|Speaker Ray Sansom|
Sounds like enough material for some high-profile state investigations, right? Actually, Attorney General Bondi is focusing her government investigation on a handful of small, for-profit schools. The charges against the schools largely revolve around allegedly false claims used by recruiters leading to enrollment of students who were under-qualified and/or unable to repay their loans upon completion.
Could it be that Bondi and others, including federal regulators, are attacking for-profit colleges chiefly because they have taken a piece of the higher education pie in recent years that was traditionally serviced by state-run community colleges and vocational schools? The fervor with which state officials in Florida, Kentucky, Texas, and other states are going after for-profit schools suggests motivation beyond the desire to prevent a few gullible students from falling for glitzy ad campaigns.
At the federal level, the Department of Education’s proposed ‘Gainful Employment’ rule would create new narrow metrics to define “gainful employment” based on student debt-to-income levels and loan repayment rates.
What the DOE’s formulaic approach is missing is that these institutions serve student communities with significant risk factors such as low incomes, full-time employment, and delayed enrollment which adversely impact degree attainment and account for their having a higher loan default rate than less inclusive institutions. Even with these challenges, the fact remains that for-profit colleges have a better record of graduating low-income and minority populations than public institutions and private, not-for-profit schools, at a substantially lower total government and taxpayer cost.