MURPHY DEMANDS ACTION TO PROTECT STUDENTS & TAXPAYERS, HOLD FOR-PROFIT COLLEGES ACCOUNTABLE

Murphy: “10% of students are going to for-profit schools, but 25% of all federal aid is going to for-profit schools and 30% of all defaults are happening at for-profit schools.”

Click here to view video of Murphy’s remarks.

WASHINGTON — During a U.S. Senate Health, Education, Labor, and Pensions Committee on Tuesday, U.S. Senator Chris Murphy (D-Conn.), a member of the committee and lead author of the Students Before Profits Act, raised concerns about for-profit colleges that receive taxpayer-funded student aid dollars and hand out degrees that aren’t worth the money students put into them. For-profit colleges enroll 10% of all postsecondary students, but account for 35% of all student loan defaults. Murphy called for action to hold for-profit colleges and executives accountable, and to protect students and taxpayers. 

“We are wasting billions of dollars on educations that never get completed. We are wasting billions of dollars on schools that aren’t delivering outcomes. And as we’ve discussed here, there are some pretty simple ways to, maybe not get this perfectly right, but get it a lot better than we have today,” said Murphy. “The development of for-profit colleges – which has happened since the passage of the last higher education reauthorization – has made accountability more important. When you insert into higher education a motivation to deliver return for shareholders, then all of a sudden you see the results we have today, where 10% of students are going to for-profit schools, but 25% of all federal aid is going to for-profit schools and 30% of all defaults are happening at for-profit schools. It begs us to be more concerned about this accountability question.” 

Murphy’s Students Before Profits Act would protect students from deceptive practices and bad actors in the for-profit college sector. The bill provides for new tools to recoup federal dollars from the owners and executives who reap huge profits from failed, fraudulent for-profit institutions.

Highlights from Murphy’s remarks are below:

Thank you very much, Mr. Chairman.

This has been a fascinating and fantastic – I think this is the most important – discussion in the context of higher education reauthorization, getting the accountability metrics right. Because as has been stated, we are wasting billions of dollars.

We are wasting billions of dollars on educations that never get completed. We are wasting billions of dollars on schools that aren’t delivering outcomes. And as we’ve discussed here, there are some pretty simple ways to, maybe not get this perfectly right, but get it a lot better than we have today. I think the reason why you hear a lot of focus on this question of for-profit colleges is not because we want them to be held to a different accountability system, but because the development of for-profit colleges – which has happened since the passage of the last higher education reauthorization – has made accountability more important.

When everybody’s not-for-profit, when you are all in the business of delivering an education rather than trying to achieve the highest return for your shareholders, accountability isn’t as important. It’s not that it isn’t important, but when you insert into higher education a motivation to deliver return for shareholders, then all of a sudden you see the results we have today, where 10%  of students are going to for-profit schools, but 25% of all federal aid is going to for-profit schools and 30% of all defaults are happening at for-profit schools. 

It begs us to be more concerned about this accountability question.

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