There may be no more egregious example of corporate interests preying on the innocent on behalf of their shareholders than the for-profit college industry. The consequences are even worse than those stemming from predatory mortgage lenders; unlike a mortgage, student loan debt cannot be discharged in bankruptcy. Students who are deceived into enrolling in for-profit institutions are left with no exit — and no recourse. It is a tragedy of the highest degree, counter to our nation’s values. And it must be stopped.
At least 16 states have passed or proposed laws regulating for-profit colleges . The Obama administration, too, is working to regulate the industry. New rules will take effect in July that will prevent for-profits from paying recruiters based on the number of students they enroll, a process that encourages deceptive practices.
Katrina vanden Heuvel
Editor and publisher of the Nation magazine, vanden Heuvel writes a weekly column for The Post.
The Education Department is also considering what’s known as a “gainful employment” rule, which would prevent for-profits that fail to meet certain standards from being eligible for federal financial aid programs. The ineligible group would include colleges with high student-loan default rates and ones at which students end up having to put a large part of their salaries toward paying down their debt. But that important rule, which was supposed to be implemented in 2010, has been delayed. The Education Department now says it will take effect in 2012, but many who follow the issue closely remain skeptical.
That’s because for-profit colleges are fighting tooth-and-nail to prevent the rules from taking effect. According to the Sunlight Foundation, in 2010, the industry spent $7.57 million on lobbying, which was more than three times what was spent in 2009. It also contributed more than $1.3 million to political campaigns. The industry’s efforts are only expected to intensify. So, too, must the efforts of those fighting for legislation to rein in the for-profits.
Our debt “crisis” has become something of a national obsession — and a misplaced one at that. For all the talk of debts and deficits, we too often ignore this crisis, the real debt crisis, and its impact on millions of Americans. We owe them better.