Elizabeth Warren: Government Went Too Easy On Predatory For-Profit College Company


The government is going too easy on a controversial for-profit college company that’s been accused of misrepresenting its educational benefits, giving inaccurate information about accreditation, using dodgy recruitment practices, and misrepresenting graduates’ job placement rates, according to three U.S. senators.

This week, Sens. Elizabeth Warren (D-MA), Dick Durbin (D-IL), and Richard Blumenthal (D-CT) sent a letter to the U.S. Department of Education and U.S. Department of Justice, expressing concern over a recent settlement with the Education Management Corporation (EDMC) that they say resulted in a lost opportunity for frustrated students.

EDMC — which owns the Art institutes, Argosy University, South University, and Brown Mackie College — made a $102 million settlement with several attorneys general and a $95.5 million settlement with the U.S. Department of Justice last month. Although the $102 settlement with EDMC, announced by several attorneys general last month, does provide student debt relief to some students, there are certain parameters for which students qualify and the average amount of student loans forgiven for each student is $1,370. In addition, the $95 million settlement with EDMC allows the company to pay the settlement amount through 2022.

But the most alarming element of this news is that the company is not forced to admit to wrongdoing, which makes it much more difficult for students to receive student debt forgiveness. For students to be granted student debt forgiveness, they must prove that the college defrauded them. The secretary of education, Arne Duncan, said that although the department was open to considering that EDMC students were defrauded, the department does not currently have evidence of that. Duncan said the department only has evidence EDMC misled the government, an assertion that former students of EDMC colleges vehemently disagree with.


“We are profoundly dissatisfied with a settlement in which the government recovered a miniscule fraction of stolen taxpayer funds, held no individuals accountable while failing to even obtain an admission of wrongdoing from EDMC, and now may not even provide relief to thousands of students who owe billions of dollars in student loans because they were illegally recruited by EDMC,” the senators wrote.

On the other side of the aisle, there are plenty of U.S. senators and representatives who support for-profit colleges. Sen. Lamar Alexander (R-TN) and Sen. John McCain (R-AZ) expressed concern over the existence of a task force for oversight of for-profit colleges last month and asserted that the mission of the task force is to “unfairly target the University of Phoenix and other fully-accredited for-profit educational institutions.” In a letter to Duncan, the senators, including Sen. Ron Johnson (R-WI), Sen. Johnny Isakson (R-GA), and Sen. Jeff Flake (R-AZ) accused the task force of having a “political agenda.”

The Republican field of presidential candidates has largely been supportive of for-profit colleges. Sen, Marco Rubio (R-FL) is the most notable, since he wrote a letter to the department of education asking for leniency in its scrutiny of Corinthian Colleges, which shut down its campuses earlier this year, and also received money from the for-profit college chain. In June of 2014, former Florida Gov. Jeb Bush was the keynote speaker at a Las Vegas annual convention of the trade association for for-profit colleges and Donald Trump once had his own for-profit college, Trump University.

In addition to support from Republican senators and several presidential candidates, for-profit college company EDMC may benefit from a provision tucked in the highway funding bill that would amend the Trust Indenture Act, according to The Huffington Post. The provision could help EDMC avoid bankruptcy and continue to receive federal student aid.

Despite the political support and recent settlements, however, students are fighting back. Former for-profit college students are participating in protests, such as the Million Student March, getting involved in the Debt Collective, an offshoot of Occupy Wall Street that helped foster a government response on student loan forgiveness, and warning prospective students not to enroll in for-profit colleges.