Contact: Michael Rose
Arlington, VA (March 26, 2019) — The National Association for College Admission Counseling (NACAC) announced its support for legislation introduced by Sen. Maggie Hassan (D-NH) and Sen. Richard Durbin (D-IL) that would protect students and taxpayers from unscrupulous colleges.
Throughout the history of the federal student aid programs, there has been a consistent pattern of unscrupulous colleges preying on students and taxpayers in order to maximize their profits, paying little regard to the quality of education they provide. Inconsistent regulation has perpetuated the cycle of fraud and abuse. The Department of Education took steps over the past decade to address the well-documented problems, which include high pressure recruitment tactics, misrepresentations about program quality and licensing requirements, and falsification of graduation rates, among other things. Unfortunately, the current administration has undermined these efforts since taking office. The legislation introduced this week, if signed into law as a part of a comprehensive reauthorization of the Higher Education Act, would make sure that US taxpayer dollars help educate students by tightening restrictions on waste, fraud, and abuse in the federal student aid programs.
The legislation introduced by Sens. Hassan and Durbin would, among other things:
- Replace the 90/10 rule with an 85/15 rule to require for-profit colleges to derive at least 15 percent of their revenue from non-federal funds, and close the loophole that allows Department of Defense and Department of Veterans Affairs to be counted as non-federal dollars;
- Codify the 2014 Gainful Employment regulations that require vocational programs at for-profit colleges and non-degree programs at non-profit colleges to meet minimum thresholds of debt to income rates;
- Ban the use of arbitration agreements and class action restrictions as part of enrollment agreements made between students and institutions of higher education;
- Codify and strengthen the 2016 regulations regarding the forgiveness of the federal student loan relief that borrowers are entitled to when a school violates state or federal law;
- Expand the prohibition of incentive compensation to cover any activity relating to a student’s academic career, from recruitment to graduation;
- Enhance civil penalties that the Secretary may impose on an institution and its officers found to be in violation of the law.
“This is an important piece of legislation,” said Joyce Smith, NACAC’s CEO. “For far too long, unscrupulous colleges have preyed on students and taxpayers, at a cost of billions of dollars. These funds could and should be used to help students attend a college that will improve their lives. NACAC urges Congress to include these provisions when it reauthorizes the Higher Education Act.”
The National Association for College Admission Counseling (NACAC), founded in 1937, is an organization of more than 15,000 professionals from around the world dedicated to serving students as they make choices about pursuing postsecondary education. NACAC is committed to maintaining high standards that foster ethical and social responsibility among those involved in the transition process, as outlined in the association's Code of Ethics and Professional Practices.
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