Administrative Law Blog Essay

For-Profit Schools’ Predatory Practices and Students of Color: A Mission to Enroll Rather than Educate

In a move with significant implications for federal civil rights enforcement, the Department of Education has halted investigations into several large for-profit institutions widely accused of defrauding students. This decision sends an even clearer message that the Department of Education stands on the side of corrupt corporations rather than with students. Its decision allows these corporations to continue targeting vulnerable individuals without any federal regulatory consequences.

One of the terminated investigations involves Bridgepoint Education, which runs the largely online, for-profit Ashford University. Ashford exemplifies many of the worst abuses of the for-profit college industry, as detailed by a recent lawsuit filed by California’s Attorney General. The lawsuit alleges that Ashford engaged in unlawful business practices under California law, and describes how Ashford University enticed students to enroll with false promises and faulty information.  These misrepresentations allowed Ashford to profit off increased enrollment, but students did not reap the gains. Ashford did not provide the training it promised, oftentimes failing altogether to offer advertised career paths. These deceptive practices left Ashford’s students with overwhelming debt, weak career prospects, valueless degrees, or no degree at all.

Students of color have been hit heaviest by Ashford’s deceptive tactics, a trend that holds true across the for-profit college industry. Like other for-profit colleges, Ashford intentionally targets the most vulnerable segments of the population: racial minorities, low-income students, and students who are first in their family to attend college. Unsurprisingly, therefore, Black and Latino students are overrepresented at Ashford and at for-profit schools generally.  Indeed, while Black and Latino students make up less than one-third of all college students, they represent nearly half of all those attending for-profit institutions. These schools leave students, particularly students of color, with higher levels of debt (96% of students who graduate from a for-profit school leave with debt), default, and economic distress than their peers at public, non-profit schools.  Approximately 70% of African Americans who borrow to attend a for-profit college default on their loans within ten years.  Rather than providing a path towards educational and economic opportunity, for-profit colleges often do the opposite.  Those who graduate from a for-profit college do worse in the labor market than they otherwise would with only a high school education, even though the “credentials they offer tend to be 30 to 40 percent more expensive than the same credentials from a nonprofit public institution.”

Ashford’s numbers are telling in this regard. According to the California AG’s complaint against Ashford, only 16% of Ashford’s students graduate. Nearly 20% of Ashford’s alumni reported being unemployed (approximately five times higher than the national rate). Of Ashford alumni that are employed, nearly half reported that their current occupation was not in an area related to their degree. Added to these feeble job forecasts, the typical Ashford student borrower graduates with $34,375 in federal debt.

These are not numbers to celebrate. Yet, perversely, Ashford University, like other for-profits, manipulatively seeks to rebrand as expanding educational equity for communities of color, the very communities it exploits. In a recently issued a press release, Ashford touts that it confers a high number of degrees on minority students, providing “accessible, quality higher education to minority students.” Nothing could be further from the truth. The press release fails to mention Ashford’s abysmally low rates of graduation and gainful employment, both of which negatively and disproportionately impact students of color. Ashford also fails to mention the predatory practices recounted by California’s lawsuit which include: lying to prospective students about the probability of obtaining jobs, and subsequently saddling them with enormous debt; using illegal debt collection practices when students struggle to pay their bills; and employing admissions counselors who effectively act as “salespeople working in toxic boiler-room conditions.” Ashford’s unscrupulous tactics undoubtedly harm all students, but especially students of color given the school’s intentional racial targeting of minority students and minority students’ greater risk of debt, default, and economic distress.

Unfortunately, Ashford is not alone: many for-profit colleges target minority communities. They prey with the “promise of immediate employment” to individuals whose “family and . . . circumstances require[] it.” Corinthian College is well-known for engaging in a wide variety of abusive practices, from making false statements regarding job placement rates to engaging in unlawful debt collection practices. Corinthian deliberately aimed its deceptive marketing at the Black community. Near the end of its corporate life, Corinthian College spent over $600,000 for just two weeks of advertisements on BET. This racially biased marketing was reflected in student enrollment at Corinthian-owned schools, which were heavily African American and Latino.  For its part, Corinthian College closed after being assessed a $30 million fine that followed a lengthy investigation into its predatory practices.

Like Ashford, other for-profit institutions claim to expand racial equity and opportunity when in fact their students fare worse in terms of graduation, employment, and earnings than their peers at other institutions. For example, in 2011, Ashford and the University of Phoenix “produced more black graduates than any other institues of higher education in the country,” but ultimately left students with “essentially the same grim job prospects as if they had never gone to college, plus a lifetime debt sentence.”

Many for-profit institutions also distort racially charged concepts that carry significance for the African American community. For instance, the Department of Education has promulgated regulations that set forth metrics by which it determines whether a proprietary school’s program prepares students for “gainful employment.”  The regulations are pretty simple: they measure the amount of debt that students are left with as compared to their income. Yet, the for-profit industry has tried to shield itself from this accountability measure by attacking it as “academic redlining”, a highly inflammatory and inaccurate comparison.

For-profit schools have also tried to appeal to the African American community by blurring the distinction between historically black universities, whose mission is to expand educational opportunity for African American students, and for-profit corporations that target prospective students on the basis of race, exploiting systemic inequality for private gain.  By way of example, Arizona Summit Law School, a program in which “only 25 percent of its graduates passed the Arizona bar exam on their first try [in 2016],” has attempted to affiliate with Bethune-Cookman, a historically black university.  Arizona Summit Law School seeks to gain legitimacy from the affiliation, spinning it as “diversifying” the legal profession. But professional diversity is not achieved with Arizona Summit’s notably low bar passage rates. While for-profit schools yield abysmal graduation and employment rates (as discussed above), black students who attend historically black universities are “between 6 percent and 16 percent more likely to graduate within six years than those who attend predominantly white institutions.” For-profits and HBUs have distinctly different historical legacies and track records that should not be confused or conflated.

For-profit schools like Ashford should not be permitted to brand themselves as engines for racial equity while deceiving minority students into incurring crippling debt in exchange for a worthless degree. Our goal should not be access to any institution of higher education, but to meaningful, legitimate programs that equip students with valuable, marketable skills that will translate into long-term wealth and financial success. In an increasingly deregulated environment, it becomes even more imperative that we reject attempts by for-profit colleges to target communities of color for low-quality programs which bring debt rather than a meaningful path towards opportunity and educational attainment.

Toby Merrill is the Director of the Project on Predatory Student Lending and a Clinical Instructor and Lecturer at Harvard Law School.

Brenda Shum is the Director of the Educational Opportunities Project at the Lawyers’ Committee for Civil Rights Under Law.

Eileen Connor is the Litigation Director of the Project on Predatory Student Lending and a Clinical Instructor and Lecturer at Harvard Law School.

Genevieve (Genzie) Bonadies is Counsel in the Educational Opportunities Project at the Lawyers’ Committee for Civil Rights Under Law.

Joshua Rovenger is a Staff Attorney at the Project on Predatory Student Lending at Harvard Law School.