Madigan calls on Duncan to
strengthen regulation of for-profit colleges
Attorney general files comments with
Department of Education to better protect students against abusive
industry practices
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[June
08, 2013]
CHICAGO -- Attorney General Lisa
Madigan has urged U.S. Secretary of Education Arne Duncan to
strengthen oversight of for-profit colleges and filed comments this
week with the Department of Education in support of requiring
schools to ensure students can pay off their loans and to make more
accurate and complete disclosures about their job placement rates.
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"Too often, with promises of higher-paying salaries and better job
prospects, young people in Illinois and across the country have been
lured into taking on huge amounts of debt to pursue diplomas at
for-profit schools," Madigan said. "Yet, over and over again, many
of these institutions' promises have proven empty, and young people
have paid the price, going deeply into debt to pursue diplomas that
leave them without better job prospects or higher salaries."
Many for-profit colleges and universities have achieved
eligibility to receive federal student aid by providing programs "to
prepare students for gainful employment in a recognized occupation,"
pursuant to the Higher Education Act. Yet, Madigan said, more
clarity is needed to define "gainful employment," given evidence in
Illinois that some for-profit schools make deceptive claims to
prospective students that induce them to enroll and take on
excessive debt loads, only to discover upon graduation that their
degree fails to qualify them for a job in their chosen career.
Madigan's comments cited a review of more than 1,500 student
complaints as part of her ongoing investigation of the for-profit
school industry's deceptive marketing and lending practices. Based
on that review, Madigan recommended the Department of Education
strengthen its rules to ensure for-profit schools meet the
obligation to prepare students for gainful employment in a
recognized occupation. Specifically, Madigan recommended that:
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For-profit schools
should be required to meet thresholds for their students'
debt-to-income ratios and repayment rates.
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For-profit schools
should be required to make clear job placement disclosures so
students understand how many graduates of their programs find
jobs in their fields.
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For-profit schools
should be restricted from finding new accreditors after a prior
accreditor cites them for poor practices.
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For-profit schools should be required
to provide students with clear, understandable disclosures about
their programmatic accreditations and what effect those
accreditations, or the lack thereof, have on students' job
prospects.
The comments filed Tuesday are Madigan's latest effort to address
abusive marketing and advertising tactics in the for-profit school
industry. In 2012, Madigan filed a lawsuit against the national
for-profit school Westwood College, alleging Westwood left many
students with anywhere from $50,000 to $70,000 in debt for degrees
that failed to qualify them for their chosen careers. The lawsuit
alleges that Westwood downplayed the ultimate cost of attending the
college and failed to provide students with sufficient information
about their loans. Madigan also settled a national lawsuit with the
company behind www.GIBill.com for deceptively steering U.S. service
members and veterans to use their federal education benefits with
the company's preferred clients in the for-profit schools industry.
Madigan has also testified before Congress on growing concerns about
the industry.
[Text from file received from the office
of
Illinois Attorney General Lisa
Madigan]
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