NORWALK — Sen. Chris Murphy along with several Democratic senators have introduced a bill that aims to protect students from deceptive practices of for-profit colleges.
The Students Before Profits Act of 2015 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.
Co-sponsors of the bill include Sens. Richard Blumenthal, Dick Durbin (Ill.), Elizabeth Warren (Mass.) and Sherrod Brown (Ohio).
Currently, for-profit colleges enroll 10 percent of all postsecondary students, but account for 44 percent of all student loan defaults, according to the bill's sponsors.
A Senate HELP Committee investigation found that, on average, for-profit colleges allocate about 23 percent of revenue to recruiting and marketing, 19 percent to profit, and just 17 percent to academic instruction.
"These colleges are spending more money on marketing themselves than they are on actually providing the education. Congress can't allow that to happen because these colleges are playing with taxpayer dollars," said Murphy.
"For most of these schools, 90 percent of their revenue comes from the federal government. This legislation will make these schools and their companies' directors and owners personally liable if they are caught defrauding students. It will include enhanced civil penalties against institutions and their executive officers when they lie to students about their employment prospects, their default rates, their costs, their admission requirements, or completion rates, and it will stop repeat offenders from defrauding students. The Students Before Profits Act will send a very strong message to these companies that there will be real consequences if they continue to defraud students."
Corinthian Colleges, once one of the largest chain of for-profit institutions, 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 its former students.