The regents’ concerns are dual. They are determined to stop unscrupulous schools from taking advantage of the state’s most vulnerable students—and from sucking dry the state financial aid program. New York has 41 degree-granting commercial colleges and 400 nondegree-granting ones. They tend to set their tuitions at the exact same price as the grant maximum allowed by the state aid program.

The board instated the freeze after confronting one particularly troublesome institution for aggressively recruiting poorly prepared students—students who often pay with federal and state funds but then drop out because they can’t handle the course load, leaving the money with the school and their ambitions dashed.

Meanwhile, in Washington, D.C., abuses by for-profits have been a concern of the AFT and many organizations weighing in on renewing the Higher Education Act. From the start, House Republican leaders John Boehner (Ohio) and Howard “Buck” McKeon (Calif.) have signaled their desire to “level the playing field” for their proprietary college donors desiring full access to federal aid dollars.

To do this, their committees have passed bills eliminating two significant provisions currently in the act: the 90/10 rule and the 50 percent rule. The 90/10 rule requires for-profits to take in at least 10 percent of their revenue from nonfederal sources. The 50 percent rule requires that no more than half an institution’s courses or students can be offered or enrolled via distance learning. Both measures, which the AFT fought hard to have included in past versions of the Higher Education Act, prevent for-profit college gouging of student “customers” who may not be cut out for college.

In December, Congress passed a budget reconciliation bill that includes a provision repealing the 50 percent rule. Congress is expected to hold a final vote on the bill next month.

“We have been disappointed that, so far, Congress has not provided the kind of protections in reauthorization of the HEA that students need,” says Larry Gold, director of AFT higher education. “New York is taking a bold and necessary step to protect its students and its taxpayers. We hope other states, and the federal government, take note.”

New York is going after institutions like Interboro Institute, the New York City school suspected of cheating on student aid eligibility and neglecting academic support. New York’s education department found that many Interboro students drop out before completing even one semester, and fail to graduate in the 16 months promised by Interboro ads. It has ordered the school to reduce enrollment and proscribed opening new locations. The state comptroller canceled $903,150 in financial aid due to eligibility violations there.

In all, the New York Times reports that the state’s for-profits gobble up more than $100 million in state aid.

New York is not alone. Among other schools under similar allegations are Brooks Institute of Photography in California, a Career Education Corp. school, for misleading recruitment practices; Corinthian Colleges in Florida, for questionable sales; and Harrison Career Institute in Pennsylvania, for questionable records and money management as well as failure to deliver services. Decker College in Kentucky drew national attention when the FBI swooped in to investigate its operations; the school closed three days later, then filed for bankruptcy. Chief executive officer (and former Massachusetts governor) William F. Weld resigned but still is mounting a campaign for governor of New York. Allegations against the school involve deceptive recruiting and inadequate course work for construction trade licensure, as well as suspicions that tax forms were falsified for students to qualify for loans. Weld continues to defend the school.

While for-profit schools can serve an important role in training populations who traditionally have less access to higher education—career training, in particular, can be a tremendous boon in low-income communities—they are anathema to higher education as a whole when run as profit-making machines rather than educational institutions. Without controlling mechanisms in place, says Gold, they do a real disservice to the very people they are supposed to be helping. “Some for-profits are too oriented to by-the-numbers job training, without giving students the broad education they need to thrive beyond a particular job,” he says. Regulations like the ones put in place in New York may help by making the institutions more responsive, and responsible, to their students and the investments of their state.

“We definitely think the moratorium is a good idea,” says United University Professions/AFT president and AFT vice president William Scheuerman, in New York. “There should be a closer look at some of the proprietary colleges. That’s the problem with the higher ed reauthorization. It loosens these regulatory controls rather than taking a closer look.”