Durbin, Rep. Jackson Call on Department of Education to Create Interagency Task Force on For-Profit Colleges

05.09.24

Durbin, Rep. Jackson Call on Department of Education to Create Interagency Task Force on For-Profit Colleges

Inspired by Durbin and Jackson's Proprietary Education Oversight Task Force Act, the interagency task force would coordinate enforcement action against and increase accountability of for-profit colleges

WASHINGTON - U.S. Senate Majority Whip Dick Durbin (D-IL) and U.S. Representative Jeff Jackson (D-NC-14) today sent a bicameral letter to U.S. Secretary of Education Miguel Cardona urging him to create an interagency task force to coordinate action against and increase accountability of for-profit colleges.

"We write to urge the Department of Education (Department) to stand up an interagency task force on for-profit colleges, similar to the task force that would be created in our bill, the Proprietary Education Oversight Task Force Act (S. 3727 and H.R. 7804), and that was created by the Department in 2014," the lawmakers wrote.

The task force would be modeled after the interagency committee designed in Durbin and Jackson's Proprietary Education Oversight Task Force Act, which would establish an interagency committee tasked with improving coordination of federal oversight of for-profit colleges to ensure that students are not scammed out of an education and into a mountain of debt. The bill would require the committee to publish an annual report, detailing enforcement actions taken against for-profit colleges across federal agencies, as well as require the committee to publish a For-Profit College Warning List for potential students to help them make informed decisions about their options for post-secondary education.

Continuing the letter, the lawmakers outlined the for-profit college industry's long history of employing a predatory business model designed to aggressively target veterans, service members, low-income students, and students of color in recruitment efforts to access federal student aid without providing an adequate education.

"While the for-profit college industry enrolls only eight percent of U.S. college students, it accounts for 30 percent of all student loan defaults. In addition, students attending a for-profit college are more likely to use federal loans, have larger debts, default at higher rates, and experience worse labor market outcomes compared to their peers who attend a public college or university," the lawmakers wrote.

The Department previously used an interagency task force to conduct more oversight on the for-profit industry, but under the Trump Administration, then-Secretary of Education Betsy DeVos eliminated the task force and stacked the agency with proponents of for-profit schools. Then-Secretary DeVos also eliminated the Gainful Employment Rule, which sanctioned the worst performing career preparation programs, many of which were for-profit colleges. DeVos also allowed borrower defense claims to pile up, preventing nearly 230,000 borrowers who were scammed by for-profit colleges from receiving student loan relief.

"In 2014, the Department created an interagency task force to coordinate oversight and enforcement over this predatory industry. While the task force was important in promoting cooperation between federal agencies and state attorneys general, then-Secretary Betsy DeVos, an ally of proprietary education, quickly dismantled it," the lawmakers continued their letter.

The lawmakers went on to explain a new set of tactics used by for-profit colleges to evade accountability-being acquired by a credible, trusted school. Durbin has repeatedly warned public universities against acquiring for-profit schools, and he wrote to University of Arizona and the University of Idaho, warning against their purchase of for-profit schools.

"They [for-profit colleges] have continued to prey on students by converting to nonprofit status or merging with a trusted public university system. In 2020, the University of Arizona (Arizona) acquired Ashford University (Ashford), a for-profit college that had been investigated by the Departments of Defense and Veterans Affairs, the Consumer Financial Protection Bureau, and multiple state attorneys general," the lawmakers wrote. "Despite these warning signs, Arizona continued its acquisition of Ashford. Arizona now faces financial turmoil, as the Department is seeking to recoup $72 million in borrower defense discharges and after the California Attorney General reached a multimillion-dollar settlement."

"Now, despite the events at Arizona, the University of Idaho (Idaho) is trying to purchase the University of Phoenix, another duplicitous for-profit college with a long track record of defrauding veterans and service members. Although Phoenix was investigated by the Federal Trade Commission (FTC) in 2019-resulting in the largest settlement between the FTC and a for-profit college-and the Department is trying to recoup $37 million in borrower defense discharges, Idaho is continuing to pursue the acquisition. Millions of taxpayer dollars and the future of tens of thousands of students are at stake in this transaction," the lawmakers continued their letter.

The lawmakers concluded their letter by explaining the importance of bringing together multiple agencies to coordinate oversight on the for-profit industry.

