Blumenthal: Regulate 'Misleading' Colleges

The senator outlines his bill aimed at the for-profit college industry in this press release.

U.S. Sen. Richard Blumenthal called for a crackdown on the use of deceptive and misleading pitches in higher education that lure college students into taking on thousands of dollars in student loan debt for little academic and professional advancement in return.

After receiving complaints from college students, Blumenthal introduced a bill that would prevent these abuses by requiring colleges to disclose information such as cost of attendance, student outcomes, academic offerings, and procedures for withdrawing and filing complaints. The bill is called the ACCEPT Act — the Advancing College Choice and Ethics to Protect Taxpayers Act (S.3550).  

“Deceptive and dishonest practices by colleges must be stopped,” Blumenthal said. "This bill sends a strong message that colleges cannot continue to conceal poor graduation rates, true tuition and other costs, and deficient academic offerings — putting enrollment and profit over education.
Senator Tom Harkin (D-Iowa), chairman of the Senate Committee on Health, Labor, and Pensions, joined Blumenthal in introducing the bill as an original co-sponsor.

In July, Harkin released a report on the for-profit college industry — the result of a two-year long investigation of 30 for-profit colleges and corporations. Although none of the for-profit colleges and corporations investigated by Harkin are headquartered in Connecticut, three of corporations operate colleges in Connecticut: Apollo Group, which operates University of Phoenix in Norwalk, Career Education Corporation, which operates Sanford-Brown College, and Lincoln Educational Services Company, which operates Lincoln Tech.

The Aim of the Bill

  • Ban deceptive practices, and strengthen the federal ban on misrepresentation by colleges by expanding the ban’s reach, increasing the penalty for violations, and targeting high-risk institutions and repeat offenders.
  • Require colleges with a high percentage of student borrowers and a high student default rate to provide students with a waiting period between acceptance and enrollment. The bill would also prohibit these colleges from using financial aid to coerce students to enroll during this period, and ensure that prospective students at these colleges have the time to become fully informed of their financial aid eligibility at least one week prior to enrollment.
  • Require colleges to make front-end disclosures to all prospective students regarding cost of attendance, student outcomes, academic offerings, and procedures for withdrawing and filing complaints.
  • Provide all students with disclosure sheets on the colleges they are considering. These disclosure sheets would include key data on costs and outcomes with comparative context from states and the nation.

A Constituent Reaches Out

In January, Blumenthal received a letter from Madison, Conn. resident Seth Grenier. In 2008, Grenier enrolled in a software game development program at Westwood College, a for-profit college based in Denver, Colo.

According to Seth, his online courses involved outdated technology that was not fit for the needs of employers in the field. He also felt his courses were rushed and his instructors were not helpful.

Eventually, he became frustrated with the program and — after looking into Westwood College’s reputation and finding similar complaints from other students — withdrew in 2010. Although Seth withdrew from the program before the upcoming semester, he was still charged fees for it. Now, he and his parents are saddled with $30,000 in student loan debt.

