When a college education is cut short by a school closure or a school engages in fraud, the students and their families suffer long-term financial distress. Higher education fraud, when unaddressed, devastates families and their communities, disproportionately impacting low-income, people of color, and women, who start out economically disadvantaged.
In recent years, several large for-profit school chains, including Corinthian Colleges, ITT Tech, The Art Institutes, and Education Corporation of America, deceived hundreds of thousands of students into taking on enormous debts for worthless educations, and then suddenly closed, leaving financial ruin and trauma for students who attended the schools. Now, as for-profit distance education increases, students who enroll in out-of-state distance education programs are particularly likely to be left in the lurch.
Currently, only 20 states have SPFs and most fail to provide adequate relief to harmed students and many of those should be strengthened to adequately protect student borrowers.