PRO Students Act cracks down on predatory profiteers

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When Michael Adorno-Miranda enrolled in college, he was the first in his family to "live the dream," he says. Admissions personnel at Everest College, a for-profit school under the Corinthian Colleges umbrella, "talked a good game," he says, and he felt sure it would prepare him for a successful career in information technology.

Michael Adorno-MirandaBut instead of the high-quality education he was promised, his assignments involved outdated software, obsolete hardware and otherwise outmoded technology. Now, at age 33, he has no job prospects and has moved back in with his mother. Plus, he is saddled with $37,000 in debt. What he thought would launch him toward life as an independent adult "turned out to be a nightmare."

Adorno-Miranda (pictured right) is one of the Corinthian 100, students who are refusing to pay their student loan debt because their "education" at Corinthian Colleges gave them no useful credentials—but a whole lot of debt. The students are pressing the U.S. Department of Education to discharge their loans and advocating for stricter regulations to prevent other institutions from abusing students in the future.

To help them, Rep. Mark Takano (D-Calif.) has launched the Protections and Regulations for Our Students (PRO Students) Act. Its provisions are designed to protect students from predatory, deceptive and fraudulent practices, particularly in the for-profit college sector. Rep. Susan Davis (D-Calif.) and Rep. Steve Cohen (D-Tenn.) are co-sponsors of the act, and AFT President Randi Weingarten is a strong supporter.

At a press event April 30, these leaders first came out for debt relief, then in support of the PRO Students Act. "You can't make students who have already been defrauded beg for a discharge," said Weingarten, noting that she had just signed a letter to Education Secretary Arne Duncan calling on him to cancel the Corinthian students' debt. "You need to discharge this debt."

Weingarten and Rep. Takano"We are a country that tells students that college is really important, but then allows predatory institutions like Corinthian Colleges to stick them with crippling debt, worthless degrees and no prospects for the future," said Weingarten (pictured with Takano). The PRO Students Act could help change that so "when the bad actors act badly, something will happen to them, instead of to students like Michael."

The act is designed to address the need for stronger regulation of the for-profit school industry. Currently, for-profit schools enroll just 13 percent of all postsecondary students but account for nearly half of all student loan defaults. They allocate about 23 percent of their revenue to recruiting and marketing, 19 percent to profit, and just 17 percent to academic instruction. And 72 percent of them produce graduates who earn less, on average, than high school dropouts.

Takano noted that, for all those reasons, the PRO Students Act would:

  • Require proprietary institutions to derive at least 15 percent of their revenue from nonfederal student aid, and include military and veterans' education benefits in that calculation;
  • Prohibit schools from using student aid revenue for recruiting and marketing;
  • Launch a complaint-tracking system;
  • Establish an oversight committee;
  • Strengthen sanctions for violations, establish a Student Relief Fund and bolster consumer protections for students;
  • Improve access to information about loans and for-profits;
  • Prohibit loans that waive the rights of borrowers to arbitration against their lenders;
  • Prohibit incentive compensation based on recruitment or academic success; and
  • Strengthen whistleblower protections for faculty and staff.

"It is clear we have to get Wall Street out of education," said Takano. "We are here today to take the first step."

[Virginia Myers/AFT photos]

Pro Students Act Press Conference

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