NCPA - National Center for Policy Analysis

Regulators Target For-Profit Colleges

May 29, 2014

The Federal Trade Commission along with state attorneys general are looking into whether for-profit colleges are deceiving students, according to a report in the Wall Street Journal.

For-profit schools enroll 13 percent of all higher education students, but investigations are underway to determine whether the schools have misled students about the strength of their programs.

Some students argue that the schools used deceptive marketing, with students taking on tens of thousands of dollars in debt, only to learn that their accredited degree is one not widely accepted by employers. Many lawsuits have already been filed against these colleges:

  • Tom Miller, Iowa's Attorney General, settled a lawsuit with Ashford University and Bridgepoint Education for $7.25 million at the beginning of May. Iowa had accused Ashford of misleading students into believing that their online degree would allow them to become classroom teachers, failing to disclose that additional coursework would be required. The school denied this.
  • Earlier in the year, New Mexico's attorney general sued ITT Educational Services, alleging that the school claimed to be on target to receive accreditation from a national nursing group. The case is still pending.
  • In Colorado, the state attorney general settled for $3.3 million with Argosy University. The state alleged that Argosy misled students into believing that participation in their psychology program would allow them to become licensed psychologists and that the program was on track for accreditation by the American Psychological Association.
  • Bryan Babcock, a veteran of the Marine Corps, did not complete a law enforcement program at ITT Technical Institute when he discovered that more than 20 police departments did not recognize the accreditation. Babcock had accumulated $50,000 in student loan debt during his three years of study.

But officials from for-profit colleges deny the allegations, saying that they always disclose to students that there are no guarantees that they will be able to find employment in their chosen fields of work. Noah Black, spokesman for the Association of Private Sector Colleges and Universities, says that the investigations are merely the result of "activist attorneys general partnering with individuals that are ideologically opposed to our institutions."

Source: Alan Zibel, "For-Profit Colleges Face Test From State, Federal Officials," Wall Street Journal, May 26, 2014.


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