NEW YORK (MainStreet) — Students at for-profit colleges typically get whacked by a double whammy. Not only do they pay sky-high tuition leading to big student loan balances, but they are generally unable to transfer their credits when they try to leave. Senator Dick Durbin (D-Ill.) wants to call a halt to federal investment in the for-profit colleges that stick students with credits that the rest of higher ed doesn't recognize.
“Federal oversight agencies can barely keep pace with an industry whose primary focus seems to be finding new ways of exploiting federal education programs to access taxpayer dollars,” said Durbin. “And now we have evidence that even unaccredited institutions have found a loophole allowing them to fleece taxpayers while taking advantage of America’s veterans. This is disgusting.”
Durbin met with Rohit Chopra, senior fellow at the Center for American Progress (CAP) and former student loan ombudsman at the Consumer Financial Protection Bureau, to discuss solutions. Why this meet-up was held now and not when Chopra was still in the federal government is not clear. It's also not clear why Durbin didn't enlist colleagues on the Senate Health, Education, Labor and Pension Committee to accompany him. Durbin spokesperson Christina Mulka did not respond to a request for comment. Since he left the CFPB, Chopra has called the student loan system "broken" and seems to be aligned with higher ed critics who want to tear it down and start over. It’s not clear what he can do at CAP that he couldn’t do at the CFPB.
Concern about the ability to transfer credits suggests a larger issue--that these for-profit colleges are still in business and enrolling new students in the first place. The University of Phoenix (UOP), the largest for-profit college, has been known to give credit for military training to ex-GIs that have nothing to do with their course of study. But GIs are road kill—and a dependable source of money—for the for-profit industry.
Last week the University of Phoenix (UOP) was found at a Ft. Campbell, Ky. concert recruiting on the base, its logo in lights extolling UOP’s "30+ years of proud service to our military community." UOP was even handing out swag that appropriated military emblems and insignias and combined them with the UOP logos. A UOP spokesperson could not be reached for comment.
In a speech to the Senate last week, Senator Durbin mentioned that the University of Phoenix got 84% of its revenue from federal Title IV funding and the Department of Education. Federal law prohibits for-profit colleges from getting more than 90% of its revenue from Uncle Sam. However, veterans GI Bill benefits and Department of Defense Tuition Assistance programs are excluded from the 90% cap on UOP’s Federal benefit calculation, which helps explain why they recruit GIs so aggressively. Durbin and Senator Tom Carper (D-Del.) have introduced legislation that would close this loophole.
The University of Phoenix and its course offerings seem conventional compared to other for-profits such as the Christ of Nations Institute in Dallas, the Advanced Study of Human Sexuality in San Francisco and the Oklahoma Baptist College Institute. None are accredited, all take tuition money from Veterans GI Bill benefits and the Department of Defense.