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Today I wrote a message to the Federal Department of Education as a comment on proposed rule Docket ID ED-2014-OPE-0039.

That regulation proposal concerns career schools that are eligible for providing Federally guaranteed educational loans.

[In my original posting I left out some important details. For those who do not know about this issue, Cate Nappe, (in comments) provided these details:]

The Obama administration will release new regulations ... requiring most for-profit and career — or vocational — colleges to demonstrate that they are properly preparing students for careers after graduation or face being barred from federal student aid programs.
Students at for-profit colleges represent about 13% of the total higher education population, but a disproportionate number of federal student loans — about 31% of all loans --go to such schools, which are popular with adult students and veterans trying to launch careers. Nearly half of all college loan defaults are from students enrolled in such programs, according to Department of Education statistics.
Under the new requirements, the colleges will have to demonstrate that graduates' debt load on average does not exceed 20% of their discretionary earnings or 8% of their total earnings. Institutions must also demonstrate that former students' default rate does not exceed 30%.
Source: USA Today. Thanks, Catte Nappe.

You also can comment on these scams at this link. They are the ones that you see on TV advertising for people to train in careers. They are for-profit corporations, not state sanctioned schools, have no transferable course credits and say they will provide employment once the student graduates, but have a terrible record of actually doing that.  On top of that the quality of their courses is understandably low, since they do not hire teachers or ‘professors’ with state certification or, in some cases, even any degree at all.

My statement follows.

This is my comment. Feel free to plagiarize any of this (and only this) you wish.

"Comment:
Re: Docket ID ED-2014-OPE-0039

As a published author and frequent follower of educational issues, including the disaster that is known as private, for-profit education mills, I thank you for proposing rules to prevent the milking of federal aid by for-profit career education schools that consistently fail to deliver on their promises, leaving students and the Federal Government with unmanageable debt.

It has long been common knowledge these so-called educational corporations exist solely to milk the educational loans system. They help the student apply for and get the loans, then they provide minimal education and a piece of worthless paper ‘certifying’ that the student has a proper education in whatever career they have chosen.

My own son fell victim to one of those scams, and took years to pay off the loan, spending years looking for work in the career they supposedly trained him for. Most prospective employers laughed at his ‘diploma’ because the school was only accredited by a system formed by these scam artists, and not transferable to any state college or university.

As a citizen I urge the Department of Education to put teeth into the law that requires such programs to prepare students for gainful employment.

And by teeth I mean felony criminal charges resulting in stiff prison sentences of CEO’s and Board of Directors members of offending educational corporations. Their crimes, after all, are criminal fraud and conspiracy to commit fraud.

The old saw that all is fair in business (caveat emptor, or buyer beware) is no longer acceptable to us citizens as an excuse for allowing criminal fraud to be openly practiced by businesses.

Also educational corporations which do not provide or procure the jobs promised by their sales pitch must be held accountable for any educational loans made to students who cannot find such jobs once their program is complete. Forcing a guarantee or your money back would create a disciplinary tool that would force for-profit educational facilities into actually providing the quality education promised, but so often not delivered. The government should not be held accountable for a business failing to perform; the business itself must be held accountable.

Such corporations must also be required to obtain state sanctioned accreditation for their courses, and provide transferable credits. Your regulations should make them equal to state university standards of education.

Otherwise they are simple scams, and should not be sanctioned for educational loans.”

So, there you have it in a nutshell. The comment is necessarily brief, to make the points stand out. Use if you will. The more comments on this issue, the better.
Poll

How Should For-Profit Career Schools be Punished for Student Loan Frauds?

3%2 votes
3%2 votes
43%24 votes
23%13 votes
25%14 votes

| 55 votes | Vote | Results

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Comment Preferences

  •  I spent one term as a teacher for ITT Technical (12+ / 0-)

    I can totally agree with your assessment.

    There were only a couple of my students that I would ever consider employable with or without the certificate of graduation.

    The only requirement that we as teachers had was that all students must attend class and for the complete duration of the time schedule.

    If a student missed class, it was our responsibility to call them and ask why and get them to promise to attend the next class meeting. Really? Is this First Grade? Shouldn't adults be responsible for getting themselves to class?

    It was the worst job I ever had.

