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Feds Create Website for Students at Closing Colleges

Students left befuddled and stranded by college closures will have access to a new online resource meant to connect them with financial aid and academic counselors, said Ted Mitchell, the U.S. under secretary of education, in a call with reporters Monday. The announcement for the portal, NextStepsEdu.org, came two weeks after ITT Tech announced it was shutting down, which forced more than 30,000 students to scramble and decide whether to attempt to transfer or to have their federal loans forgiven. The web portal is a joint effort between the department, the National Association of Student Financial Aid Administrators and Beyond 12, an organization that connects students seeking higher education with resources to help them succeed.

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DeVry University plans to adopt financial reform favored by for-profit critics

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By tackling the controversial 90-10 rule -- and lowering it for its institutions -- DeVry Education Group is looking to assert its place as a leader in the for-profit sector.

Report: For-Profits Are Costly for Black Students

A new study co-authored by researchers at Johns Hopkins University and the State University of New York at Buffalo finds that the streamlined curriculum at for-profit institutions is the reason many poor students -- particularly young African-Americans -- drop out.

The researchers studied 150 low-income black students from Baltimore and found those who attended for-profit institutions ended up in more debt and with fewer job opportunities than they might have had had they attended nonprofit two- or four-year institutions.

"The quick jump into for-profit schools really precludes other options that might be less costly and have a bigger return," said Stefanie DeLuca, an associate professor of sociology at Johns Hopkins and co-author of the report. "These young people are vulnerable to the flashy ads for these schools and lured in by how quickly they could get jobs."

Most of the young people in the study -- 53 percent -- pursued occupational certification at for-profit trade institutions. That certification is offered in fields like cosmetology, computer networking, auto mechanics and phlebotomy. The researchers found that for-profit institutions appealed to these students because of their desire to get to work quickly. These students also received little to no career counseling in high school and so they relied heavily on information heard during TV commercials.

Of the students who enrolled in a for-profit college, 31 percent earned certification by the time the study ended. Those students who chose for-profit colleges collected more debt and their loan default rates were higher than those who attended community colleges.

The study comes on the heels of the collapse of another major for-profit college, ITT Technical Institutes.

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Senate Democrats Ask Education Dept. to Discharge ITT Loans

More than 20 Senate Democrats have signed a letter to U.S. Secretary of Education John King asking the Education Department to support former ITT Technical Institute students by discharging their student loans.

In the letter, the senators asked the department to extend the 120-day window that allows students who withdraw before an institution's closure to receive a discharge. This would accommodate those students who withdrew from ITT Tech after March 1, 2014, prior to the launch of a number of federal and state lawsuits.

The senators also requested that the department stop collections on the loans of recent ITT borrowers who are in default and prevent or retract any negative credit bureau reporting for ITT students eligible for discharge. They also asked the department to apply proposed borrower-defense rule-making provisions related to automatic discharge to ITT students.

"These provisions ensure that borrowers who do not enroll at another school within three years of closure, and who otherwise qualify for a closed school discharge, see their federal debt eliminated even if they do not submit a formal application," says to the letter.

The letter follows on the heels of ITT Tech students launching a debt strike earlier this week to request that their loans be automatically discharged.

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GOP muted in response to for-profit crackdown

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As the Obama administration pushes tougher regulation, the sector is receiving little public backing from traditional allies.

ITT Tech Students Launch Debt Strike

Former ITT Technical Institute students, who learned last week that their campuses would be closing, began a debt strike Wednesday and demanded that the U.S. Department of Education cancel their student loans and close all for-profit colleges.

The strike was organized by The Debt Collective, a group that claims more than 1,000 ITT students have submitted defense-to-repayment applications asking for a closed-school loan discharge.

"We refuse to pay our government-issued student loans. We do not owe them. In fact, you owe us and our fellow ITT borrowers. By striking our debts we begin to collect on your obligation to erase them," the group stated in a letter to U.S. Secretary of Education John B. King Jr. and President Obama.

Meanwhile, ITT Educational Services, the parent company of ITT, says it will cease all operations this Friday. ITT had cut back its operations to about 200 employees from 8,000 following the announcement to close.

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Southern New Hampshire U to Teach-Out ITT-Owned Daniel Webster

Southern New Hampshire University and ITT Educational Services announced a teach-out agreement for Daniel Webster College students on Tuesday.

The online, nonprofit university worked with the U.S. Department of Education and the for-profit ITT to give Daniel Webster's 740 students, staff and faculty a way to continue their programs over the next year. Last week, ITT, which owns the New Hampshire college, announced it was closing all of its campuses.

New Hampshire is a pretty small higher education area where everyone knows everyone, said Paul LeBlanc, president of SNHU, adding that SNHU had looked into buying the college prior to ITT's purchase of it in 2009.

"Students and programs will remain intact and we'll move all employees over to us," he said.

SNHU will honor the current tuition and fees for Daniel Webster students. Following the end of this academic year, the nonprofit university will also accept all Daniel Webster students who meet the minimum admission requirements to continue their coursework through SNHU. Daniel Webster faculty will also continue to teach courses and will be hired by the university.

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CFPB Penalizes Bridgepoint Over Private Loans

The Consumer Financial Protection Bureau has sanctioned Bridgepoint Education, owner of Ashford University, for "deceiving students into taking out private student loans that cost more than advertised," the federal watchdog agency said Monday.

The CFPB ordered Bridgepoint to discharge all outstanding institutional loans made to its students and to refund loan payments made by borrowers -- a total of $23.5 million in payments to 1,277 affected students. The company also must pay an $8 million civil fine. The penalties are among the largest the young agency, which the Obama administration created, has levied in higher education so far.

Beginning in 2009, Bridgepoint offered private loans to its students. The bureau said the publicly traded for-profit deceived students about the total cost of loans by telling them the wrong monthly repayment amount. The CFPB's sanctions include a requirement that Bridgepoint use a newly created financial aid disclosure tool with its students, which includes personalized financial aid information as well student outcomes data such as graduation and loan default rates, potential salaries for graduates and postgraduation budgeting.

In a written statement, Bridgepoint said the CFPB identified only one problem area with the loan program -- that employees of the company may have verbally told students that loans could be paid in installments as low as $25 per month, when the actual payments may have been higher.

"While Bridgepoint maintains that its institutions acted in good faith and provided all appropriate tools and disclosures for the loan programs," the company said, "Bridgepoint chose to negotiate a mutually agreeable resolution in order to move forward and allow its institutions to focus on students."

Pence Weighs In on ITT Tech's Collapse

Mike Pence, the Republican governor of Indiana and Donald Trump's running mate, on Friday called on the federal government to help veterans of the U.S. military who attended the now-closed ITT Tech, Politico reported. Pence wrote to the U.S. Department of Veterans Affairs to ask for the restoration of GI Bill benefits for ITT students.

"Our veterans are being unfairly punished due to lack of flexibility in the Post-9/11 GI Bill, which does not take into account such situations, such as this recent closure, that are of no fault to the students," he wrote. "We cannot allow this to stand."

Also last week, Pence criticized the White House's stance on for-profits. "ITT Tech's situation is due in part to the Obama administration's overregulation, which is sadly killing jobs nationwide," his spokeswoman told the Indianapolis Star.

Directory of Programs to Help ITT Students

The collapse of ITT Tech has many students scrambling for programs and many colleges reaching out to these students. Chegg has created a directory of such colleges, with information about what they are offering ITT students. The database is searchable by state or by proximity to an ITT campus.

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