Rep. Waters Introduces Students Before Profits Act
WASHINGTON – Today, Congresswoman Maxine Waters, Ranking Member of the Committee on Financial Services, introduced the Students Before Profits Act, a bill recently introduced in the United States Senate by Senators Christopher Murphy and Richard Durbin, and co-sponsored by Senators Elizabeth Warren, and Sherrod Brown. This legislation protects students against deceptive practices by predatory for-profit institutions of higher education.
"For years, the for-profit college industry has inflicted havoc and chaos in the lives of students across the nation," said Congresswoman Waters. "It is time to hold these institutions responsible for their fraudulent practices which prioritize profits over providing a quality education for the students they serve."
The for-profit college sector has recently come under heavy state and federal scrutiny following the closure and bankruptcy of Corinthian Colleges, which deceived students for decades by steering them into high-interest student loans based on manipulated graduation rates and employment data. Even after its closure, Corinthian students, remain saddled with debt, worthless degrees, and few prospects for employment.
The Students Before Profits Act authorizes enhanced penalties on for profit colleges and their executive officers if it is determined that the institution misrepresented its costs, admission requirements, completion rates, employment prospects or student loan default rates.
Additionally, the bill allows the Department of Education to require owners and executives of fraudulent for-profit colleges to assume personal liable for financial losses associated with Title IV funds.
Further, penalties and fines collected from the enforcement of this Act will be placed in a Student Relief Fund that would be used to provide financial relief to defrauded students.
Lastly, the Act also improves oversight over the for profit college industry by requiring the Department of Education to correct the data from any for profit institution that has engaged in default manipulation. Even with the demise of Corinthian, schools such as the University of Phoenix and ITT Technical Institute continue to face federal scrutiny for engaging in similar fraudulent practices and we must implement policies to combat this harmful trend.
Despite current and ongoing efforts by advocates, students, legal aid workers, and the Department of Education to mitigate the effects of students impacted by these schools and their subsequent closures, it is clear more must be done.
"The Students Before Profits Act will go one step further in providing the tools necessary to bring much needed regulation and oversight to an industry that reaps enormous profits from taxpayers' dollars and damages our students' futures," said Rep. Waters.