"Holding these schools accountable requires the cooperation multiple federal agencies working together. Too often, one federal agency will take enforcement action against a for-profit college, but not in coordination with other federal agencies. An interagency for-profit college task force would improve collaboration and the information available to federal agencies, policymakers, parents, and students," the lawmakers wrote.

"As outlined in our bill, the task force should work to coordinate enforcement action against and increase accountability of for-profit colleges. The representatives on the task force also should be comprised of high-ranking agency officials. The task force should publish an annual, whole-of-government report on the for-profit college industry that includes student complaints; enforcement actions against institutions; student outcome data; and financial information related to executive compensation, marketing, and federal funding. The task force also should publish a warning list for students, parents, and high school educators that includes for-profit schools that are under state or federal investigation or face enforcement action," the lawmakers concluded.

In addition to Durbin, U.S. Senators Jeff Merkley (D-OR) and Elizabeth Warren (D-MA) also signed the letter.

In addition to Jackson, U.S. Representatives Alma Adams (D-NC-12), Suzanne Bonamici (D-OR-01), Maxine Waters (D-CA-43), and Rosa DeLauro (D-CT-03) also signed the letter.

A copy of the letter is available here and below:

May 9, 2024

Dear Secretary Cardona:

We write to urge the Department of Education (Department) to stand up an interagency task force on for-profit colleges, similar to the task force that would be created in our bill, the Proprietary Education Oversight Task Force Act (S. 3727 and H.R. 7804), and that was created by the Department in 2014.

For-profit colleges have a long history of defrauding students and targeting vulnerable populations, including students of color, veterans, single mothers, and low-income students. While the for-profit college industry enrolls only eight percent of U.S. college students, it accounts for 30 percent of all student loan defaults. In addition, students attending a for-profit college are more likely to use federal loans, have larger debts, default at higher rates, and experience worse labor market outcomes compared to their peers who attend a public college or university.

Many of the enforcement actions that could be taken against proprietary institutions involve multiple federal agencies. In 2014, the Department created an interagency task force to coordinate oversight and enforcement over this predatory industry. While the task force was important in promoting cooperation between federal agencies and state attorneys general, then-Secretary Betsy DeVos, an ally of proprietary education, quickly dismantled it.

While some for-profit colleges such as Corinthian Colleges and ITT Technical Institute have shuttered their doors, other disreputable for-profit colleges have found new ways to avoid accountability. For example, they have continued to prey on students by converting to nonprofit status or merging with a trusted public university system. In 2020, the University of Arizona (Arizona) acquired Ashford University (Ashford), a for-profit college that had been investigated by the Departments of Defense and Veterans Affairs, the Consumer Financial Protection Bureau, and multiple state attorneys general. Despite these warning signs, Arizona continued its acquisition of Ashford. Arizona now faces financial turmoil, as the Department is seeking to recoup $72 million in borrower defense discharges and after the California Attorney General reached a multimillion-dollar settlement.

Now, despite the events at Arizona, the University of Idaho (Idaho) is trying to purchase the University of Phoenix, another duplicitous for-profit college with a long track record of defrauding veterans and service members. Although Phoenix was investigated by the Federal Trade Commission (FTC) in 2019-resulting in the largest settlement between the FTC and a for-profit college-and the Department is trying to recoup $37 million in borrower defense discharges, Idaho is continuing to pursue the acquisition. Millions of taxpayer dollars and the future of tens of thousands of students are at stake in this transaction.

We appreciate the Department's work to protect students from predatory for-profit colleges, including providing borrower defense discharges to students and fining Grand Canyon University for misleading students about its cost. However, holding these schools accountable requires the cooperation multiple federal agencies working together. Too often, one federal agency will take enforcement action against a for-profit college, but not in coordination with other federal agencies. An interagency for-profit college task force would improve collaboration and the information available to federal agencies, policymakers, parents, and students.

As outlined in our bill, the task force should work to coordinate enforcement action against and increase accountability of for-profit colleges. The representatives on the task force also should be comprised of high-ranking agency officials. The task force should publish an annual, whole-of-government report on the for-profit college industry that includes student complaints; enforcement actions against institutions; student outcome data; and financial information related to executive compensation, marketing, and federal funding. The task force also should publish a warning list forstudents, parents, and high school educators that includes for-profit schools that are under state or federal investigation or face enforcement action.

Thank you for your consideration and commitment to protecting students and taxpayers.

Sincerely,

-30-

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