Associated Press: In Mass., a push for tighter regulations on for-profit colleges with aim to protect students
By: Steve LeBlanc
January 25, 2014
BOSTON - Two top Massachusetts elected officials are trying to tighten regulations on for-profit colleges, arguing some of the schools are leaving students with high debt and without the skills needed to land a good job - all while reaping the benefit of federal student loans.
Democratic U.S. Sen. Elizabeth Warren has filed a bill she said will protect student borrowers by requiring colleges to assume some of the risk of student loan default.
Massachusetts Attorney General Martha Coakley, also a Democrat, is proposing new state regulations prohibiting for-profit and occupational schools from using misleading advertising and unfair lending practices.
Coakley has also sued a now-shuttered for-profit school, alleging it falsified student enrollment records, attendance and grades to benefit from government-funded student loans while failing to provide course materials and training.
Coakley said that while many for-profit schools provide an important service, some use a "predatory model" that advertises heavily to those with access to federal loans, including returning veterans or low-income students.
"The students end up either not completing the program or completing it and then not getting a job and so they're behind the eight ball. They've lost the time. They've lost their money. They default on the loan. And now they've got a credit problem," Coakley said in an interview with The Associated Press.
"Meanwhile all that money goes into the bank, into Wall Street. A lot of this is funded by investors who see this as another way to make money without worrying about what the impact is going to be on students."
Warren also argued that for-profit colleges are draining billions in student loans without giving students a meaningful education.
"That (debt) crushes the student and imposes losses on the taxpayers and yet the for-profit college just keeps making money," Warren said in a separate interview.