High fraud claims against for-profits
Students who attended for-profit colleges filed more than 98% of the requests for student loan forgiveness alleging fraud by their schools, according to an analysis of Education Department data published Thursday.
The study by the Century Foundation represents the most thorough analysis to date of the nearly 100,000 loan forgiveness claims known as borrower defense received by the agency over the last two decades and paints an alarming picture of the state of for-profit higher education in the U.S.
The report comes as Education Secretary Betsy DeVos faces criticism for halting two Obama-era regulations that would have added protections for students. Review of tens of thousands of claims has stalled, and the department is considering abandoning the practice of full loan cancellation in favor of partial forgiveness. Student advocates point to the Trump administration’s ties to the for-profit industry and accuse DeVos of putting industry over students.
The study found “a disproportionate concentration of predatory behavior among for-profit colleges” that raises “serious concerns about the federal government’s current approach to providing relief to students who have been defrauded and misled.”
For-profit colleges expanded dramatically over the last two decades, with enrollment rising from around 230,000 in the early 1990s to a record 2 million in 2010.