California Aims for Crackdown on For-Profit Colleges

Education

California Aims for Crackdown on For-Profit Colleges

Education Secretary Betsy DeVos has rolled back Obama-era regulations that attempted to force for-profit universities to prove they were providing a worthwhile education. Now California is looking to step in with new regulations of its own.

Bridgepoint Education, the parent company of Ashford University / Photo by Sam Hodgson

This post initially appeared in the April 4 Learning Curve. Get The Learning Curve delivered to your inbox.

Salespeople made a thousand cold calls a week. Every time they got a new client, a cowbell rang or plastic hands clapped. It was a “boiler-room atmosphere” straight out of the movie “The Wolf of Wall Street,” said one worker.

Only these weren’t really salespeople, they were admissions counselors at Ashford University in San Diego, according to a lawsuit filed by California’s attorney general in 2017.

One supervisor even kept the key cards of terminated employees on a ring and dangled it in front of admissions counselors to let them know the price of not hitting their sales targets, according to the suit.

Ashford serves a significant portion of veterans and receives millions of dollars in federal student aid money and GI Bill benefits.

Education Secretary Betsy DeVos has rolled back Obama-era regulations that attempted to force for-profit universities to prove they were providing a worthwhile education. Now California is looking to step in with new regulations of its own.

A flurry of bills working their way through the Legislature would seek to do several things: reintroduce gainful employment rules, like those previously issued under Obama, that would measure student debt against the salaries of graduates; require the attorney general to approve the sale of any non-profit college to a for-profit college; attempt to close loopholes that allow for recruiting quotas; and give students more rights to compensation in the event an institution closes.

Federal law requires for-profits to have at least 10 percent of their student body pay for their education privately. This is supposed to ensure their tuitions are competitively priced and not just set to take advantage of government aid rates. But a loophole allows for-profits to not count GI Bill benefits in the pool of government money or private money, which makes hitting the 10 percent target much easier. Another new bill would close that loophole and raise the threshold to 15 percent in California.

The bills are set to come before the Assembly’s Higher Education Committee on April 9.

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