But despite the widespread investigations, few AGs have taken action. Attorneys general Lisa Madigan of Illinois and Jack Conway of Kentucky have filed lawsuits against for-profits, but few others have joined as the group struggles to find “common targets,” Conway said in a recent Senate hearing:
“This effort is distinct from the tobacco and mortgage settlements,” in which attorneys general united against the nation’s largest cigarette manufacturers and banks, he said. “Here we have such a diffuse group of schools, with some operating only in certain states.
“We’re sharing information,” he continued. “But we’re having some difficulty finding common targets.”
Conway has sued three for-profit colleges in Kentucky, alleging that the schools misled students and the federal government about financial aid and inflated job-placement numbers. In February, Madigan filed suit against Westwood College, alleging that it misled students about its accreditation.
The working group may now have a common target that could lead to further suits, Conway said in the Senate hearing. The group is now working with the Consumer Financial Protection Bureau to investigate the for-profits’ institutional student loan processes, in which the schools issue loans they don’t expect to be repaid in order to game federal laws governing financial aid practices.