July 08, 2021

Wyden, Colleagues Submit Public Comment on Rulemaking to Department of Education, Urge Accountability of For-profit Colleges

Washington, D.C. – U.S. Senator Ron Wyden said today he joined 11 colleagues in sending a public comment to the U.S. Department of Education regarding its upcoming accountability rulemaking related to improving program integrity, oversight accountability, and consumer protection for institutions of higher education that receive taxpayer-funded federal financial aid.

The letter laid out the senators’ priorities for rulemaking, urging the Education Department to address the Trump Administration’s disastrous deregulation that led to inadequate oversight and predatory for-profit institutions raking in taxpayer dollars while failing to meet financial health and administrative capability standards.

“For-profit colleges enroll just eight percent of all postsecondary students but account for more than 30 percent of all student loan defaults.   By definition, they have a distinct governance structure that prioritizes profit over value for students.  Multiple provisions in the Higher Education Act reflect Congress’ longstanding concerns with poor outcomes at these institutions,” the senators wrote. Unfortunately, the widespread deregulation efforts of the former Administration largely favored the interests of corporate executives and private equity owners over the interests of students.  We hope your Department will strongly consider the concepts outlined in this letter in its upcoming negotiated rulemaking, with the primary goal of strengthening regulations to protect students and taxpayers from the risks and costs of predatory for-profit colleges.  These rules also provide a critical opportunity to strengthen accountability at all institutions of higher education.”

The letter went on to note seven priorities for the Department of Education:

  • Reversing the rescission of the gainful employment rule;
  • Establishing better, earlier indicators of risky financial status or liabilities that might force a school to close;
  • Improving the federal government’s role in holding Title IV participants accountable;
  • Preventing for-profit institutions from masquerading as non-profit institutions;
  • Increasing protections for students who qualify for Pell Grants from predatory for-profit colleges;
  • Restoring the prohibition on mandatory arbitration agreements and class action bans; and,
  • Implementing Pell restoration for students who are incarcerated.

“The goals outlined above for the rules governing accountability and program integrity will help improve consumer and taxpayer protections and address racial disparities, particularly among for-profit colleges,” the senators wrote. “But who is at the negotiator’s table will also greatly determine progress towards these goals.  There must be substantial representation of students and borrowers of color, students and borrowers with disabilities, those from low-income backgrounds and veterans as negotiators during rulemaking.  In addition, State attorneys general—recognizing the important historical role they have played in these matters—must have a seat at the table.”

Earlier this week, Wyden and colleagues sent a letter urging the Department of Education to expand student debt relief and highlighted the need for policies that improve and expand our existing loan repayment and forgiveness programs to ensure borrowers can access the relief they are owed.

In addition to Wyden, other senators signing today’s letter on rulemaking led by U.S. Sens. Dick Durbin (D-IL) and Patty Murray (D-WA) were U.S. Sens. Jack Reed (D-RI), Elizabeth Warren (D-MA), Sherrod Brown (D-OH), Chris Van Hollen (D-MD), Richard Blumenthal (D-CT), Ed Markey (D-MA), Raphael Warnock (D-GA), Tina Smith (D-MN) and Tammy Baldwin (D-WI).

Full text of the letter is here.