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For-profit colleges on notice

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For-profit colleges sometimes use overblown — or flat-out false — promises to attract new students and their money. The FTC is ramping up its efforts to stop shady practices on campus. The Commission is sending a Notice of Penalty Offenses to the largest 70 for-profits, warning them that the FTC will not stand for unfair or deceptive practices.

Why the heads-up? Under federal law, the FTC may put companies on notice that some practices have been found to be unfair or deceptive in administrative cases with final cease and desist orders, other than consent orders. If a company knows about (the law says has “actual knowledge” about) the orders and uses those same deceptive marketing tactics, the FTC can sue the company in federal court for civil penalties. The Notice outlines those prohibited practices: claims about the career or earning prospects of their graduates, the percentage of graduates that get jobs in their chosen field, whether the school can help a graduate get a job, and more. These are just the kinds of information a student would want to know before committing to a program — and it’s exactly how some for-profit schools market their programs.

The FTC has been going after false and misleading claims in education for nearly a century, but fraud in this sector persists. Most recently, the University of Phoenix agreed to a $191 million judgment to settle the FTC’s charges that, to attract students, it used deceptive ads that falsely touted its relationships with and job opportunities at companies such as AT&T, Yahoo!, Microsoft, Twitter, and The American Red Cross. In another matter, DeVry University paid $100 million to settle the FTC’s charges that the for-profit misrepresented the employment and salary prospects of its graduates. Additionally, the Commission has published a guide for vocational schools describing practices that the agency determined are deceptive.

Servicemembers and student veterans are often the targets of schools’ deceptive marketing. For-profit schools have had a strong incentive to enroll veterans because of the education benefits servicemembers can use to pay for college. This has led to aggressive targeting of servicemembers, veterans, and their families. For example, the FTC’s case against Career Education Corporation (“CEC”) charged it with recruiting prospective students using marketers who falsely claimed to be affiliated with the U.S. military, tricking students who were looking to serve their country.

There are tools to help veterans, servicemembers, and all kinds of students navigate the education marketplace and blow the whistle on bad actors. If you have a federal student loan and feel like a school misled you or broke the law, apply for loan forgiveness through the Department of Education’s (ED’s) Borrower Defense to Repayment procedures. If you’re getting started (or re-started), ED’s Opportunity Centers are designed to help prospective students (including people of modest means, first-generation college students, and veterans) apply for admission to college and arrange for financial aid and loans. Find one near you.

Servicemembers: talk with your Personal Financial Manager to get hands-on help with your next steps. And vets can call the VA’s GI Bill Hotline to discuss questions about education benefits: 1-888-GIBILL (1-888-442-4551), or visit the VA site to learn more. Before enrolling, you can find out important information about any school — including whether it’s a for-profit school — at the U.S. Department of Education’s sites, College Scorecard or College Navigator. The FTC’s Military Consumer site also has helpful advice on finding and paying for school.

Comments

You ought to go after the regular schools they charge way to much for what they put out they are all guilty of it the 4 year degree for a social worker is 100k and you make 30k really???

I couldn't agree more! Pay $60K for an art degree at a 4-year prestigious university or pay $60K for a specialized degree you can actually make $$ at AND repay your loans.

you should also check into AIU I was way overcharged for my degree and now I am stuck with 46000 plus interest to pay back even after they got money from Chapter 31 VA.

Connecticut school of broadcasting should be added to this list! Guarantees you will have skills needed for radio/rv work but after completely the short course and pay an extreme amount of money you will basically get laughed at going into any radio/tv jobs.

I see that the FTC went after Phoenix and DeVry to name two. I do not see mention of any Ivy League colleges that charge very high tuitions. Many students at these colleges take out student loans to afford the tuition and in too many cases cannot repay. This has led to Congress calling for the taxpayer to pick up the tab for these loans. Why are these colleges not being investigated for their practices to attract students?

Almost the entire Education System in the U.S. is a total scam to get students in debt, get their money and destroy their lives!

Who gets the money from these fines? What is it used for?

The University of Phoenix agreed to a $191 million judgement to settle the FTC's charges.  The University cancelled $141 million in debts that students owed directly to the school, and paid $50 million in cash to the FTC. The FTC used the money to send payments to more than 147,000 University of Phoenix students.

DeVry University paid $100 million to settle the FTC's charges. The University paid $50.6 million in debt relief and $49.4 million in cash that the FTC distributed to eligible DeVry students

The FTC has public information about other recent cases that resulted in refunds. 

Where is Kaplan University? Why aren't they on this list?

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