Because the media loves discussing Donald Trump, it wasn’t surprising to see heavy press coverage of a lawsuit brought by New York Attorney General Eric Schneiderman accusing the unlicensed Trump University of “persistent fraudulent, illegal and deceptive conduct.” Trump responded by harshly attacking Schneiderman, whose suit demands that Trump pay back at least $40 million to the 5,000 people who were enticed into paying $10,000 to $35,000 for real estate investment courses “that did not deliver on their promises.” Trump University’s sad broken promises included telling some students they would get a photo-op with the Donald, when all they got was a picture with a cardboard cutout. But the real fraud was convincing enrollees that the Trump-owned for-profit “university” would get them on the path to a successful career, which apparently didn’t happen for many of them.
What is most significant about the Trump dust-up is that the conduct alleged — false promises, high prices, weak educational programs, and terrible outcomes for many students — has been playing out for decades all across America at a wide range of for-profit colleges. Indeed, victims of these other schools are often left much worse off than the students at Trump University: Many start poorer — veterans, single parents, students of color, immigrants, people struggling to support themselves; many fall prey to misleading ads and high-pressure sales tactics; and many graduate or drop out owing much more than the Trump students, sometimes over $100,000. And for-profit colleges students often find that their degrees do nothing to help them get good jobs.
Worse, many of these programs, in contrast to Trump University, are eligible for federal and state financial aid, meaning that taxpayers are left paying much of the bill. The U.S. government has provided as much as $32 billion in a single year in financial aid for for-profit college programs, many worthless. The biggest for-profit colleges get around 86 percent of their revenue from taxpayer money.
Not all for-profit colleges are bad, and even in some of the most unethical, predatory schools, there are good teachers and programs. But overall the picture is extremely troubling.
For-profit colleges are a huge driver behind the $1 trillion student debt crisis and the countless ruined lives that have resulted; they have about 13 percent of U.S. college students, but 47 percent of all student loan defaults.
Big for-profit colleges created this enormous racket by lobbying Congress for special advantages — and backing up their lobbying with campaign contributions. In the past couple years, the media, the public, and government investigators have gotten wise to the abuses of for-profit colleges, and enrollment and stock prices have fallen sharply. But while many for-profit colleges have proven to be failures at educating students, they remain really good at lobbying. Using aggressive lawsuits as well as friends they buy on Capitol Hill, Republicans but also some Democrats, these wealthy education companies have thwarted efforts by the Obama Administration to hold predatory schools accountable, and their relentless lobbying continues to this day. They appear to be hoping they can ride out the bad publicity and get back to making huge profits, which sometimes fuel obscenely high executive salaries.
It looks, however, like the Obama Administration is finally ready to make a strong push against predatory for-profit colleges. The new Consumer Financial Protection Bureau is pressing for industry reforms to protect students. The Pentagon and Veterans administration are demanding that colleges stop misleading and mistreating our troops and vets. The Justice Department is pursuing legal actions, as is the Securities and Exchange Commission, and there is potential for the Federal Trade Commission to do the same. Over strenuous objections by the for-profit colleges, the Department of Education is renewing its effort to establish rules to cut off aid to for-profits and other trade schools that consistently leave students unable to pay back their loans. And last Friday, the President himself, speaking off the cuff, offering a strong indictment of abuses by this arrogant industry.
Citizens need to demand that the President see this fight through, because there is evidence from all across America that the for-profit college industry will keep abusing students until it is fundamentally reformed:
There are thousands more stories of for-profit college deception and abuse, many documented in a comprehensive 2012 report from Senator Tom Harkin or exposed in a joint investigation by a bipartisan group of 32 state attorneys general — of schools deceiving students about the usefulness of their degrees; of boiler room operations charged with getting student “asses in classes,” even where students would never be capable of finishing the work; of weak online or in-person classes where students are taught almost nothing; of dropout rates of 70 or 80 percent; of students left deep in debt, their dreams and lives destroyed.
While none of the major predatory for-profit college companies — University of Phoenix, EDMC, Corinthian, Kaplan, CEC, etc. — have a frontman as publicly odious as Donald Trump, their abuses and harms go much deeper than those of Trump University. For the sake of our fiscal responsibility, our students, and our economy, their reckless joyride must end. They need to dramatically reform, or America needs to tell them, all together now: You’re fired.
This article also appears on Huffington Post.
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