The Federal Trade Commission (FTC) warns of “significant financial penalties” for for-profit colleges if they cheat on students.
The Commission announced wednesday that it uses its sanctioning power to impose “significant penalties” on schools that engage in illegal practices and that such practices could result in civil penalties of up to $ 43,792 per violation.
The commission said it informed 70 for-profit higher education institutions that it was “cracking down on any false promises they make regarding their graduates’ job and income prospects and other outcomes and that it would inflict on graduates. violators of significant financial penalties “.
This is the first time the FTC has used the sanctioning power to protect students, the commission said. Complaints to the FTC over education-related issues increased by about 70% between 2018 and 2020.
The FTC targets specific claims by institutions about the percentage of graduates who get jobs in the field they want, whether the school can help its graduates get jobs, and how much money a graduate can expect to earn.
“For too long, unscrupulous for-profit schools have attacked students with impunity, facing no penalty when they defraud their students and push them into debt,” said FTC chairman . Lina khanLina KhanHillicon Valley – Presented by Ericsson – Senators Prepare for Facebook Hearing Hillicon Valley – Presented by Xerox – Democrats Press FTC to Resolve Data Privacy ‘Crisis’ Democrats Call on FTC to Resolve the data privacy “crisis” PLUS said in a statement. “The FTC is resuscitating a dormant authority to deter wrongdoing and hold accountable bad actors who abuse students and taxpayers.”
The Biden administration has aggressively forgiven student loan debt to defrauded students.
At the end of August, the Ministry of Education declared that it approved over $ 9.5 billion in loan receipts. Of that amount, $ 1.5 billion is in borrower defense claims, which are aimed at protecting students who have been defrauded.