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For-Profit Colleges Could Get $1,000,000,000 of Federal Bailout Funds
Predatory, for-profit schools owned by Wall Street are poised to reap enormous amounts of the COVID-19 bailout funds for education. Millions of taxpayer dollars going to schools who are under active investigation by the Department Justice.
Dozens of for-profit colleges that are among those most likely to benefit from stimulus funding face thousands of claims from students demanding their money back because they say they were defrauded.
Some of the schools eligible for bailout funds also face federal scrutiny for mismanaged funds, while others have been dubbed “failed” under a federal standard requiring them to provide an education adequate for repaying loans, the analysis shows. Some schools eligible for bailout funds have settled lawsuits with the U.S. Justice Department following allegations of fraud and misuse of federal student aid.
Ben Miller, an education specialist at the liberal think tank Center for American Progress, applied the CARES Act formula to Pell Grant and enrollment data to come up with an estimate of the share of funding available for each of the colleges. He estimates for profit schools will receive $1 billion in stimulus money.
This is incredibly enraging. WE NEED OVERSIGHT.
In an April 6 letter to Education Secretary Betsy DeVos, a group of U.S. senators argued that for-profit colleges should not be eligible for stimulus money. The letter -- sent by Democratic Party senators Elizabeth Warren of Massachusetts, Richard Durbin of Illinois, Sherrod Brown of Ohio and Richard Blumenthal of Connecticut -- demanded “strong accountability policies to support students and protect taxpayers.”
“Colleges like these with a predatory history and thousands of prior students who are still awaiting compensation for deceptive practices should not be getting a federal bailout,” said Bob Shireman, deputy undersecretary of education under President Obama who now oversees higher education programs at The Century Foundation, a liberal think tank.
Betsy DeVos will be fired in January 2021 if she doesn't step down in November 2020.