John Mainhart September 30, 2012 at 02:46 PM
Typical government answer to a problem. Set up a bureaucracy to inspect all this informatiojn instead of simplifying the process for ,entering college so these things cannot happen in the first place. Both students or parents and college administers should be held accountable. It is always easy to punish the system rather than those who actually take part in the problem because all ,colleges have expensive lawyers who find ways around the new system.
Steven DeVaux October 01, 2012 at 09:54 AM
Stop uncollateralized student loans and help America collect!
Rob Gianazza October 01, 2012 at 02:33 PM
Before I put myself in debt for any reason, I investigate the business that I will be conducting business with. Perhaps a little research on the part of the consumer would prevent this sort of mishap. Businesses require patronage to stay in business. Businesses with no patrons fail (unless the government bails them out). Too bad my tax dollars weren't consulted before they paid Mr. Blumenthal, Mr. Harkin and their combined staffs to draft and present this unnecessary piece of legislation.
Ron Jaffe October 01, 2012 at 08:39 PM
Frankly, much of the legislation discussed in the article simply requires that advertisers provide sufficient detail so that potential customers can make better informed decisions based on fact rather than advertising/marketing claim. This is a good example of an elected official responding to community input. If there are aspects of the proposal that you'd prefer to see modified, please provide that input to the office of the Senator through his office. Working collaboratively to address issues is how we'll make progress.
David Propper October 01, 2012 at 10:25 PM
Buyer Beware was a wonderful principle back in the days when people only traded in commodities that the average person had experience with. While I fully agree that people should investigate the products/services that they intend to purchase, the reality is that a sophisticated, unscrupulous seller can hide the defects in the goods/service and get away with it. It would be nice to believe that everybody behaves with ethics. It really would be.
Rob Gianazza October 01, 2012 at 11:25 PM
David, you have such a lovely way of saying the American public is too stupid to do this for themselves and needs to be protected by the government. In the mean time, the government is spending our tax dollars on frivolous legislation to make themselves out to be the heroes of the oppressed. Please show me where in the U.S. Constitution it says anything about being protected from the unscrupulous? Is that something that the Framers missed? Perhaps Hebrew National will need to revise their advertising as I believe their slogan is that they have to answer to a "higher authority". That could be considered an infringement on the First Amendment. I suppose that this legislation would mean they would need to prove that there is a God.
Rob Gianazza October 01, 2012 at 11:26 PM
When will people realize that all forms of government are based upon the idea that people can't be trusted to run their own lives, but can be trusted to operate a government that runs other people's lives?
David Propper October 02, 2012 at 07:19 AM
"Promote the general welfare?" Isn't that in the Constitution?
Steven DeVaux October 02, 2012 at 09:12 AM
Rob, Just have the banks make the parents, or anyone, sign as a co-borrowers on the students loan - and be sure they have collectable-convertible assets as collateral and this whole problem would go away. Banks do it every day with everyone else. Students who are over the age of 18 and can vote/drive etc. should be treated no different. Uncollateralized loans are the worst type of commerical lending and banks eschew them. Same should be true for students. No regulation needed and students suddenly become more responsible when it comes to their selections (spending) for education.
Howard Lasser October 02, 2012 at 09:52 AM
Rob, if I understand your position right, you believe that it up to the consumer to decide if he/she wants to do business with a company, the company has not obligation to operate in a safe or under any ethical guidelines. So, under that premise, Car companies or Pharmaceutical companies can sell products that are unsafe, a farmer can sell produce that is infected. Chemical companies can pollute the rivers and air regardless of consequences to the health of people downstream. You assume that eventually enough people will be warned off by the experience/death of others so the company / farmer will be out of business. The government has no role in insuring the safety or integrity of commerce. Is this really your position?
Ken October 02, 2012 at 01:37 PM
The most obvious fraud I hear from all of these for profit either on line or in person attendance schools is the % of students they tout as getting jobs. Claiming that 80+% of students get job offers in their field of study or secure a job in the field after graduation from their program should be a loud and clear warning sign. The old adage, if something sounds too good to be true ... A simple adjustment to their advertising could be to add a disclosure statement similar to what investment ads must make. In this case the disclosure would say "Student outcomes may not be representative of this student and will vary based on job market conditions and student performance."
Rob Gianazza October 02, 2012 at 01:56 PM
Howard, you consider yourself an intelligent person. Why do you make outlandishly foolish statements? That would be akin to me stating that your position is that the consumer has no responsibility whatsoever over the products they purchase because the government has done this for them. Wait, maybe that really is your position...
Rob Gianazza October 02, 2012 at 02:02 PM
David, so is "shall not infringe". Do you really want to go there with me? BTW, the last sentence of my comment was reminiscent of "Miracle on 34th Street".
Steven DeVaux October 07, 2012 at 11:53 AM
Regulate Misleading Senators and just let the banks collect the money that's due them by selling off the guarantors assets. No need to regulate.


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