In 2010, the Government Accountability Office published a report detailing the results of “undercover tests” at 15 for-profit colleges conducted in order to discern whether these schools might be engaging in fraudulent or deceptive marketing and admissions practices. For-profit schools derive much of their revenue (and profits!) from federal funding sources, leaning on the availability of grants and loans to entice many of their students. The results were shocking. The GAO found “4 colleges encouraged fraudulent practices and that all 15 made deceptive or otherwise questionable statements to GAO’s undercover applicants.”
Fast forward to 2022, and for-profit colleges are in the news again as the Biden administration attempts to crack down on colleges and universities after years of relaxed rules enabled by the Trump presidency. A mere 26% of students who complete degree programs at for-profit institutions do so in six or fewer years. 68% of students in private colleges and 62% in public colleges obtain degrees within that same time period.
Along with renewed attention to for-profit schools comes a fresh round of student loan forgiveness proposals. This week, Katie and Chelsea are bringing you up to speed on the proposal, who would benefit from it, and why the conversation around loan forgiveness deserves more nuance than it currently receives.