Key black leaders are divided on the Obama administration’s increased regulation of for-profit colleges, with some casting the schools as saddling students with huge debt and little job prospects while others say they are the only path to higher education for many low-income and minority students.
For-profit schools, such as Kaplan University, have faced heightened scrutiny by the administration after numerous investigations by state and federal investigators showed many of them exaggerated job placement success and poorly counseled students on loans.
Under new administration rules, such schools must prove students are netting “gainful employment” or lose access to federal financial aid funds. This type of money is essentially the lifeblood of these schools, as the vast majority of their students rely on financial aid to pay their tuition.
Some black members of Congress liken these schools to the housing industry before the 2008 mortgage crisis.
“I and some of the members of the Congressional Black Caucus have taken on this issue because our communities have been harmed,” said Rep. Maxine Waters, D-Calif, long a critic of what she sees as predatory practices among some of the nation’s for-profit colleges. “It’s a rip-off and the jobs that were promised were never forthcoming and (the students) ended up having to pay back the government those loans.”
Ben Jealous, president of the NAACP, said “the worst actors in this industry prey on poor and vulnerable students, those who are often the first to go to college, and those who are retraining to enter the work force.”
But others say such schools are the only path to a college degree for many low-income and first generation students.
“Career colleges are different only in that they are the schools of choice for many at-risk students, including minorities, parents and full-time workers who believe these schools offer them the best shot at a good job in a field they will enjoy,” Urban League president Marc Morial wrote in an op-ed to the Washington Post last year.
“The last thing that students already constrained by poverty need is another, government-erected barrier to a better life.” Rep. Alcee Hastings, D-Fla., and a member of the Congressional Black Caucus wrote an op-ed last year for Politico also praising the benefits of such schools.
“In these tough economic times,” Hastings wrote “more than ever, adult students, full-time workers, folks from low-income families and many African Americans and Latinos turn to these institutions because of their career-focused training, job-placement help and flexibility.”
At stake is more than $30 billion in federal student aid — money the for-profit college industry has lobbied hard to keep in the wake of the regulatory crack down by the Obama administration.
Students at for-profit colleges are more likely to be minorities, rely heavily on student loans and face a greater risk for default, education experts say. Student loan debt, unlike other types of debt, can not be discharged in a bankruptcy.
