On June 13, 2016 the Department of Education released a report proposing new regulations on for-profit and nonprofit higher education institutions. The proposed regulations cover many areas, including strengthening student protections and the possibility of debt forgiveness for students of colleges who lie in their marketing materials. For-Profit and nonprofit colleges and education special interest groups are currently lobbying against the proposed regulations. I encourage students and parents to read the proposed regulations and make your voice heard to the Department of Education.
This link will take you to an Inside Higher Education summary story on the proposed regulations:
Funny, until today, I’d never heard of Corinthian. But when I was doing a puzzle (Seven Little Words) online earlier today, one of the answers was Corinthian.
This sounds like a scam. People get to default for a whole list of items (that will be highly lawyered), of course. So you get student loans for 250K, find one of these many ways to show you’re wronged, and the taxpayers get left holding the bag? Or are the schools supposed to reimburse people, though they aren’t holding the loans? It sounds like you just won the lottery, get to default.
Entire schools can be targeted, with all student loans discharged? Sounds like no private institutions will be willing to make student loans, because they certainly aren’t responsible for what infraction a school commits. Dang, we screwed up. Instead of making our kid take out student loans, we paid the 250K for his education. This was one of the schools accused of being incorrect on their SAT entry score claims. Why did we pay that? We could have gotten it for free!
Lawyers win, people who don’t want to pay the bills they racked up win, taxpayers lose, and people who didn’t borrow lose. Interesting system, if I read it right.
Looks like the taxpayer then recovers the money from the “shady used-car dealer” in this analogy. Of course, that assumes that the “shady used-car dealer” has the money, unlike colleges that have gone out of business.
The lawyers are salivating over this one, that’s for sure. On both sides of the issue, there’s a lot of money to be made. Colleges that survive targeting get to spend their money on lawyers and payback, sounds like either financial aid goes down the tubes or tuition goes up. One administrative assistant makes an error and submits incorrect statistics, costs the college millions of dollar. The college goes down the tubes, and the taxpayers are on the hook.
My college advertised the middle 50% SAT math scores of accepted students were at 710, but it was actually 708. Oh no, I’ve been harmed, messed up for my entire life, I’ll never get a job! I need all that tuition money back, it was too scandalous to happen. And now we have a class action suit for everyone who ever borrowed to go to that school (apparently those who didn’t borrow or already paid off their loans weren’t harmed).
How about if people feel they were misled and ripped off by a school, sue that school. If statistics are off, they pay a fine and publicly acknowledge it. Why make this wide open to all sorts of abuses, scams, and billions of dollars of defaults? What’s the agenda here?
I don’t think this is meant for schools that might have slightly inflated their stats, but more for places like Trump U that are being sued by former students for making grossly false statements about what they would get for their money.
Maybe it’s just rattling sabers at U of Phoenix and others to get their act together.