- Sen. Dick Durbin slammed the for-profit education industry in remembrance of ITT Tech's shut down six years ago.
- He urged Biden to use "immense" enforcement action to hold bad actors in the industry accountable.
- Some for-profits have been under fire for misleading students into taking on debt they can't afford.
It's been six years since one of the most controversial for-profit schools shut down amidst allegations of misleading students, and a top Senator wants to make sure other people seeking degrees do not continue suffering similar consequences.
On Wednesday, Senate Majority Whip Dick Durbin took to the Senate floor to highlight the closure of ITT Technical Institutes in 2016, and the alleged fraudulent history that accompanied the closure. As one of the largest for-profit chains, Durbin detailed how ITT Tech "collapsed in a cloud of scandal," including accusations that students were misled into taking on loans they could not pay off, and while the chain's shareholders profited, "students ended up holding the bag with worthless diplomas and a mountain of student debt, whether they finished or not."
Now, Durbin said, President Joe Biden needs to do everything in his power to ensure that cannot happen again.
"There are other ITT Techs out there," Durbin said. "For the sake of students and taxpayers, the Education Department under this Administration must begin to use its immense enforcement authority to protect them from swindlers and con-men."
Over past years, a number of for-profit schools have come under fire over accusations of misleading students, using aggressive recruitment tactics, and misrepresenting student-loan costs and employment after graduation. In an attempt to remedy the harm those school closures have caused students, former President Barack Obama implemented the borrower defense to repayment, intended to forgive student debt for defrauded students.
But under former President Donald Trump, the Education Department ran up a huge backlog of claims, leaving many borrowers waiting for the relief they were promised. And not only that — taxpayers often had to foot the costs of forgiveness for the students of defunct schools while the executives running the institutions got off largely unscathed.
That's why Durbin, and a number of his Democratic colleagues, have called on Biden to crack down on the for-profit education industry and hold its executives accountable for bad behavior. In August, House Education Chair Bobby Scott urged the Education Department to hold the executives of defunct for-profit colleges personally liable for money owed to the federal government, and during a November hearing, Federal Student Aid head Richard Cordray told Scott that he "absolutely agrees" with that notion.
"We see eye to eye on this," Cordray said. "We absolutely agree. More needs to be done to prevent people from abusing these student aid programs, from cheating taxpayers, from cheating students."
However, while the department recently announced steps to protect taxpayers from school closure costs, it still did not hold the individual executives personally liable. A spokesperson told Insider at the time that there are some limitations under the Higher Education Act when it comes to individual liability, but the department can hold executives personally accountable in certain circumstances.
Still, the department has worked to remedy the backlog of borrower defense claims, most recently forgiving $415 million in student debt for 16,000 defrauded borrowers. And the Consumer Financial Protection Bureau has strengthened its oversight of schools that might be engaging in misleading behavior surrounding student-loans, but as Durbin said, enforcement must strengthen to protect students seeking a higher education.