A newly released study of federal data finds that for-profit college students experience a decline in earnings and increase in debt with six years of attendance, when compared to their financial standing before enrollment.
Inside Higher Ed reports
today on the research study by George Washington University and part of the U.S. Department of Treasury. "The negative earnings effects we find are troubling given the debt that students incur to attend for-profit institutions," the student find.
A for-profit college industry spokesman criticized the study, stating in part, "The study's methodology is an extension of the flawed logic behind the gainful employment regulation -- it looks only at short-term earnings and not at the lifetime benefit of higher education to a non traditional student and their family."
The Federal Trade Commission has settled a case brought against operators of a Florida company that allegedly steered consumers seeking to apply for jobs to for-profit schools that paid the company for the "leads."
According to a report
in Inside Higher Ed, the FTC alleged that consumers who provided the company, Gigats.com, with information typically provided for a job application were directed to call "employment specialists" who steered consumers to enrolling in education programs that paid the company for leads.
According to a news release, "The FTC alleges that these so-called advisers falsely claimed to be independent education advisers but in fact only recommended schools and programs that had agreed to pay the defendants, typically from $22 to $125, for consumer leads that met their enrollment requirements."
The FTC's agreement with Gigats calls for a payment of $360,000 and threatens collection of an additional $90 million if the payment is not made.
The Minnesota state attorney general's office is going to bat for former students of for-profit Anthem College, which closed in 2014 and is now in bankruptcy.
Attorney General Lori Swanson is asking the U.S. Department of Education to establish a process for loan forgiveness for former students of Anthem, a health-career school that had dozens of campuses across the country before closing amidst declining enrollment and increased federal scrutiny of for-profit colleges and trade schools.
According to a report
in the Minneapolis Star Tribune, Swanson submitted sworn affidavits from 15 former students with allegations including false representations regarding the transferability of credits earned at Anthem.
Tuition at Anthem's certificate, diploma and associate degrees ranged from $26,000 to $40,000, compared to annual tuition in the range of $5,300 at Minnesota community colleges, the Star Tribune stated.
Thousands of former students of a nationwide beauty school chain may be able to avoid payment on federal student loans used to pay tuition at the now-defunct company.
A federal appeals court recently ruled that borrowers who used federal loans to pay for programs at the Wilfred Academy could pursue a case against the U.S. Department of Education regarding its entitlement to collect on student loans even though Wilfred engaged in financial aid fraud prior to its shut down in 1994.
Prior to its closure, Wilfred had received more than $400 million in federal student aid from more than 60,000 students at approximately 60 campuses operated around the United States.
Low-income borrowers are often the "primary targets of predatory schools," according to Harvard Law School official Toby Merrill, who is supporting the student borrowers in the case. Merrill told
Reuters that the court decision shows that the Department of Education must consider the rights of former students in such cases.
Minnesota's Globe University and Minnesota School of Business has closed four campuses, moving students online or to other campuses, in the wake of continuing troubles with the state's attorney general.
In 2014, Minnesota Attorney General Lori Swanson sue the schools in 2014, alleging that high-pressure sales tactics caused students to enroll in expensive programs that did not deliver on promises of job placement. A trial on the allegations recently concluded, but a judge has not yet issued a ruling.
The campuses closed by Glob were in Lakeville, Brooklyn Center, Elk River and Plymouth. Around 45 jobs were eliminated in connection with the closing.
In announcing the campus closings, a Globe executive placed some blame on the consolidations on a "three-year negative publicity campaign orchestrated by the Minnesota attorney general."
The executive, Jeanne Herrmann, also stated, "The attorney general's campaign has not only impacted our enrollment, but has also called into question the validity of the degrees of tens of thousands of our graduates."
The closings were reported
by the Minneapolis Star Tribune.
Several large veterans organizations on asking the federal government to "crack down on colleges that prey on veterans by charging exorbitant fees for degrees that mostly fail to deliver promised skills and jobs," The New York Times reports
The organizations in letters sent to the U.S. Department of Veteran Affairs call on the department to improve oversight over colleges receiving millions in funding the G.I. Bill, but engage in deceptive recruiting by misrepresenting programs and job placement performance.
Organizations calling for tighter scrutiny of colleges benefiting from the G.I. Bill include the American Legion, the National Military Family Association, the Military Officers Association of American and nearly 20 other groups.
A group of former nursing students at the Tucson campus of Brown Mackie College have filed suit against the school, claiming that they have been barred from taking licensing exams as practical nurses due to shoddy practices at the school.
A lawsuit filed in state court in Arizona alleges that "the students have nothing at all to show for nearly two years of effort and sacrifice, and must start all over again or abandon their hopes of becoming nurses."
The Arizona Daily reports
that the nursing students paid about $30,000 each for training that left them ineligible to sit for the state's required licensing exam.
Among other allegation against Brown Mackie, the suit alleges that an admission test was a "sham" because all who applied were admitted.
According to the newspaper, Arizona's state nursing board placed Brown Mackie's nursing program on two years' probation and the school agreed to stop registering new students.
Brown Mackie is owned by Pittsburgh-based Education Management Corporation.
Current and former students who wish to share their concerns about their nursing or other trade school program with attorneys at CollegeWatchdogs.net may do so here
The U.S. Department of Education is sorting through nearly 20,000 loan-forgiveness requests from students asserting that their for-profit colleges misled them when they took on heavy debt burdens to pay for expensive programs.
The Wall Street Journal recently reported that the Department of Education is processing 19,657 so-called "borrower's defense requests" in which former students have an opportunity to demonstrate that they were misled at the time of enrollment with promises relating to programs and job placement.
To date, the government has allowed around 3,400 borrowers to cancel $27 million in student loan debt, with the vast majority relating to former students of Corinthian Colleges, Inc., the for-profit giant that ran Everest, WyoTech and Heald College before it collapsed as a result of intense federal scrutiny.
The owner of University of Phoenix is halting mandatory arbitration with students who claim to have been deceived or defrauded by the school.
Apollo Education, which operates University of Phoenix and Western International University, announced that it will no longer include mandatory arbitration clauses in its arbitration agreements effective July1.
Previously, concerned students and graduates at the schools found that their recourse against Apollo was arbitration -- a private, out-of-court system for dispute resolution that often is more expensive and tilted heavily in favor of major corporations.
Arbitration clauses have received increasing scrutiny by the U.S. Department of Education and the federal Consumer Financial Protection Bureau
The Arizona Republic reports
that Grand Canyon University execs sold stock options for more than $5 million shortly after the for-profit education company canceled plans to convert to a non-profit entity.
A spokesman for Grand Canyon told the newspaper that the sales in the March 2016 timeframe were not related to the non-profit decision.