NCLC released a report today, “State Inaction: Gaps in State Oversight of For-Profit Higher Education.” The report examines state oversight of for-profit schools, focusing on state regulatory structures and the levels of resources devoted to enforcement and oversight.
The Bad News
1. Common problems with for-profit higher education includes:
- Inflated or misleading job placement rates
- Manipulation of student grades and attendance records and
- Illegal recruitment practices
2. In overseeing for-profit schools, many states:
- Lack appropriate staffing levels
- Have diluted and/or disparate resources
- Have conflicts of interest (e.g. members of the for-profit school industry comprise the majority of the supervisory board)
- Lack adequate funds that are dedicated to oversight and enforcement and
- Fail to provide easily accessible public information about schools (e.g. process to register complaints).
The Good News
- Some states are doing a better job of oversight and enforcement, even with limited resources.
- Many states have relief funds for defrauded students collected from for-profit schools who operate in the state.
- Most states have substantive legal recourse against fraud and abuse by for-profit schools if they choose to employ it.
- Every state and the District of Columbia has an unfair, deceptive, acts and practices (UDAP) law
- Many states have additional consumer protection laws with separate provisions targeted at for-profit schools, including laws regarding disclosure, refund policies and prohibitions of specific practices.
- Federal law requires states to help regulate for-profit schools that participate in the federal aid program.
We hope this will be a wake-up call to the states. State regulators and policymakers need to take their oversight role seriously and do more to protect their citizens.
