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Student Protections

At the core of NACAC's mission is an adherence to strong professional and ethical values in the college counseling, recruitment, and admission professions. NACAC is concerned by the waste, fraud, and abuse that is commonly practiced by some unscrupulous institutions of higher education, frequently (though not exclusively) those in the for-profit sector. Students are not the only ones put at risk by these practices; taxpayer funds finance these institutions that fail to produce a meaningful return on the public's investment.

Students enrolled at for-profit institutions account for just over 10 percent of all postsecondary enrollments, but over 40 percent of student loan defaults. Drop-out rates for these institutions are high, contributing to the burden of loan repayment without a postsecondary credential. Those who drop out or attempt to transfer to a non-proprietary institution frequently find that the credits they earned at the for-profit institution are not recognized by their new institution, forcing them to start from the beginning with less federal aid available. Even students who do successfully complete their course of study often discover that they are ineligible to sit for state licensure exams, or are otherwise under-qualified for employment.

Every year, the Department of Education distributes over $150 billion of student aid in the form of work-study funding, grants, and loans. These funds are authorized in Title IV of the Higher Education (HEA). In order to be eligible to receive these funds, institutions of higher education have to abide by certain quality-control, consumer-protection agreements. Three of the most substantive regulations are:

Incentive Compensation: The use of agents rewarded based solely on the basis of the number of students enrolled is prohibited. The ban on incentive compensation is to ensure that students are not recruited without regard to their likelihood of success.

Gainful Employment Regulations: Gainful employment regulations require career or vocational programs (chiefly those at for-profit and community colleges) to demonstrate certain levels of success in graduating employable students. In August 2018, the Department of Education proposed that this regulation be rescinded; a final rule is forthcoming.

90/10 Rule: For-profit institutions are required to derive at least 10% of their revenue from non-Title IV funds. This is to ensure that the programs offered have some level of free-market viability: i.e., that students or other parties see enough value in the degrees that they are willing to contribute private funds.

Unfortunately for students and taxpayers, unscrupulous institutions continue to exploit loopholes in these regulations. For example, federal funding in the form of veterans' benefits count as part of a for-profit institution's 10% of non-Title IV funds, although they are still taxpayer dollars. This has led to some institutions engaging in highly unethical recruitment of veterans, including those who are recovering from injuries they have sustained and and are unable to make informed decisions. Aggressive recruitment and deceptive marketing are widely documented; students are placed under intense pressure to sign enrollment documents without having adequate information or time to weigh their options.

NACAC believes that the ability to make informed decisions about postsecondary education is essential. We support strong government oversight and meaningful regulation of institutions receiving federal financial aid dollars to guarantee that institutions to not take advantage of students, particularly those who are first-generation, low-income, English Language Learners, or other underserved populations. In addition to oversight on the backend, disclosure of information to students on the frontend is also vital. Access to graduation rates, debt load and default rates, employment outcomes, and other measures of a program's efficacy help students judge the value of a program. NACAC also advocates increased access to qualified school counselors, who are able to assist students interpret consumer protection data.

NACAC supports the following policies to enhance student protections:
• Preservation and enforcement of gainful employment regulations
• Ban on incentive compensation for recruiters
• Standardized, visible, and frequent disclosures of institutional cost and student outcomes (including graduation, default, and employment rates)

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