WASHINGTON - U.S. Senator Chris Murphy (D-Conn.), member of the U.S. Senate Health, Education, Labor, and Pensions Committee, today vowed to push the U.S. Department of Education to expedite assistance for students of Marinello Schools of Beauty, a for-profit post-secondary school that announced its closure today. Marinello serves over 400 Connecticut students and has campuses in East Hartford, Fairfield, Hamden, Meriden, Niantic, Torrington, and Willimantic. Students who need assistance with the student loan debt are encouraged to call his office at 860-549-8463.

Murphy is the author of the Students Before Profits Act of 2015, a bill to protect students from deceptive practices and bad actors in the for-profit college sector. The bill ensures students have access to important and accurate information, strengthens oversight and regulation, and holds for-profit schools and their executives accountable for violations and poor performance. 

“Unfortunately, Marinello Schools is just the latest case of fraudulent, for-profit school systems lying to their students and hanging them out dry,” said Murphy. “While I applaud the Department of Education for suspending Marinello’s access to federal dollars in light of deceptive enrollment and financial aid disbursement practices, the school’s abrupt decision to close means that nearly 500 students enrolled at 7 campuses across Connecticut today are left holding the bag with thousands of dollars in student debt and incomplete credentials.”

Murphy continued, “The Department of Education has the ability to discharge all federal student loan debt for these students, and I will do everything I can to encourage them to expedite the process so that these borrowers can get their money – and their right to a real education – back in their own hands. I’ve been battling for-profit schools ever since I was elected to the Senate, and Congress has not yet done its part to take them on. It’s time for Congress to pass my Students Before Profits Act and crack down on these fraudulent executives.”

In November, after the Department of Education uncovered serious violations by Marinello Schools of Beauty, including enrolling students with invalid high school diplomas, underawarding federal student aid refunds to students, and charging students for excessive overtime, the school was placed on “Heightened Cash Monitoring 2,” an increased level of financial oversight by the Department. On February 1, the Department revoked the eligibility of 23 Marinello campuses to participate in federal student aid programs, leading to the school’s  announcement today that it was closing all 56 U.S. campuses – including 7 in Connecticut.

Currently, for-profit colleges enroll 10% of all postsecondary students, but account for 44% of all student loan defaults. A Senate HELP Committee investigation found that, on average, for-profit colleges allocate about 23% of revenue to recruiting and marketing, 19% to profit, and just 17% to academic instruction. Since Corinthian Colleges, the infamous for-profit institution, closed its doors earlier this year after extensive allegations of fraud, the U.S. Department of Education has forgiven $40 million in student loan debt held by former students. The Students Before Profits Act provides for new tools to recoup federal dollars from the owners and executives who reap huge profits from failed, fraudulent for-profit institutions.

The Students Before Profits Act:

  • Authorizes enhanced civil penalties on institutions and their executive officers if it is determined that the institution misrepresented its cost, admission requirements, completion rates, employment prospects or default rates, and uses those penalties to fund a Student Relief Fund to help defrauded students;
  • Improves oversight of default rate manipulation by requiring the Secretary of Education to use corrected data to recalculate student loan cohort default rates for institutions of higher education that have engaged in default manipulation and make determinations on whether an institution should be disqualified from participating in financial aid programs;
  • Makes college executives share the risk, giving the Department of Education broader discretion to require owners and executives to assume personal liability for financial losses associated with Title IV funds and including executives and owners among those against whom the Department can pursue a claim after discharging borrowers’ debts;
  • Prevents “repeat offenders” by prohibiting board members and executive officers of an institution against which the Department has brought an enforcement action from serving in leadership positions at another college.