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WASHINGTON – Today, U.S. Senator Chris Murphy (D-Conn.) and U.S. Senator Dick Durbin (D-Ill.) were joined by Maggie Thompson, campaign manager of “Higher Ed, Not Debt,” a multi-organization campaign housed at Generation Progress, to introduce the Students Before Profits Act of 2015, a bill to protect students from deceptive practices and bad actors in the for-profit college sector. The bill, which is cosponsored by U.S. Senators Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), and Richard Blumenthal (D-Conn.), ensures students have access to important and accurate information, strengthens oversight and regulation, and holds for-profit schools and their executives accountable for violations and poor performance.

Currently, for-profit colleges enroll 10% of all postsecondary students, but account for 44% of all student loan defaults. A Senate HELP Committee investigation found that, on average, for-profit colleges allocate about 23% of revenue to recruiting and marketing, 19% to profit, and just 17% to academic instruction. Since Corinthian Colleges, the infamous for-profit institution, closed its doors earlier this year after extensive allegations of fraud, the U.S. Department of Education has forgiven $40 million in student loan debt held by former students. The Students Before Profits Act provides for new tools to recoup federal dollars from the owners and executives who reap huge profits from failed, fraudulent for-profit institutions.

Below are highlights from the press conference where Murphy and Durbin introduced the legislation: 

Murphy said: We have been watching a catastrophe unfold for students all across this country for a number of years. For-profit colleges, which used to occupy a very small share of the higher education market, have grown in such size and such scope to really pose a threat to the way in which we provide an education to kids across the country. Students are getting a bad bargain from for-profit colleges…to me, it’s unconscionable. Students have become a commodity. Students have become a source of immense profit for these for-profit colleges, and it comes at a cost to the students’ education and their pocketbooks. 

Murphy continued: These colleges are spending more money on marketing themselves than they are on actually providing the education. Congress can’t allow that to happen because these colleges are playing with taxpayer dollars. For most of these schools, 90% of their revenue comes from the federal government. This legislation will make these schools and their companies’ directors and owners personally liable if they are caught defrauding students. It will include enhanced civil penalties against institutions and their executive officers when they lie to students about their employment prospects, their default rates, their costs, their admission requirements, or completion rates, and it will stop repeat offenders from defrauding students. The Students Before Profits Act will send a very strong message to these companies that there will be real consequences if they continue to defraud students.

Durbin said: What students find when they get into most of these for-profit colleges and universities is that they face the prospect of debt, dropout, default, and dead-end jobs. You won’t be surprised to know that the students who finish for-profit schools have some of the lowest earnings; they don’t get their money’s worth when it’s all over. So who loses? Students have wasted their time, they’ve incurred debt – debt they will carry for a lifetime – and what do they end up with when it’s all over? When students default and don’t pay back their loans, the taxpayers lose. And the next generation of students has less money coming back to the Treasury to take care of the need for them to go to real colleges. We’ve got to hold those responsible for these education schemes personally responsible. If you believe in transparency, in accountability, then the Murphy bill is the bill that you should support. 

Maggie Thompson of “Higher Ed, Not Debt” said: Our organization and our partners first began working on this issue when we realized that many of the students we were hearing from who were struggling with their student debt had attended for-profit schools. We realized how important it was for these schools be held accountable to the students who they deceived. Almost half of all the default student loans in this country come from students who attended a for-profit institution. It’s impossible to have an honest conversation about how to address the student debt crisis without addressing the huge role that these schools play in the debt crisis. The Students Before Profits Act provides crucial oversight to ensure that students who were deceived by a predatory institution can be made whole again and that the executives who profited off these students are held accountable.