Ensuring Oversight of Private, For-Profit Postsecondary Schools

Overview

On behalf of vulnerable adult student populations such as military veterans and former foster youth, the Center for Public Interest Law (CPIL) and Children's Advocacy Institute (CAI) are advocating to improve the oversight and regulation of private, for-profit postsecondary schools. Too often, these for-profit schools charge high tuition, spend public funds and generate high debt for their students — with dubious results. Many of these schools engage in highly visible and potentially misleading marketing campaigns aimed solely at increasing their profits, and they are not committed to providing students with a quality education. Due in part to the lack of appropriate student support services provided by these schools, many students drop out prior to graduating, and those who do graduate rarely find the lucrative careers commonly touted in the schools' ubiquitous advertising. Either way, they are saddled with debt that many are unable to climb out from under.

A July 2012 report by Sen. Tom Harkin (D-IA) and the Senate Health, Education, Labor and Pensions (HELP) Committee revealed that although federal taxpayers are investing billions of dollars a year in for-profit colleges, “more than half of the students who enrolled in in those colleges in 2008-9 left without a degree or diploma within a median of four months.” Consider some of the other findings from this report:

  • For-profit colleges are owned and operated by businesses. Like any business, they are ultimately accountable by law for the returns they produce for shareholders. While small independent for-profit colleges have a long history, by 2009, at least 76% of students attending for-profit colleges were enrolled in a college owned by either a company traded on a major stock exchange or a college owned by a private equity firm. The financial performance of these companies is closely tracked by analysts and by investors.
  • Congress has failed to counterbalance investor demands for increased financial returns with requirements that hold companies accountable to taxpayers and students for providing quality education, support, and outcomes. Federal law and regulations currently do not align the incentives of for-profit colleges so that the colleges succeed financially when students succeed.
  • Many for-profit colleges fail to make the necessary investments in student support services that have been shown to help students succeed in school and afterwards, a deficiency that undoubtedly contributes to high withdrawal rates.
  • More than half a million students who enrolled in 2008-09 left without a degree or certificate by mid-2010. Among two-year Associate degree-seekers, 63% of students departed without a degree.
  • The vast majority of the students left with student loan debt that may follow them throughout their lives, and can create a financial burden that is extremely difficult, and sometimes impossible, to escape.
  • In the absence of significant reforms that align the incentives of for-profit colleges to ensure colleges succeed financially only when students also succeed, and ensure that taxpayer dollars are used to further the educational mission of the colleges, the sector will continue to turn out hundreds of thousands of students with debt but no degree, and taxpayers will see little return on their investment.

CPIL and CAI have joined with a USD-wide campaign to address these abuses. The USD Initiative to Protect Student Veterans joins the efforts of military leaders and elected officials to educate and protect military veterans from the misleading practices of some for-profit educational institutions and lenders. Under the direction of Col. Patrick Uetz, USMC (ret.), the Initiative’s multi-pronged approach includes

  • a research component;
  • the Veterans Legal Clinic, which assists veterans who have disputes with for-profit schools or lenders over the use of GI Bill funds and education related loans, and which is directed by Robert F. Muth, who previously served as a Captain and Judge Advocate in the U.S. Marine Corps; and
  • state and federal advocacy led by CAI and CPIL, along with powerful allies such as Public Advocates assisting us on our state work and noted youth education advocate David Halperin contributing greatly to our work at the federal level.

Read more information on CPIL/CAI's advocacy and ongoing activities in this area.

Resources

Contact:

Center for Public Interest Law
5998 Alcalá Park
San Diego, CA 92110
Phone: (619) 260-4806
Fax: (619) 260-4753

Sacramento Office
2751 Kroy Way
Sacramento, CA 95817
Phone: (916) 844-5646