High fraud claims against for-prof­its

Los Angeles Times - - BUSINESS BEAT - As­so­ci­ated press

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.

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