States Crack Down On Career Colleges, Student Loan Industry
Career College Central summary:
A number of states are working to protect college students as consumers, even as the federal government plays a more important role in regulating both career colleges and the student loan industry. Thirty-two states are now working together under the leadership of Kentucky Attorney General Jack Conway to investigate potential abuses in the career college industry, which saw enrollment more than triple between 1998 and 2008, according to the Consumer Finance Protection Bureau.
One reason for the concern is the amount of taxpayer dollars involved: Some career colleges receive 90 percent or more of their revenue from the federal and/or state governments in the form of student aid. “While some for-profit schools offer quality training and legitimate diplomas, we have found that this industry often markets subpar programs to veterans and low-income students who depend on federal aid,” Massachusetts Attorney General Martha Coakley said. “When students don’t receive the training they sign up for, or default on their loans, it not only greatly impacts their future but it also impacts taxpayers who have backed these loans in the first place.”
Coakley’s office is investigating DeVry, as are Illinois Attorney General Lisa Madigan and the Federal Trade Commission.
“We’re approaching them with a view toward transparency and an interest in demonstrating the compliant nature of our practices,” said Ernest Gibble, a spokesman for DeVry, on the investigations. DeVry declined to comment on Hastie’s particular situation, citing federal privacy restrictions.
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