Durbin Warns Prospective Students About Deceptive For-Profit Colleges

[CHICAGO] – As a new school year begins, U.S. Senator Dick Durbin (D-IL) today warned prospective students about the perils of for-profit colleges and called on the U.S. Department of Education to use its full authority to end abusive practices and improve student outcomes. While for-profit colleges enroll only about 10% of all college students, they take in 20% of the Department of Education’s federal student aid funds and account for a disproportionate 44% of student loan defaults.

“The collapse of Corinthian Colleges, Inc. was a wake-up call for the Department of Education and should result in earlier and more aggressive oversight of for-profit colleges,” Durbin said.  “The Department of Education cannot simply wait until the next failure to act.  I’m calling on the Department to use their full authority to ensure current and prospective students don’t wind up in the same situation as those who were left with nothing but a mountain of debt.  We know Corinthian was not unique in the industry.  Other major for-profit education companies like Career Education Corporation, Education Management Corporation and ITT Tech are facing a litany of investigations and lawsuits similar to what led to Corinthian’s demise and all of these companies are on the Department of Education’s Heightened Cash Monitoring list.”

An Associate’s Degree at one of Chicago’s City College costs around $7,000, other students are spending about five times as much for a comparable degree at a for-profit institution. For example, an Associate’s Degree at ITT Tech’s campuses cost $47,000 and their students have about a 1 in 5 chance of defaulting.

While the final 28 Corinthian Colleges campuses across the nation closed earlier this year, many colleges remain open using the same deceptive practices. The following for-profit companies that currently operate campuses or programs in Illinois are facing active investigations or lawsuits by the Illinois Attorney General and/or federal agencies:

  • Career Education Corporation – operates International Academy of Design and Technology, American Intercontinental University, Harrington College of Design, Le Cordon Bleu, Sanford Brown
  • Education Management Corporation – operates The Illinois Institutes of Art, Argosy University, Brown Mackie
  • DeVry, Inc.
  • ITT Educational Services, Inc. – operates ITT Technical Institutes
  • Kaplan – operates Kaplan University Online
  • Alta Colleges, Inc. – operates Westwood College

The for-profit college industry receives more than $25 billion in federal dollars which is enough funding to make it the ninth largest federal agency.  At the time of closure of Corinthian Colleges last remaining campuses earlier this year, they were still participating in the federal Title IV program – receiving taxpayer dollars and in several states, continuing to enroll new students. Corinthian was under investigation by the Securities and Exchange Commission, the Department of Justice, and at least 20 state Attorneys General, including Illinois Attorney General Lisa Madigan. All the while, the institution raked in more than a billion dollars from taxpayers a year.