Olympia – The Washington House of Representatives passed legislation to protect students who enroll at for-profit colleges or career schools in Washington from deceptive and fraudulent advertising and recruitment claims. The Bill, HB 1439 by Rep. Gerry Pollet (D-Seattle), was passed by a 56-42 bipartisan vote.
Pollet cited a February 22 letter by Washington Attorney General Bob Ferguson and eighteen other attorneys general in support of the central provision of the bill to protect students by barring the schools from engaging in misleading or deceptive advertising or recruiting practices. The schools could not claim that their graduation, employment or loan default rates or post-graduation wages and similar outcomes are better than the results they report to the State or US Department of Education:
“These (for-profit) schools, and others like them, engaged in a variety of deceptive and abusive practices. Some promised prospective students jobs, careers, and further opportunities in education that the schools could not provide. Many schools inflated job placement numbers and/or promised career services resources that did not exist.”
It’s unconscionable that some of these schools led students into massive student loan debts with no realistic chance of paying off the loans,” said Pollet. “Other Washington state students found themselves having paid for years of school with huge loans only to find that schools had misrepresented that their credits would transfer when the schools closed. It is up to us to protect student consumers here in Washington because the federal government is clearly not going to under the new administration.”
While championing related legislation last year, Pollet succeeded in gaining approval through the 2016 supplemental budget to authorize the William D. Ruckelshaus Center to lead a collaborative stakeholder review of the for-profit career school and college sector in Washington and how the schools are regulated by different agencies with a hodge-podge of different standards. The first phase of that review produced a recommendation included in the bill the House just passed, requiring honest disclosure of outcomes in student recruitment efforts.
“Many honest for-profit career schools and colleges are harmed by competitors who use these deceptive practices,” said Pollet. “It’s only fair to provide the honest schools with a level playing field.”
Some national chains of for-profit colleges have been caught engaging in business practices that are deceptive and harmful to students. For example:
- Corinthian / Everest Colleges was found to have been selling students loans with 15% interest rates and 6% loan origination fees, which students were required to pay back while still in school. The federal government documented that Corinthian barred students from class if they were 30 days behind on a payment, and 60% of its students defaulted on their loans within 3 years
- Federal prosecutors and the California Attorney General found that Corinthian marketed to veterans and targeted recruitment of students who had “minimal to nonexistent understanding of basic financial concepts”
- Corinthian charged students $33,000 – $43,000 for an Associate’s degree, compared with our community colleges which charge under $10,000
- An Associated Press investigative report found that Zenith, which bought Everest Colleges from Corinthian, kept airing the same deceptive ads which had been cited in state and federal lawsuits against Corinthian
HB 1439 would authorize Phase Two of the Ruckelshaus study with a report to the Legislature at the end of 2017, using a facilitated dialogue between schools, agencies and other stakeholders. The bill also directs the study to include recommendations on creating an Ombud to help protect student consumers at these schools, as well as recommendations for how the schools are regulated in Washington. Currently, three different state agencies have some oversight role regulating for-profit career schools, resulting in widely different requirements for protecting students when a school closes.
The bill now goes to the senate for consideration.
