The Consumer Financial Protection Bureau has recently become more aggressive in investigating for-profit colleges. This past summer, it announced it is conducting a probe involving the Accrediting Council for Independent Colleges and Schools, which accredits more than 900 colleges and universities in the United States. The investigation was organized to determine whether the accreditation of some for-profit colleges has involved illegal activity, according to an ACICS federal filing seeking to drop or modify the bureau’s investigation.
So far, the investigation has been kept relatively under wraps. It’s not even clear whether the bureau is pursuing the accrediting council or the colleges under its accreditation. If the bureau is pursuing the accreditor, this would be an unprecedented shift in the bureau’s watchdog activity.
In recent years, for-profit colleges have received significant, justified criticism. This past summer, the Department of Education — in its own words — “has cracked down on bad actors through investigations and enforcement actions.” More specifically, the DOE is attempting to discredit fraudulent, for-profit colleges that target low-income students because of their unique access to federal student loans, grants and military benefits. To do this, the DOE has demanded that colleges show their graduates make enough money to repay their student loans, a decision upheld by a federal court this past summer. Under current rules, the DOE can deny federal aid to roughly 5,500 career training programs if they don’t demonstrate gainful employment for their students.
And yet, even while the DOE attempts to crack down on an industry that undeniably needs reform, it continues to fund for-profit schools “that have been accused of predatory behavior, substandard practices or illegal activity by its own officials,” according to The New York Times. Hundreds of schools that have failed regulatory standards or been accused of illegal activity are receiving billions of dollars in government funds — often due to loopholes.
According to the DOE’s new rules, the government can withhold student loan payments when a college’s default rate surpasses 30 percent three years in a row. And nearly 100 schools have a student loan default rate that exceeds that number — but by getting students temporary deferments or forbearances, they manage to avoid maintaining that number for three consecutive years, mainly a result of financial trickery.
Because of this, perhaps it will be most effective for the Consumer Financial Protection Bureau not to waste its time going after individual for-profit colleges, and instead to go after the accrediting council for its accreditation processes. According to a report from the Center for American Progress, students who attended ACICS-accredited schools had higher levels of borrowing, debt and defaults, and lower graduation rates, than peers who attended colleges with different accreditors. If an accrediting council exists to rubber stamp fraudulent and harmful educational institutions, it may be more effective for the bureau to regulate the accreditor and eliminate fraud from the top down.
For-profit colleges can successfully propel students into the working world — but far too many of them exist to profit from struggling students with little return for their graduates. Currently, there are 98 for-profit schools on the DOE’s financial responsibility watch list. If the bureau can circumvent the need to individually investigate each school by going after an accrediting council, the federal government may be able to limit the damage of fraudulent for-profit colleges more effectively.
Read More
EDITORIAL: Scapegoating students will not stop hazing
By Editorial Board | 7 hours agoInstead of retroactively responding to extreme hazing allegations, we, and especially the University, must begin asking more probing questions about the role of fraternal organizations on Grounds.
EDITORIAL: Celebrating and reflecting on The Cavalier Daily’s independence
By Editorial Board | 6 days agoOur independence grants us the ability to ask the hard questions and to say what University representatives cannot.
ARRAS: U.Va. must revise the Sexual Assault Prevention Training module
By Aoife Arras | April 17, 2024In addition to its failures in interactivity, the module lacks details specific to the University and discusses key concepts in universal terms.
