We need strong rules for shady for-profit colleges

Westwood College, a for-profit university, attracts students with a promise of a law enforcement career upon graduation.

When potential students search online with terms such as “become a police officer in Chicago” or “state trooper college,” a link to Westwood’s criminal justice program pops up near the top of the results. Many students reasonably believe that a Westwood degree would be a foot in the door at the Chicago Police Department or the Illinois State Police.

In reality, neither agency only the Chicago Police Department would consider Westwood graduates for jobs. That’s because Westwood lacks regional accreditation, which is required by many a number of law enforcement agencies. (This blog has been corrected to reflect updated information) Students often don’t find out about the lack of accreditation until they accrue $50,000 – 70,000 in student debt. This means that many students come out worse off than they were before they enrolled in college, with a high debt load and few job prospects.  Illinois Attorney General Madigan sued Westwood in 2012 for deceiving students about their career options and downplaying the total cost of a degree.

Westwood is far from the only college in the country to encourage students to rack up debt while providing them little in return. The Department of Education found that 72 percent of for-profit college graduates made less than high school dropouts. And while for-profit college students make up just 13 percent of all students, they account for more than half of all defaults on federal student loans. Just 16 percent of African American students who started a four-year degree at for-profit colleges in 2002 graduated within six years, compared to 39 percent of African American students at public colleges and 45 percent of African American students at private nonprofit colleges. Clearly, the system isn’t working.

The Department of Education recently proposed rules to hold for-profit colleges accountable for the costs and quality of their programs. This rule would cut federal loans and aid to for-profit colleges, which can make up to 90 percent of their revenue for federal aid, if they fail to adequately prepare their students for gainful employment. Schools must pass two tests in order to qualify for federal loans and aid: the debt-to-earnings test and program cohort default rate. The debt-to-earnings test assesses whether graduates are earning enough money to repay their debt, while the program cohort default rate looks at the rate of students who default on their loans. Woodstock submitted a letter to the Department of Education urging them to strengthen the portion of rules regarding the debt-to-earnings test. As proposed, the debt-to-earnings measure doesn’t fully capture whether a student can afford his or her loans and there are loopholes that colleges can exploit in order to make their performance seem better than it is. There is a pressing need for a strong and effective gainful employment rule, and the proposed rule doesn’t go far enough to protect students from unscrupulous practices.

Both of these tests make sense as ways of measuring whether students are gainfully employed.  The Department must clarify its standards and close all loopholes before finalizing the rule. For more information, read our letter.

Correction: This blog was based on information in a press release issued by the Office of Illinois Attorney General Lisa Madigan in 2012. Since the press release was issued, the Office of the Attorney General has amended their complaint against Westwood College to clarify that the Chicago Police Department may consider graduates of schools with national accreditation. This blog has been updated to reflect that information.