    Yes, DailyKos DOES have puzzles! Visit us here Saturday nights @ 5:00 PDT (easier puzzles) and Sunday nights @ 5:00 PDT (more challenging) for a group solving. Even if you just pop in and comment while watching the fun, everybody is welcome. uid:21352

    by pucklady on Sat May 24, 2014 at 08:24:29 AM PDT

    •  I applied for a job there, but withdrew my (6+ / 0-)

      application when I realized what they wanted me to be doing.  They were not honest with me during the interview process, but I was lucky enough to find out what they were really up to.

      Federal loans should only be given for schools that maintain accreditation of the type required for universities that give transferrable credit, or some other truly comparable accreditation.  Schools who do not have decent accreditation should be restricted from making loans to students without clearly informing the students.  When I chose my undergraduate university I had never heard of North Central, etc.

      People who have loans from these places (or their accomplices) should be allowed to default if the program is not meeting minimum standards in placing graduates in their chosen careers and credits from the school are not transferrable to accredited state colleges.  The schools should eat the cost of the defaults.  

      We should let students refinance their loans with direct federal loans at a 3% interest rate.  These direct federal loans should allow medical bankruptcies.  

    •  Thank you, PuckLady, for (0+ / 0-)

      your story about teaching at ITT Technical.
      It would make a good vignette to include in a comment to the Educational Department.

  •  yep, years ago my son, w/o my knowledge (11+ / 0-)

    enrolled in one such school alleging to teach motor mechanics with an aim of a NASCAR career for graduates.  He qualified for all sorts of assistance and the course was supposed to take 1 year.

    Unfortunately, he was going through a difficult time in his life and only went for a few weeks before dropping out.  However the school not only kept him on the rolls for two years but also sought financial aid and allowed him to remain enrolled as a student though he was not attending any classes.  He was a "ghost" student who drew the financial aid but never did the course work.

    During this time, they contacted me and requested that I co-sign for more loans as he had not hit the cap yet but for him to be enrolled meant he had to have a co-signer.  I think the loan was 8%, from memory.  I refused.

    Long story short is that my son defaulted on the loans and collection agents still contact me about payment.  One recently asked me if I wanted to pay off the loans to "clear" my son's credit.

    The whole thing is a scam; my son-in-law's brother started to sign up for one that would cost him $9K a year for unaccredited courses when he could get the same year long program for $325/credit hour at the local tech  

    •  EntLord, This also would be (0+ / 0-)

      a good vignette to include in a comment to these folks who are regulating this industry.
      My guess is that if they do their job right, and regulate it so the for-profit schools actually are required to perform quality, credit-worthy education in order to student loans, that they will simply fold up their tents and migrate to another scam.

  •  What would be the effect of the proposed (2+ / 0-)
    Recommended by:
    FG, macguru

    regulations to which the diary's comment responds?

    In other words, what exactly is this diary about?

    •  Yeah (4+ / 0-)
      Recommended by:
      Timaeus, JeffW, macguru, Mr Robert

      I know a little of the background, but not all readers will. Diarist should have given quite a bit more to go on.

      The Obama administration will release new regulations ... requiring most for-profit and career — or vocational — colleges to demonstrate that they are properly preparing students for careers after graduation or face being barred from federal student aid programs.

      Students at for-profit colleges represent about 13% of the total higher education population, but a disproportionate number of federal student loans — about 31% of all loans --go to such schools, which are popular with adult students and veterans trying to launch careers. Nearly half of all college loan defaults are from students enrolled in such programs, according to Department of Education statistics.

      Under the new requirements, the colleges will have to demonstrate that graduates' debt load on average does not exceed 20% of their discretionary earnings or 8% of their total earnings. Institutions must also demonstrate that former students' default rate does not exceed 30%.
      http://www.usatoday.com/...

      “Texas is a so-called red state, but you’ve got 10 million Democrats here in Texas. And …, there are a whole lot of people here in Texas who need us, and who need us to fight for them.” President Obama

      by Catte Nappe on Sat May 24, 2014 at 08:58:32 AM PDT

      [ Parent ]

      •  So it sounds like these regulations would be (1+ / 0-)
        Recommended by:
        macguru

        a GOOD thing.  From the diary, I thought the diarist was opposed to them.

        •  Yes, they would be a good thing (6+ / 0-)

          Beats having to sue them

          Under a pending $40 million settlement in state court, Career Education Corp., Le Cordon Bleu’s parent company, has agreed to offer rebates of up to $20,000 to approximately 8,500 students who attended the academy between 2003 and 2008.

