A new bill introduced by two lawmakers aims to put an end to federal funding for for-profit colleges that put students under huge loan debts.
Rep. Pramila Jayapal (WA-07), and Senator Sherrod Brown (D-OH) teamed up to introduce the Students Not Profits Act that seeks to remove for-profit institutions from the definition of institution of higher education thus making them ineligible to receive Title IV Federal student aid.
It would also remove references to for-profit institutions throughout the Higher Education Act of 1965 and establish a transparent process for approving the conversion of a for-profit school to a nonprofit school.
“The Students Not Profits Act is a bold plan to stop predatory, for-profit institutions from exploiting disadvantaged students striving for a better future through higher education,” said Rep. Jayapal.
“I met with students who were left with burdensome debt, incomplete degrees and few options for recourse after the for-profit Art Institute of Seattle abruptly closed earlier this year. It’s time for taxpayers to stop subsidizing the institutions that put hardworking students through this heartbreaking mess.”
A recent Brookings Institution report found that most online for-profit institutions direct their marketing and recruiting strategies to promote programs in ways that mostly target vulnerable students. Their business models rely heavily on attracting students from vulnerable groups such as African Americans, women and adult students
The report further noted that the need-based federal financial aid made up 70 percent of revenue for 10 of the largest 11 for-profit colleges.
Organizations like the American Federation of Teachers, Americans for Financial Reform, the Debt Collective, Demos, and the Project on Predatory Student Lending have extended their support for the bill.
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