Harkin, Murphy Announce Students Before Profits Act
Will Continue the Effort to Hold For-Profit Colleges Accountable
WASHINGTON, D.C. – Today, Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, joined Senator Chris Murphy (D-CT) to announce their introduction of the Students Before Profits Act to help protect students from deceptive practices and bad actors in the for-profit college sector. The Students Before Profits Act will put power back in students’ hands by allowing them to make better informed decisions about what school to attend, while also holding subpar schools accountable. The bill would help to address many of the issues identified in the groundbreaking 2012 investigation of for-profit colleges Harkin led as Chairman of the HELP Committee.
“My investigation made clear that taxpayers have been making a huge annual investment in for-profit colleges that continue to leave millions of students with high debt but little increased earning potential,” Harkin said. “I am proud to cosponsor the Students Before Profits Act, a bill that takes concrete steps to hold for-profit colleges accountable for their students’ success. This bill builds upon provisions included in my Higher Education Affordability Act, and I am encouraged to see that strong champions in the next Congress will continue the work of ensuring that for-profit higher education companies are accountable to students and taxpayers alike. Senator Murphy has been a strong partner in this effort and his advocacy and action in the next Congress will help continue the work the HELP Committee has led to ensure every family has access to a quality, affordable education.”
“While some for-profit schools are doing a good job of delivering a quality education in innovative ways, too many are putting their bottom lines ahead of students’ best interests,” said Murphy. “When schools leave students with worthless degrees and saddled with debt, while getting the vast majority of their revenue from taxpayer dollars, they need to be held accountable by the federal government. The Students Before Profits Act will let students know what they’re getting from their college, and ensure that there are consequences when schools aren’t transparent about costs, accreditation, job placement, and other metrics. I’m proud to have worked on this important bill with Chairman Harkin, who has been such a champion on this issue for so many years, and I will keep fighting for students in the next Congress.”
For too long, some for-profit schools have failed America’s neediest students, despite the fact that the majority of their revenue comes from federal dollars. The for-profit college industry enrolls just 13% of all postsecondary school students, but accounts for nearly half of all student loan defaults across the country. In addition to crippling amounts of student loan debt, too many students leave a for-profit college with worthless credits and degrees, and, ultimately, dismal job prospects upon graduation – if they can afford to complete their course load. In fact, 72% of for-profit programs produce graduates who earn less, on average, than high school dropouts.
Instead of using the majority of taxpayer and tuition dollars for academia, for-profit colleges allocate about 23% of revenue to recruiting and marketing, 19% to profit, and just 17% to academic instruction. This track record sets students up for failure, not the success they deserve.
The Students Before Profits Act will help protect students from the worst for-profit colleges. By making sure that students have access to important and accurate information and data, strengthening oversight and regulation, and holding schools accountable for violations and poor performance, we can help ensure that taxpayer dollars are being well spent, and that students are receiving a quality, affordable education.
The Students Before Profits Act will:
- Establish a Risk Sharing Commission to develop recommendations detailing how schools should be held financially responsible for poor student outcomes, increasing federal accountability of financial aid;
- Authorize Enhanced Civil Penalties on institutions and their executive officers if it is determined the institution misrepresented its cost, admission requirements, completion rates, employment prospects, default rates, etc…and ensure at least half of those penalties are deposited into a Student Relief fund to bolster consumer protections for students;
- Ensure Transparency on Default Rate Manipulation by requiring any school with a default rate above 30% share their plan to lower defaults directly with current students and by requiring any school found to have engaged in default rate manipulation through forbearance abuse or by branching campuses have its rate recalculated.
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