FTC: For-profit colleges warned about unfair, deceptive practices


Credit: FTC

WASHINGTON, DC (WWLP)– The Federal Trade Commission (FTC) is warning for-profit colleges about unfair or deceptive recruitment practices.

The FTC has issued Notice of Penalty Offenses to 70 of the largest for-profit higher education institutions reminding them about the financial penalties that come with false promises they make about their graduates’ job and earnings prospects and other outcomes. The Commission is utilizing the Penalty Offense Authority, found in Section 5 of the FTC Act, the agency’s first use of this authority in an effort to protect students and their families.

Under federal law, the FTC may put companies on notice that some practices have been found to be unfair or deceptive in administrative cases with final cease and desist orders, other than consent orders. If a company knows about (the law says has “actual knowledge” about) the orders and uses those same deceptive marketing tactics, the FTC can sue the company in federal court for civil penalties. The Notice outlines those prohibited practices: claims about the career or earning prospects of their graduates, the percentage of graduates that get jobs in their chosen field, whether the school can help a graduate get a job, and more. These are just the kinds of information a student would want to know before committing to a program, and it’s exactly how some for-profit schools market their programs.

The FTC has settled multimillion dollar cases with several big name schools including a record $191-million with the University of Phoenix and $100-million with DeVry University.

Members of the U.S. military and veterans have been aggressively targeted by some for-profit schools because of the education benefits servicemembers can use to pay for college. The FTC settled a $30-million case against Career Education Corporation (“CEC”). They were charged with recruiting prospective students using marketers who falsely claimed to be affiliated with the U.S. military, tricking students who were looking to serve their country.

There are tools to help veterans, servicemembers, and all kinds of students navigate the education marketplace and blow the whistle on bad actors. If you have a federal student loan and feel like a school misled you or broke the law, apply for loan forgiveness through the Department of Education’s (ED’s) Borrower Defense to Repayment procedures. If you’re getting started (or re-started), ED’s Opportunity Centers are designed to help prospective students (including people of modest means, first-generation college students, and veterans) apply for admission to college and arrange for financial aid and loans. Find one near you.

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