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Durbin, Cummings Introduce Legislation To Put Coordinated Federal Oversight Of For-Profit College Industry Into Law

Feb 5, 2015
Press Release

Durbin, Cummings Introduce Legislation To Put Coordinated Federal Oversight Of For-Profit College Industry Into Law

Committee to improve enforcement of federal law and increase for-profit college accountability to students and taxpayers established by executive action last year

 

[WASHINGTON, D.C.] – Assistant Senate Democratic Leader, U.S. Senator Dick Durbin (D-IL) and U.S. Representative Elijah Cummings (D-MD), the Ranking Member of the House Committee on Oversight and Government Reform today introduced legislation that would put into law an interagency committee that is tasked with improving coordination in federal and state oversight of the for-profit college industry. 

In October, the Department of Education announced it would create an interagency oversight committee based on the Proprietary Education Oversight Coordination Improvement Act - introduced by Durbin, Cummings and U.S. Senator Tom Harkin (D-IA) - which aimed to improve enforcement of federal laws and regulations while increasing accountability of for-profit colleges to students and taxpayers.  Today’s legislation would codify those efforts and ensure the task force is providing useful information to policymakers and parents and students.

“For many years, for-profit schools were allowed to operate one step ahead of the law.” said Durbin. “With so many agencies involved in these oversight efforts it is important that they are effectively working together to hold these schools accountable to taxpayers who often subsidize up to 90% or more of their operations and to students who ultimately are the victims of their schemes.  Putting President Obama’s committee into law will give it additional authority to coordinate oversight and take action when necessary.”

"Our legislation will streamline oversight of for-profit colleges to combat common deceptive practices and help students get the high quality education they pay for and expect," said Cummings. "I am pleased the Department of Education has already taken some action, but Congress must do more to protect these students and the investments taxpayers are making in these schools."

The Durbin-Cummings bill would require the formation of an interagency committee - the Proprietary Education Oversight Coordination Committee - made up of representatives from the following agencies: the Department of Education; the Consumer Financial Protection Bureau; the Department of Justice; the Securities and Exchange Commission; the Department of Defense; the Department of Veterans Affairs; the Federal Trade Commission; the Department of Labor and the Internal Revenue Service.

The Proprietary Education Oversight Coordination Improvement Act requires the committee to:

  • Hold quarterly meetings as a group and annual meetings with State Attorneys General to coordinate federal and state activities related to for-profit school oversight;
  • Publish a whole-of-government report on the for-profit college industry in order to compile, in one place, student complaints, data about student outcomes and financial information related to executive compensation, marketing and other metrics;
  • Publish a warning list of schools that have engaged in illegal activities or for which there is sufficient evidence of widespread or systemic abusive, unethical, fraudulent or predatory practices.

The for-profit college industry receives more than $25 billion in federal dollars which is enough funding to make it the ninth largest federal agency.  While they enroll only about 10% of all college students, they take in 20% of the Department of Education’s federal student aid funds and account for a disproportionate 44% of student loan defaults. 

Organizations supporting today’s legislation include: the United States Student Association, the American Federation of Teachers, the National Education Association, the National Association for College Admissions Counseling, VetJobs and Veterans Education Success.

Durbin has been working since 2009 to protect students from the predatory practices of the for-profit college industry.  In November 2013, he introduced legislation in the Senate that would help put an end to the for-profit industry’s predatory marketing campaigns and aggressive recruiting of veterans, servicemembers and their families.  The Protecting Our Students and Taxpayers (POST) Act, which U.S. Representative Steve Cohen (D-TN) introduced in the House of Representatives, would eliminate the loophole that allows these publicly traded companies to receive more than 90% of their revenue from the federal government. 

Cummings has done significant work to investigate the practices of for-profit colleges, including an investigation into the compensation packages of top executives at these institutions. Cummings requested copies of compensation agreements for senior executives at 13 for-profit schools to determine whether salaries, bonuses, and other compensation are appropriately tied to the performance of students they educate.

114th Congress