As the summer comes to a close, students across Ohio are crisscrossing the state, heading back to campuses and settling into dorms. Set foot on any college quad, and the excitement is palpable—young people excited for their futures, which they hope will be even brighter thanks to higher education.
We know that education is one of the surest paths to economic success. It’s one of the strongest anti-poverty tool we have, and the best leg up into the middle class. It’s why we invest in universities and community colleges and federal student aid, like Pell Grants and Stafford Loans.
But increasingly, for-profit colleges are taking advantage of these financial aid programs designed to help students, and instead are using them to pad their profits.
In 2009, 15 of the largest for-profit education companies received 86 percent of their revenues from federal student aid programs. And they spent almost $4 billion dollars – nearly one-quarter of their budgets – on advertising, marketing, and recruitment. In many cases, that self-promotion was aggressive and deceptive. Because of these misleading marketing campaigns, students looking for a quality college education can find themselves at for-profit institutions that are more concerned with profit margins than career readiness.
This spending on self-promotion by for-profit colleges and universities is gargantuan compared with non-profit colleges, and even compared to other for-profit companies, where marketing budgets typically only represent between four and twelve percent of sales. This practice is a waste of taxpayer money that should be going toward real educational opportunities, not corporate profits, and it needs to end.
That’s why I introduced legislation, the Protecting Financial Aid for Students and Taxpayers Act, to crack down on these predatory practices, and ensure that federal student aid is used for education, not corporate marketing campaigns.
My bill would prohibit all colleges—public, private, and for-profit—from using Pell Grants, federal student loans, and other federal education funds for advertising, marketing, and recruitment. It builds on an existing, bipartisan law that already prohibits schools from using taxpayer funds for lobbying efforts.
This law would particularly help our student veterans and service members, who are often the targets of aggressive and misleading promotion by schools. It would prevent schools from using revenue from the G.I. Bill and other service member tuition benefits to fund marketing. Right now, seven of the eight for-profit education companies that receive the most G.I. Bill funds are under federal investigation for their deceptive recruitment tactics. It is despicable enough that these companies are preying on our servicemembers and veterans—and it’s beyond the pale that they’re doing it with taxpayer funds. It needs to end.
Congress needs to act to ensure that federal student aid and taxpayer dollars are used to educate students, not fund corporate marketing campaigns. This legislation would help ensure that all colleges make learning and instruction a priority.