June 30, 2015 by
Corinthian Colleges has become the poster child for what’s wrong with the for-profit college industry. It misrepresented its job placement — the eligibility criteria for it to receive federal funds — and abruptly closed its doors when the federal government demanded some accountability.
The immediate victims of this business’ collapse are the thousands of students left with debt, worthless degrees, or both. The secondary victims are taxpayers: 350,000 former Corinthian students now qualify for loan relief, totaling $3.5 billion in taxpayer money that will not be paid back.
And yet, there are efforts on Capitol Hill that would set up conditions for catastrophes like Corinthian to continue to happen. Amendments to education spending bills currently in the House and Senate would prohibit the federal government from even minimum oversight of career education programs, even though blocking the gainful employment regulation would increase spending by $2 billion over 10 years. The gainful employment regulation ensures that programs that claim to prepare students for placement and success in high-demand careers are held accountable. (Check out this helpful Q&A.)
Without some oversight, schools like Corinthian legally can get away with educational malpractice. Before the feds started probing, Corinthian was bringing in $1.4 billion annually in student loan money. The company was using federal money to turn a profit, even if its career training schools weren’t equipped to teach the knowledge and skills students expected to learn. And it likely would have continued to do so if the federal government hadn’t had the oversight to protect students from fraud.
What’s worse is that Corinthian is not the only career education company that puts profits above student success. To protect students and taxpayer dollars, Congress should beef up — not strip down — the government’s efforts to identify and punish fraudulent institutions that prey on students who are seeking to make a better life for themselves.