Durbin co-sponsors Students Before Profits Act
U.S. Sen. Dick Durbin (D-IL) joined U.S. Sens. Chris Murphy (D-CT), Elizabeth Warren (D-MA) and Sherrod Brown (D-OH) in introducing the Students Before Profits Act of 2015.
The bill aims to protect college students from deceptive practices in the for-profit college sector, while ensuring students have access to important and accurate information. The bill also strengthens oversight and regulation, and holds for-profit schools and their executives accountable for violations and poor performance.
"According to a recent report by Brookings, in 2014, 13 of the top 25 schools whose students owed the most in federal debt were for-profit schools," Durbin said. "When one of these schools collapses under the weight of its own wrongdoing, as was the case with Corinthian, students are displaced, taxpayers are left on the hook and company executives scatter to the winds. Well, this bill would change that. Among other things, it would make executives – like Corinthian CEO Jack Massamino, who made more than $3 million a year – personally liable for the taxpayer losses they create by taking advantage of students. This will bring real fairness to students who have been victimized and to taxpayers who have been fleeced by bad-acting for-profit colleges.”
Currently, for-profit colleges enroll 10 percent of all post-secondary students, but account for 44 percent of all student-loan defaults. A Senate 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.
Because Corinthian Colleges 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.