New Report: Encouraging Innovation & Preventing Abuse in For-Profit Higher Education

This post first appeared on on December 13, 2017
By Robert Shireman, Senior Fellow at The Century Foundation and Debbie Cochrane, Contributor

Public, nonprofit, and for-profit colleges all struggle with inconsistent quality. On average fewer than three in five students graduate within six years.1 More than a million students default on their federal loans every year.2 However, these challenges are greatest among for-profit colleges, whose students are less likely to see earnings gains, more likely to have unaffordable debt, and more likely to default on their student loans.

Not coincidentally, state oversight is weakest at for-profit colleges. Public colleges and universities are run by elected or appointed officials, answer to state legislatures every year when setting their budgets, and are subject to a variety of state laws regarding how they teach their students and treat their employees. Nonprofit colleges are required to be led by trustees without a financial conflict. But many states do relatively little to oversee for-profit colleges, which enroll 2.5 million students nationally.3

State policy makers must evolve their long-standing role in higher education, and build on their historical role in consumer protection, to respond to today’s higher education landscape. State attorneys general have already begun to do so, leading some of the worst colleges to shut their doors. But better than remedying these harms after the fact would be preventing them in the first place.

State policy makers may have assumed that, because for-profit colleges receive up to 90 percent of their funds through the U.S. Department of Education and additional funds for serving military and veteran students, overseeing them is primarily a federal responsibility. But in fact, federal oversight has been demonstrated to be inadequate, and the Trump administration is in the process of rolling back the protections that do exist.

Click here to read the full article on the report.

Download the full 2018 State Policy Toolkit here.

The Century Foundation is a progressive, nonpartisan think tank that seeks to foster opportunity, reduce inequality, and promote security at home and abroad.

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