25 State Attorneys General Call for FTC Action on For-Profit Colleges

Advocate Andy

AGs tell federal government that deceptive marketing must stop

In response to a request for comment from the Federal Trade Commission (FTC), a group of 25 state Attorneys General called on the regulatory agency to take action against for-profit colleges for using deceptive marketing tactics to lure in students.

State attorneys general have long been at the forefront of efforts to hold predatory for-profit colleges accountable for defrauding its students, investigating and taking enforcement action against schools like Ashford University and Corinthian Colleges for misrepresentations related to post-graduation earning potential. In their letter, the attorneys general encourage the FTC to look at the harm these schools can and often do inflict on students, as well as the variety of ways in which for-profit schools misrepresent future earnings, as part of its rulemaking to strengthen its ability to obtain restitution in cases involving misleading earnings claims.

California Attorney General Rob Bonta was among the group signing the comment letter to the FTC. In a statement, he explained the importance of taking action.

“Many students have seen their higher education dreams turn into a nightmare after enrolling in a predatory for-profit institution,” said Attorney General Bonta. “Lured in by false claims of future earnings, these students leave weighed down by debt and unable to find a job. My office has fought long and hard to get restitution for many of these defrauded student borrowers, and we’re committed to doing all we can to combat this industry-wide practice of deception. I encourage the FTC to look closely at our work on this front as it works to develop new tools to hold predatory actors accountable.”

The attorneys general outlined multiple ways in which for-profit colleges misrepresent the benefits of attending their schools. These include:

  • Claims about the amount that students might expect to earn upon graduation that are both fundamentally false and fail to take into account the abysmal program completion rates of the school;
  • Claims that completion of its programs will lead to employment in a specific industry; and
  • Claims that a student’s future earnings will be sufficient to cover the cost of attending the school.

The comment letter filed by the AGs also noted:

For-profit schools operate to maximize profit for their owners and shareholders, spending a significant portion of their budget on marketing to entice students to enroll. These schools are notoriously expensive, leading many students to take out federal student loans to afford enrollment. The average tuition for certificate programs at a for-profit college, for example, is four-and-a-half times more than that of a comparable program at a community college. For-profit colleges also have significantly lower completion rates than other higher education institutions, leaving many students with tens of thousands of dollars of debt and no degree to show for it.

Attorneys General in California, Illinois, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and Wisconsin all signed the letter.

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Andy Spears is a middle Tennessee writer and policy advocate. He reports on news around public policy issues - education, health care, consumer protection, and more.

Nashville, TN

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