Fraudulent for-profit colleges may be stealing financial aid from larger institutions. Last month, 24 U.S. senators, including Oregon’s Jeff Merkley and Ron Wyden, signed a letter urging the U.S. Department of Education to evaluate national accrediting agencies’ practices to check that colleges are meeting the academic standards outlined in the Higher Education Act.
Accreditation gives a college access to the $150 billion in federal financial aid offered each year in the form of Pell Grants and loans. Fraudulent schools may be reaping the funding that could otherwise be going to institutions that strictly adhere to the standards outlined by the Higher Education Act – a minimum 90 percent graduation rate and at least 50 percent employment rate post-graduation.
In 2009 alone, students at for-profit colleges collected more than $24 billion in loans and grants. So if even a small portion of these schools are not living up to performance standards, or are committing fraud, a large amount of money is being misappropriated.
“With the ballooning cost of college bogging down students with more and more debt, it’s crucial students and families invest their higher education dollars with the confidence that they’re getting a good return,” Senator Wyden said in an email. “I have been working with my colleagues to bring down rising college costs, and to make sure students get all the facts before they choose a school.”
The concerned senators point to the recent collapse of one of the nation’s largest for-profit institutions, Corinthian Colleges, which was based out of Santa Ana, California, for 20 years before going defunct in 2015. Corinthian offered programs that certified students in specific fields like medicine, business and criminal justice. It oversaw over 100 campuses throughout the U.S. and Canada.
Corinthian doctored statistics to cover up poor academic standards and falsely marketed the quality of its courses and job placement rates to applicants. This led to bankruptcy in April 2015, leaving thousands of students with debts to an institution that no longer existed, and in some cases, without a degree to show for it. Those who did finish their education were left with a degree from a blacklisted college.
Corinthian isn’t the only for-profit school doing this. A 2011 Government Accountability Office report found at least four of the 15 for-profit schools they surveyed were also fraudulent or falsely marketing. Some school officials were even encouraging applicants to lie on their FAFSA filings in ways that would draw in more funding.
Ron Bramhall, assistant vice provost for Academic Affairs at University of Oregon, said it’s very hard for an institution to lose its accredited status.
“If a university isn’t meeting the outlined standards, or if they fail to report all that their regional accreditor requires of them, they don’t just lose their accreditation,” Bramhall said. “[The Department of Education] works more as an advisory body that way, making suggestions and recommendations. You’d have to ignore them for a long time to totally lose accreditation.”
Though the senators’ latest letter shows that some are unhappy with this lax relationship, it may not matter so much to non-profit, public universities like UO, which is accredited by the Northwest Commission on Colleges and Universities. The letter mostly targets for-profit institutions with a history of playing the system.
Senators are calling on the Department of Education to force national accreditors to tighten their standards and evaluate for-profit schools more rigorously. The DOE responded to this criticism by writing a “Dear Colleague” letter to national accreditors telling them to look into these problems, but it made no clear recommendations.