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Universities and colleges

For-Profit Colleges Under Fire: Senator Durbin Calls for Action

Strategic Insights

— 1 min read

As the new school year begins, U.S. Senator Dick Durbin is sounding the alarm on for-profit colleges, warning prospective students about the risks associated with these institutions. Despite enrolling only 10% of all college students, for-profit colleges take in 20% of the Department of Education's federal student aid funds and account for a disproportionate 44% of student loan defaults. Durbin is calling on the U.S. Department of Education to use its full authority to end abusive practices and improve student outcomes, citing the collapse of Corinthian Colleges, Inc. as a wake-up call.

Key Takeaways:

  • For-profit colleges enroll only about 10% of all college students, but take in 20% of the Department of Education's federal student aid funds.
  • For-profit colleges account for a disproportionate 44% of student loan defaults.
  • The collapse of Corinthian Colleges, Inc. was a wake-up call for the Department of Education and should result in earlier and more aggressive oversight of for-profit colleges.
  • Senator Durbin is calling on the Department of Education to use its full authority to ensure current and prospective students don't wind up in the same situation as those who were left with nothing but a mountain of debt.
  • The for-profit college industry receives more than $25 billion in federal dollars, making it the ninth largest federal agency.
  • At the time of closure of Corinthian Colleges last remaining campuses, they were still participating in the federal Title IV program and receiving taxpayer dollars.
  • For-profit companies like Career Education Corporation, Education Management Corporation, and ITT Tech are facing investigations and lawsuits similar to what led to Corinthian's demise.

Statistics:

  • 10% of all college students are enrolled in for-profit colleges, but they take in 20% of federal student aid funds.
  • 44% of student loan defaults in the country are attributed to for-profit colleges.
  • The for-profit college industry receives more than $25 billion in federal dollars per year.
  • Corinthian Colleges, Inc. received over $1 billion in taxpayer dollars per year at the time of their closure.
  • Only about 20% of students at ITT Tech will graduate with a degree, while the rest will default on their loans.

Sources:

  • Illinois Senator Richard J. Durbin's press release [1]
  • Chicago Tribune [2]
  • WBEZ [3]

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