          In a class-action lawsuit, former students of the cooking school accused it of misleading them about the value of a culinary education and their job prospects after graduation. The students alleged the for-profit school defrauded them with promises of high-paying jobs and encouraged them to take on crushing debt from student loans for expensive programs but provided them with no more chance of finding a high-paying culinary job than someone who didn’t go to culinary school at all.

          http://www.schoolscamlawyer.com/...

          “Texas is a so-called red state, but you’ve got 10 million Democrats here in Texas. And …, there are a whole lot of people here in Texas who need us, and who need us to fight for them.” President Obama

          by Catte Nappe on Sat May 24, 2014 at 09:26:29 AM PDT

          [ Parent ]

      •  I used your quotes (2+ / 0-)
        Recommended by:
        Catte Nappe, wilderness voice

        Hope you don’t mind. It never occurs to us who know what people do not know. So, I used your block quotes in the first lead-in of the article, with attribution, of course. Thanks.

        •  Thanks, but (1+ / 0-)
          Recommended by:
          macguru

          You really need to include my source link from USA Today - it's their copyright, not mine ;)

          “Texas is a so-called red state, but you’ve got 10 million Democrats here in Texas. And …, there are a whole lot of people here in Texas who need us, and who need us to fight for them.” President Obama

          by Catte Nappe on Sat May 24, 2014 at 09:21:44 AM PDT

          [ Parent ]

  •  shut them down- 13% is too much although it's (7+ / 0-)

    lower than I expected since they've been doing this for decades, another symptom of privatization's abuses in terms of the for-profit sector - in fact the only ones that should exist are ones that serve a genuine apprenticeship function like minor league baseball teams or the NBA D-league

    Warning - some snark may be above‽ (-9.50; -7.03)‽ eState4Column5©2013 "If we appear to seek the unattainable, then let it be known that we do so to avoid the unimaginable." (@eState4Column5)

    by annieli on Sat May 24, 2014 at 09:42:54 AM PDT

    •  Beware of the "crappy" schools... (8+ / 0-)

      I know a person who obtained a Master's degree from the University of Phoenix. She was so proud of herself for graduating from there and was in the process of encouraging her daughter to apply. The rest of us in the room at that time were appalled -- we couldn't believe she fell for that "low level" of further education. She later showed me her "final" paper -- it was only 3 pages and did not include a bibliography, citations, title page, etc. It was so pathetic, yet she was so proud. Sigh...we deserve better yet these creepy, loser schools prey on our fellow Americans.

      "Vy are der so many more horse's asses than der is horses?"

      by PrefersaPension on Sat May 24, 2014 at 10:12:57 AM PDT

      [ Parent ]

      •  Good grief. I was doing better stuff in 5th (2+ / 0-)
        Recommended by:
        macguru, allie4fairness

        grade--of course, that was Montgomery County, Maryland in the 1950s.

      •  I have allowed students taking on-line courses (1+ / 0-)
        Recommended by:
        macguru

        from these dumps to sit in on my lectures unofficially.  Once students forked over the money they were given very little support and had to wade through the material on their own.  

        Some of these places send out little kits so students can do science experiments on their own at home.  These kits are reputed to be rather hard to complete.  Students watch videos of other experiments and answer questions about the video.

        I would prefer that my nurse or brain surgeon not learn their trades just by watching videos and doing a few unsupervised experiments at home.

  •  And just which of our ethical & upstanding members (1+ / 0-)
    Recommended by:
    macguru

    ...of the US Congress is catering politically to these scam institutions?

    •  DollParty (2+ / 0-)
      Recommended by:
      allie4fairness, leoluminary

      I;m not sure which politicians supported these corporations. But it has been going on for decades.
      I think the breaking point was when Obama’s administration took the loans back from the banks, and made them Federal loans. That broke the banker’s monopoly on loans, and caused more attention to be paid to who was actually getting all of the loan money.
      And, wallah! Out popped these for-profit corporations that were around 13% of the educational system, but caused over 30% of the loan defaults.
      So now attention is being paid, and the scam artists are not happy about it.

  •  proprietary schools (3+ / 0-)
    Recommended by:
    allie4fairness, leoluminary, macguru

    for the most part are good at one thing:  marketing.  They suck unsophisticated "consumers" in and then deliver a deficient "product."  Students sign financial aid papers that have been packaged for them, without realizing they are signing up for thousands of dollars in loans.  They are saddled with this debt forever, and if they seek further education at a decent community college or public university later will likely be denied further aid.  It is a disgrace.

    Barring these institutions from federal financial aid would cut the loan default rate in half.

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