On Monday, the U.S. Department of Education announced that it’s establishing a new office to address the complaints of students who attended for-profit colleges. In particular, this new initiative, the Student Aid Enforcement Unit, will investigate colleges that engage in misleading marketing—presenting overly optimistic statistics about graduation and employment rates—and will be able to punish colleges by cutting off their access to federal student loans and grants.
The momentum has been building for quite some time for the federal government to crack down on for-profit colleges’ marketing tactics. Last year, thousands of for-profit students applied to have their federal student loans forgiven on the grounds that they were recruited under false (and illegal) pretenses. In December, the Department of Education agreed to forgive $28 million worth of federal loans provided to students who attended the now-defunct Corinthian College. And last month, the Federal Trade Commission and the Department of Education announced that it would take action against DeVry University for deceptive marketing claims.
Federal funding is the primary source of revenue for for-profit colleges, which have faced a barrage of criticism: Some say they offer poor results at high prices and others say they exploit veterans and low-income students. On top of this, for-profit schools’ low graduation rates and high loan-default rates have been highly publicized. These colleges, for their part, have defended themselves by saying that they are taking in non-traditional students for vocational training and providing educational opportunities for those who don’t have other promising options. And that’s why, they insist, the outcomes of these students are not comparable to those of students who attend state universities or top-tier schools.