U.S. to fine for-profit colleges for false promises about graduates' prospects

Grand Canyon Education

06/10/2021 22:35

WASHINGTON, Oct 6 (Reuters) - Some 70 U.S. for-profit
colleges, including some of the largest, were sent notices that
the Federal Trade Commission could impose "significant financial
penalties" if the schools deceive students about how successful
their graduates were, the agency said on Wednesday.
    The FTC commissioners, who often split along party lines,
voted 5-0 to use a dormant penalty authority against any school
that, for example, overstated how likely it was that graduates
would get jobs and how much they could hope to earn.
    The notices were sent to schools https://www.ftc.gov/system/files/attachments/penalty-offenses-concerning-education/higher_ed_notice_recipient_list.pdf
 that included "the largest for-profit colleges and vocational
schools" in the United States, the agency said in a statement,
while adding that a school receiving a letter was not an
indication of wrongdoing. 
    Complaints about for-profit schools rose some 70% between
2018 and 2020, the agency said. 
    The notices echo an effort by the Obama administration to
pursue for-profit schools whose former students have high loan
default rates. At least one chain of schools, Corinthian
Colleges, collapsed when its students were denied access to
federal student loans.
    "For too long, unscrupulous for-profit schools have preyed
on students with impunity, facing no penalties when they defraud
their students and drive them into debt," said FTC Chair Lina
Khan in a statement. "Working closely with our state and federal
partners, we’ll be monitoring this market carefully."
    The letters were sent to the University of Phoenix, DeVry
University and Grand Canyon University  LOPE.O , among others.
None of the three immediately responded to a request for
comment. 

 (Reporting by Diane Bartz; Editing by Cynthia Osterman)
 ((Diane.Bartz@thomsonreuters.com; 1 202 898 8313;))