But some industry leaders say recent state enforcement has muddied the already murky waters of regulation.
In Massachusetts, for example, Attorney General Martha Coakley, a candidate for governor, has pushed hard for new limits on for-profit colleges’ lending and recruiting practices. Some of the proposed rules would conflict with federal regulations and accreditors’ requirements, said Catherine Flaherty, executive director of the Massachusetts Association of Private Career Schools.
“They’re not the same, and therein lies the frustration,” Flaherty said. “We’d just like one set of rules to live by. We don’t mind rules and we’re happy to abide by them.”
Those in favor of tougher rules have applauded the cohesive approach of the states led by Kentucky, but some also worry that the separate actions by states including California, Massachusetts and New York could fragment enforcement efforts.
“If you look at the New York settlement with Career Education Corp., that really begs the question, what about students in the other 49 states?” said Pauline Abernathy, vice president of The Institute for College Access and Success, a California-based think tank. “It does nothing to help those students.”
New York Attorney General Eric Schneiderman declined to answer questions about the settlement or potential future actions against the for-profits. Several other attorneys general also declined to comment.
Kanter agreed that the fractured enforcement approach may not be the best way to crack down on these institutions. States and federal authorities need to communicate to make sure they’re not duplicating each other’s efforts.
“When you have so many competing interests, it gets messy,” she said. “We want to keep things clear and simple as a nation.”
Students like Benbow are exactly the reason states should be filling the enforcement void left by what he said is an ineffective Congress and gridlocked Department of Education, said David Halperin, a Washington, D.C., lawyer who has urged state and federal policymakers to take stronger action against the industry.
“This is not like selling pomegranate shampoo based on false claims,” he said. “For-profit colleges are a big drag on the economy. The debt is preventing people from spending money.”
A handful of recent actions suggest that some other federal agencies may join the CFPB in scrutinizing for-profit colleges. The Justice Department, Securities and Exchange Commission and Defense Department all have taken various actions against the industry in recent months.
Not all for-profit schools oppose tighter state and federal regulation.
Monroe College, with campuses in the Bronx and Westchester County, N.Y., welcomes the scrutiny, said President Marc Jerome, whose family has run the school for 80 years. Other colleges should accept the regulatory complications that come with their business models, he said.
“Higher education is a highly regulated area and it’s hard enough to operate in one state, much less several,” said Jerome, who has been working with federal regulators to help craft new rules for colleges. “Schools that have chosen that approach need to deal with it.”
Alumni who say they were burned by for-profit colleges want federal and state regulators alike to do a better job monitoring the schools.
As a computer-animation student at for-profit Gibbs College in Boston, Mike DiGiacomo was told he would have an internship at a television studio. Instead, he ended up carrying laundry and other belongings for a wedding photographer.
“I was looking to pursue animation and my mom had seen a commercial,” said DiGiacomo, 33. “I wish I had done more research. I learned the hard way.”
This story by Matt Krupnick originally appeared on The Hechinger Report.
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