Wednesday, July 09, 2014

Lessons of a For-Profit College Collapse

JULY 8, 2014

For-profit colleges are lobbying hard to weaken rules proposed by the Obama administration that would deny federal aid to career training programs that burden students with crippling debt and worthless credentials. But a recent spate of state and federal investigations into potentially predatory behavior by the for-profit sector — combined with the collapse of Corinthian Colleges, one of the country’s largest operators of for-profit colleges and trade schools — makes clear that the rules need to be strengthened and that federal oversight generally needs to be broadened.

That’s the only way to shield students and taxpayers from exploitive or irresponsibly managed for-profit institutions that rely on federal student aid for up to 90 percent of their revenue.

Corinthian, which is being investigated by federal regulators and by several states, has finally come to a kind of reckoning. It has reached an agreement with the Department of Education to shut down or sell about 100 campuses during the coming months.

The department, which began investigating the company in January, will appoint an independent monitor to oversee Corinthian’s operations and look after the interests of its 72,000 students and 12,000 employees during the process of winding down. By taking the gradual approach, the federal government avoided an instant shutdown, which would have been bad for students and workers involved.

(More here.)


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