Two years ago, 16,000 college students had their college educations pulled out from under them when Corinthian Colleges Inc., a company that was providing for-profit higher education, closed suddenly following a $30 million fine for misrepresenting “job placement data” and altering “grades and attendance records.”
One year ago, ITT Educational Services, another company providing for-profit higher education, left 35,000 students in the lurch when it closed down its 137 ITT Technical Institutes, after the federal government said it would no longer provide federal grants to ITT students.
And just last week, California’s attorney general sued for-profit Ashford University for allegedly “engaging in unlawful marketing, sales and debt-collection.”
And yet the Trump administration and U.S. Education Secretary Betsy DeVos are seeking to roll back protections for student borrowers who have been defrauded by for-profit schools at the federal level.
That leaves it up to the state to protect our students. The Maryland General Assembly has passed laws that would provide financial relief for borrowers who have been victimized by these predatory, for-profit companies. Unfortunately, Gov. Larry Hogan refuses to implement these laws.
In 2016, the Maryland General Assembly passed legislation to strengthen oversight of for-profit institutions of higher education. This legislation also established a Guaranty Fund to reimburse students who were attending for-profit institutions that closed or where there had been proven deception and fraud. This Guaranty Fund is still unavailable for Maryland students because more than a year later, Governor Hogan has not implemented the legislation.
The 2016 bill was the second time the General Assembly had tried to assist Maryland students who attend high-cost, low-return, for-profit institutions. In 2011, the General Assembly passed legislation enabling the Maryland Higher Education Commission to establish a Guaranty Fund for students who attend a for-profit institution. A Private Career School Guaranty Fund with a similar purpose had been established in 1981. But MHEC declined to establish such a fund. So, in 2016, new legislation passed that required MHEC to establish a Guaranty Fund.
Before that law took effect in October, ITT abruptly shut down, leaving more than 700 Maryland students with student loans left to pay but no degree. Many of the loans were debilitatingly high: Earning an associate’s degree at ITT could cost up to $44,000, while a bachelor’s degree could cost as much as $88,000.
In June, MHEC issued proposed regulations to implement the Guaranty Fund. Unfortunately, as proposed, the regulations fell far short of what was needed. They shifted enormous substantive burdens from the for-profit institutions to the students. MHEC chose to propose a one-time fee, for example, which would leave the fund severely under-capitalized for students who may seek and need relief, rather than complying with the state law and assessing an annual fee on for-profit schools to support the fund.
The proposed regulations veered so far from the law that policy analysts who counsel the Administrative, Executive, and Legislative Review Committee raised concerns over legal issues. At least one legal analysis found that the regulations do “not satisfy the requirements of the statute.”
In a public briefing held before the Senate’s Education, Health and Environmental Affairs Committee, the secretary of higher education and his staff were admonished for the lack of diligence and fidelity in their proposed regulations. Subsequently, the department indicated a willingness to revisit the regulations in response to the committee’s concerns.
Incredibly, Governor Hogan has stifled this willingness to revisit the regulations and has chosen instead to side with the for-profit institutions over the best interests of Maryland students. In fact, the governor has actually doubled down on his support and commitment to the corporate colleges and has directed MHEC to implement the original business-friendly regulations that present issues of legal concern.
The governor’s actions demonstrate a wanton disregard for damage done to Maryland’s students by for profit institutions like ITT and Corinthian; they are particularly troubling because they deny relief for the predominantly low-income students, students of color and veterans who have been targeted by these predatory schools.
Why has the governor chosen to side with these corporate companies at the expense of these hard-working students, many of whom work a full–time job and take classes online? We can only speculate. We do know, however, that placing the profits of these companies over our state’s students is unconscionable and must be reversed.
Sen. Paul G. Pinsky, a Prince George’s County Democrat, is vice-chair of the state Senate’s Education, Health,and Environmental Affairs (EHE) Committee, chair of the education sub-committee and lead sponsor in the 2016 legislation to protect students. Sen. Joan Carter Conway, a Baltimore Democrat, is chair of the Senate’s EHE Committee and was a co-sponsor of the 2016 legislation to protect students.