Diverse Conversations: The Government Crackdown on For-profit Colleges - Higher Education
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Diverse Conversations: The Government Crackdown on For-profit Colleges

by Matthew Lynch

For-profit colleges have earned a reputation, and it’s not a favorable one, either. Many have preyed upon at-risk students for the sake of making a quick buck. Because of this, local, state and federal agencies have begun to crack down on these higher education institutions.

For example, California Attorney General Kamala Harris filed a lawsuit against the company that operates the now defunct for-profit Corinthian Colleges, arguing that the organization left its students out to dry by saddling them with massive amounts of debt that many could not afford to pay back. As a result, Corinthian Colleges Inc. received a judgment against it in the amount of $1.17 billion to be paid to the state of California for illegal practices.

The school rewarded students with worthless degrees that many companies refused to recognize, leaving students without the ability to repay their exorbitant student loans. So a California judge ruled in favor of the state of California and ordered Corinthian Colleges Inc. to pay more than $800 million in restitution to former students with the remaining amount going toward penalties.

This seems to be great news for students as they’ll have the ability to potentially receive some type of financial relief from student loans received while attending a Corinthian college. But there may be a problem as Corinthian filed for bankruptcy last year, and, by way of information from the company’s former attorney, Corinthian may not have to pay since it is no longer in operation.

No matter for the state and Harris, though, as her office has set up a website for students to visit to receive help and to gain information about the judgment. Schools run by Corinthian Colleges Inc. operated under the umbrella of career colleges where students who wanted a college degree but didn’t have the time to absorb a traditional college schedule could attend and receive a degree to help them receive better employment opportunities.

The company went after people of poor financial means and profited off those individuals’ ability to receive student loans from the government and private lenders. Corinthian likely received up to 90 percent of its funding from federal loan programs, so many of the schools were being fueled economically by the government and poor students. Hopefully students in California will be able to collect what was lost.

Corinthian Colleges is not the only school guilty for its mismanagement of funds. In fact, more than 500 schools in the United States are among colleges being investigated. According to Insidehighered.com, the United States Department of Education is “closely monitoring a greater number of colleges and universities over concerns about their management of federal funds….”

Many schools on the list of potential colleges being investigated are “for-profit beauty and cosmetology schools.” These types of institutions have come under increased fire for their collection of federal funds to allow students to enroll. But many students at some for-profit schools have complained that their degrees are worthless and that they are left saddled with piles of student loan debt and no gainful employment to show for it. That, to me, is certainly cause for colleges to be investigated by the U.S. Department of Education. Other for-profit schools listed include ITT Technical Institute, The Art Institutes, and South University.

Students at any institution on the list of colleges being investigated may want to monitor progress of the list as schools are removed or added periodically. This shows that the Department of Education is serious about ensuring that the education of students at these types of schools isn’t wasted on loans and empty job guarantees. It’s important that predatory institutions that do not implement the proper job placement and degree-use policies are called out and, if necessary, shut down.

It’s clear that the recent outcry for accountability for for-profit colleges is long overdue. Students deserve better than what they’ve been served by these institutions and, quite frankly, so does the entire American population. It’s time for these schools to deliver on their promise of career success for those who enroll—and that starts with student support that extends beyond recruitment.

 

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