Relief Needed for Career College Students Who Have Been Tricked into Enrolling in Unaccredited Programs

article | June 28, 2011

If you’ve followed the Senate Health, Education, Labor and Pensions (HELP) Committee investigation into the for-profit higher education industry closely, you have probably heard of Yasmine Issa, the single mother of twins who completed a training program in ultrasound technology at Career Education Corporation’s Sanford Brown University in 2008 only to find out later that the program was not accredited. Recruiters, who had stressed the school’s accreditation to Issa, apparently neglected to mention that the ultrasound program lacked the necessary specialized accreditation. As a result, Issa, who paid $32,000 for the program (including $15,000 in federal loans), wasn’t eligible to sit for the licensing exam or to find work as a sonographer.

Issa is not alone. The Senate investigation, the news media, and lawsuits against for-profit college companies suggest that her situation is more common than you would think. Recognizing the seriousness of the problem, the Department of Education took an important step last fall when it finalized regulations that aim to crack down on such abuses. Under the rules, which go into effect on Friday, schools that mislead students into signing up for programs that lack the specialized accreditation needed to get jobs could face severe penalties, including being barred from participating in the federal student aid programs.

This is a major change that, if well enforced, should go a long way in safeguarding students in the future. But this regulation is of little solace to those who have already fallen victim to such deception. These students have been left worse off than before they enrolled -- graduating with significant debt but without the credentials they need to become gainfully employed in the field for which they sought training.

Is there anything that the U.S. Department of Education can do to help these students? The answer is yes, but unfortunately the Education Department continues to act as if it was powerless to provide relief to those who have been harmed.

At issue is a provision in the Higher Education Act that authorizes the Education Secretary to discharge the federal student loan debt of students who were falsely certified for enrollment and to recover those loan amounts from the offending schools. The aim of the "False Certification" provision is to stop colleges from enrolling students into programs from which they legitimately can not benefit.

However, as consumer lawyer Deanne Loonin wrote in a recent guest post here, the Education Department has taken a very narrow reading of the law applying it “mainly to students who were admitted to a school (and signed up for federal financial aid) even though they lacked a high school diploma or its equivalent, and hadn’t passed a properly administered government approved 'ability to benefit' test.” As a result,  she added, “students who are admitted on false pretenses but have a high school diploma or G.E.D. are generally not eligible for the discharge.” There is, however, an exception. Students are eligible for the discharge if, at the time they enrolled, they did not meet the state requirements for employment in the field for which they sought training -- for example, students with criminal records who are admitted into criminal justice programs, even though they are generally barred from working in law enforcement.

That’s a step in the right direction but, in our opinion, doesn’t go nearly far enough in providing relief to students who have been enrolled under false premises. Luckily, the Education Department will have a chance to rethink its position on these regulations during the agency’s upcoming negotiated rulemaking sessions, which could start as early as this fall.

Leading the charge to get the Department to revise its “false certification” rules “to address the recruitment and enrollment of students into career education programs that lack the necessary programmatic accreditation” is Sen. Jeff Merkley, an Oregon Democrat who sits on the Senate HELP Committee. In a letter to Education Secretary Arne Duncan last month, Merkley wrote:

Enrolling students in a program that prepares them for a career in which the program is not accredited (assuming accreditation is available) creates the same problem for students and taxpayers as the problems addressed in the current rules. The problem of unaccredited programs also fits squarely within the scope of the statutory provisions that address false certification, which do not limit the specific types of false certification to be addressed. As such, I strongly believe that the upcoming negotiated rulemaking should explicitly address programmatic accreditation for certain programs in which specialized programmatic accreditation is offered.

At Higher Ed Watch, we wholeheartedly agree and would go a step further. If the Education Department finds that a school is routinely admitting students into unaccredited programs from which they cannot benefit, it should provide a group discharge to all affected students. As Loonin has argued, when pervasive and systematic abuses are discovered, it shouldn’t be left to borrowers to have to find out on their own whether they are eligbile for a loan discharge.

Yasmine Issa’s story had a happy ending. After hearing Issa talk about her experiences at a Senate hearing at which they were both testifying, the short-seller Steve Eisman offered to repay her loans. But others who have been tricked into enrolling into programs that lack accreditation -- and left with worthless degrees -- haven’t been so lucky. Don’t they deserve some relief so they can put the experience behind them? And shouldn’t the schools that bamboozled them pay a price for their deceit? We certainly think so and hope that the Education Department has a change of heart.