Fed clamps down on for-profit schools

After the Department of Education found ITT Tech wasn't delivering on its promises, the for-profit college chain is the latest forced to close.

Hope you weren't looking forward to your first day of classes at an ITT Technical Institute, because as of today, they're shutting down all their campuses nationwide. The ITT Tech closure's expected to affect at least 35,000 students as well as approximately 8,000 employees, according to the Los Angeles Times.

ITT Tech is the latest for-profit college chain to crumble under increased scrutiny by the U.S. Board of Education, which created a new division in early 2015 to make sure students were getting their money's worth and that their degrees were worthwhile.

According to this piece in The Atlantic, "Last year, thousands of for-profit students applied to have their federal student loans forgiven on the grounds that they were recruited under false (and illegal) pretenses. In December [2015], the Department of Education agreed to forgive $28 million worth of federal loans provided to students who attended the now-defunct Corinthian College. And last month [January, 2016], the Federal Trade Commission and the Department of Education announced that it would take action against DeVry University for deceptive marketing claims.

Federal funding is the primary source of revenue for for-profit colleges, which have faced a barrage of criticism: Some say they offer poor results at high prices and others say they exploit veterans and low-income students. On top of this, for-profit schools' low graduation rates and high loan-default rates have been highly publicized," according to The Atlantic's reporting.

It seems much of the problems stem from the marketing claims many of these schools make about graduates' employment prospects. It seems irresponsible to all but guarantee that you'll land a job or be raking in a hefty salary. So much depends on market conditions and on the students themselves; factors outside the schools' control.

The takeaway here is "caveat emptor" -- buyer beware. If you're trying to finish or continue secondary education, make sure the school you choose has a decent track record and isn't making promises they can't keep, or that seem too good to be true.

Copyright © 2016 IDG Communications, Inc.

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