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Congresswoman Maxine Waters

Representing the 43rd District of California

How For-Profit Colleges Are Ripping Off Taxpayers and Bankrupting Our Students

April 28, 2015
Opinion Piece

Originally appeared on Medium.

Pamela Hunt started working when she was just 14 years old. She’s now a 55-year-old home health care worker in Ledyard, Connecticut, and is the mother of eight children. Like so many Americans, she boldly decided to go back to school after long desiring a career change.

What Hunt didn’t anticipate was being buried in nearly $60,000 worth of debt for a master’s degree in criminal justice considered worthless by most employers.

You see, Hunt attended a for-profit online college owned by Corinthian Colleges, Inc. — a corporation with a conglomerate of schools that operate under the brands of Everest College, Heald College, and WyoTech. As of Sunday, Corinthian schools are thankfully closed. Since February, Corinthian students — now 100 of them — have decided to protest their federal debt payments because of Corinthian’s fraudulent and predatory practices. But the industry is much larger than Corinthian — and it’s booming.

The for-profit college industry’s enrollment and profits have skyrocketed. Students attending for-profit institutions more than tripled from 1998 to 2008, totaling approximately 2.4 million students.

Additionally, three-quarters of students are at colleges owned by huge publicly traded companies — which is the root of the problem. Many for-profit colleges exist not to educate their students, but to line the pockets of their executives and shareholders. And the data prove my point.

In 2012, a report from the Senate Health, Education, Labor, and Pensions (HELP) Committee led by former Chairman Tom Harkin (D-IA), revealed that nearly 63 percent of students at a for-profit college in the 2008–09 school year left before finishing their associate’s degree. Even worse, the median student lasted only four months. These outcomes are unconscionable.

The Senate report also discovered that out of the for-profit institutions they examined, the colleges had nearly 33,000 recruiters as opposed to only 3,500 career services staff members. Recruiters were also encouraged to be vague, and sometimes dishonest, when discussing costs and student aid. Because of the institutional dishonesty within the system, students attending for-profit colleges account for nearly 50 percent of loan defaults while only making up 13 percent of the nation’s college enrollment.

Hunt’s story is sadly not the exception — it’s the rule.

For-profit colleges routinely target low-income and minority prospective students using deceptive and predatory practices. Schools such as Corinthian saddle students with debt, showing almost exclusively abysmal educational outcomes, and make almost all of their profits off of taxpayer funded federal education loans. And now, according to the Senate report, they’re aiming for our veterans’ G.I. benefits.

Just recently, I wrote a letter to the Department of Education, along with Congressional Progressive Caucus colleagues, urging Secretary Duncan to forgive federal loans incurred at Corinthian Colleges.

And today, I’m introducing the Court Legal Access & Student Support (CLASS) Act alongside Senator Dick Durbin (D-IL), which would prohibit schools receiving federal funding from limiting students’ access to courts in their enrollment agreements. Corinthian and other for-profit colleges force students to sign away their legal rights before enrollment. The CLASS Actwould restore students’ legal rights.

Students should not be punished for the illegal and dishonest behavior demonstrated by for-profit colleges. The financial burden should belong where the wrongdoing started — with the schools.

It’s clear to me that Congress must take action to protect students from for-profit colleges by enacting sensible regulations to the industry. Students deserve better. Veterans deserve better. Students shouldn’t go bankrupt for pursuing higher education — and it’s our job as elected officials to protect students from predatory institutions such as Corinthian.