Career Colleges Face New Wave Of Coordinated State Probes
Career College Central summary:
Career colleges, bruised by years of investigations and rule-making, may face additional financial pressure from a new wave of state probes by attorneys general and the U.S. Consumer Financial Protection Bureau.
The Federal Trade Commission has stiffened guidelines for marketing vocational training programs, which many for-profit colleges offer. The CFPB, created in 2011 to regulate financial products, has said it’s preparing to tackle student debt, which has climbed to $1.2 trillion and is pervasive among former students at for-profit colleges. Richard Cordray, head of the consumer bureau and a former Ohio attorney general, said in written testimony to a House panel yesterday that the bureau has received thousands of complaints and comments about private student loans and debt.
“A coordinated approach benefits all the parties involved,” Kentucky Attorney General Jack Conway, who is chairman of a group of state attorneys general investigating the education industry, said in a telephone interview. “It helps to have federal agencies looking at this as well in order to make sure that federal education money and taxpayer dollars are being spent wisely.” If they find wrongdoing, attorneys general typically file civil suits that seek monetary damages or restitution and changes in corporate behavior, said Allison Martin, a spokeswoman for Conway.
Education Management Co. (EDMC), the education chain partly owned by Goldman Sachs Group Inc.; Corinthian Colleges Inc. (COCO); ITT Educational Services Inc. (ESI); and Career Education Corp. (CECO) have said since Friday that they’ve received demands for information from a network of at least 12 attorneys general.
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