Monday, April 25, 2011

Federal delay leads 17 states to consider regulation of for-profit colleges' recruiting

The U.S. Department of Education has delayed proposed restrictions on recruiting practices of for-profit colleges after opposition from industry lobbyists and Congress. Last fall the federal government began drafting the rules after a report from the Government Accountability Office revealed for-profit colleges "deceived potential students about graduation and job placement rates in the process of getting them to enroll and sign up for state and federal loans," David Harrison of reports. In the absence of federal action, some state lawmakers are cracking down.

"Legislators say they are simply trying to protect students and consumers in their states," Harrison writes. "Backers of the for-profit schools say fiscally troubled state governments are seeking to save money by restricting the amount of public aid that for-profit schools are entitled to." Deanne Loonin, a National Consumer Law Center laywer who tracks for-profit schools, told Harrison most of the lobbying has been at the federal level, but "There’s definitely been a lot of resources poured into the states, and I expect there will be more."

"According to the National Conference of State Legislatures, lawmakers in 17 states have introduced bills on for-profit colleges this year, many of them designed to tighten regulation of the schools," Harrison writes. Maryland's House and Senate passed bills that would "eliminate all state aid to for-profit schools, ban commissions or bonuses for student recruiting, and make all for-profit schools in the state contribute to a fund to protect students if any college in their group breaches a contract," Harrison writes. Gov. Martin O'Malley says he supports the bill and plans to sign the final version into law. (Read more)

A report released last week by State Auditor Crit Luallen says the Kentucky State Board for Proprietary Education, which oversees for-profit colleges, "provides inadequate oversight, hasn't had an outside financial audit in 10 years and lacks a clear understanding of its role," Cheryl Truman of the Lexington Herald-Leader reports. "The key point is, as a state, Kentucky has a need ... for more of our people to receive a quality education," Luallen said in a news conference. "This board really has to help protect the reputable schools from unfair competitive practices or schools that may be lacking in quality. Those color the whole reputation of the proprietary education industry." (Read more)

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