PD Editorial: Keep rules to hold for-profit colleges accountable

In its haste to roll back “job-killing regulations,” the Trump administration has undermined efforts to prevent unscrupulous for-profit colleges from taking advantage of students. Whether those students are fresh out of high school or veterans hoping to expand their employment prospects, they deserve better.

Education Secretary Betsy DeVos recently announced plans to delay and rewrite two rules that the Obama administration drafted to address concerns about schools that churn out worthless degrees. For decades, consumer advocates have pushed for a crackdown on underperforming or fraudulent institutions that saddle students with massive debt and siphon money from taxpayer-funded financial aid programs.

The first rule, in place since 2015, cuts off aid to for-profit colleges that fail to demonstrate that their graduates find gainful employment. Enforcement was still in the early stages, but it’s clear the extra scrutiny was working - colleges had voluntarily shut down 300 vocational programs that weren’t meeting the new requirements.

The second rule, which had been scheduled to take effect this month, established a process for canceling debt from programs caught engaging in deceptive practices. The rule was prompted in part by the abrupt closure of two prominent chains, ITT Technical Institute and Corinthian Colleges. The closures left tens of thousands of students on the hook for more than $650 million in loans.

Californians are all too familiar with Santa Ana-based Corinthian, the subject of a $1.1 billion settlement won last year by then-Attorney General Kamala Harris. Among other things, the chain inflated its job placement numbers and used military seals in advertisements without authorization.

“For years, Corinthian profited off the backs of poor people - now they have to pay,” Harris said when she announced the court settlement. “This judgment sends a clear message: There is a cost to this kind of predatory conduct.”

Veterans and their families have been particularly hard hit by fraudulent or underperforming programs. For-profits can draw up to 90 percent of their revenue from federal aid, but military education benefits are exempt from the limits.

More than 30 veterans’ groups, including the National Military Family Association, have urged the Trump administration to leave the new regulations in place. At a recent hearing, American Legion executive John Kamin said the Department of Education needs to continue looking out for veterans because they are “often singled out and targeted with deceptive, fraudulent and predatory college recruiting practices.”

Attorneys general from 19 states, including California’s Xavier Becerra, have filed suit against DeVos over the rules. As Becerra points out, the Trump administration doesn’t have much credibility in reevaluating the rules. The president recently settled fraud claims against Trump University, itself a for-profit college, for $25 million. Meanwhile, one of DeVos’ top advisers is a former executive of Bridgepoint Education, another for-profit chain.

The rules aren’t perfect and could use some tweaking. Community colleges, for example, fall under the gainful employment rule for their nondegree vocational programs, and they contend the regulatory paperwork is excessive and drives up tuition costs. But those concerns, as well as others, should be addressed through the rule-making process, not by rolling back existing regulations and starting over.