crushed dreams and hopelessly in debt.
To protect future students, the U.S. Department of Education is slated to announce in October a final “Gainful Employment rule.” It would cut off financial aid to schools whose graduates spend too big a percentage of annual earnings on student debt or have high rates of default on their loans. In other words, it targets schools that are little more than factories for student defaults.
Finally, the tide is turning against predatory schools, and it’s not hard to see why we need the rule. Last week, California-based Corinthian Colleges Inc. said it will sell six suburban Chicago schools operating under the Everest name as part of a settlement with the U.S. Department of Education, which caught Corinthian falsifying data on how many of its graduates secure jobs. In 2012, Illinois Attorney General Lisa Madigan sued Westwood College, alleging it engaged in deceptive practices that left students deep in debt and without the promised qualifications they needed to get jobs. A suit filed by California alleged a for-profit college in that state advertised job placement rates of up to 100 percent for some programs when there was no evidence a single student had landed a job.
Defenders of the for-profit industry say the schools open doors for underserved students, such as women, veterans and minorities. U.S. Sen. Mark Kirk, R-Ill., made that argument last week in an online op-ed published by the Chicago Sun-Times.
But what good is an open door if it leads to nothing but a dead end? That’s why U.S. Sen. Dick Durbin, D-Ill., and Madigan support the Gainful Employment rule.
One sharp practice of some for-profit schools is to carry on at length on their websites and in their brochures about the value of becoming certified as, say, a medical assistant or dental assistant. Unsophisticated young people assume those schools provide what’s necessary to get that certification. Only when they graduate — if they ever get that far — do they learn they can’t get certification because their school isn’t properly accredited.
Another shrewd practice is that students at many for-profit schools are required to sign binding arbitration clauses when they enroll. Later, students who feel they have been cheated find they cannot sue in the courts, but must use an arbitration system where the school chooses the arbiters and rulings are not made public.
On top of that, many for-profit schools provide degrees that employers view as worthless.
This predatory activity puts too many students in a really bad place. They are saddled with tens of thousands of dollars of debt that they can’t discharge in bankruptcy, and that may burden them for the rest of their lives. Many still hold the same jobs after graduation that they had before they enrolled, jobs that don’t pay enough to whittle down their student debts. Others never graduate at all, and can’t take out new loans to start over.
Kirk says the Gainful Employment rule would force Illinois community colleges to spend up to $5 million to meet new reporting costs. Karen Hunter-Anderson, executive director of the Illinois Community College Board, while stressing that the Gainful Employment rule is needed to protect students, agreed with that number and said community colleges have suggested ways to lower those costs. The Education Department should take heed and possibly make adjustments to the final rule.
But the victimization of college students must stop. Many for-profit schools have solid track records. It’s time to pull the plug on those that only hurt students.