Five months after a Whistleblower 9 investigation uncovered allegations of deceptive practices by a Charlotte for-profit college, there's a major push to change the way for-profit colleges do business.
Wednesday morning in Washington, D.C., U.S. Sen. Kay Hagan announced she is introducing a bill that would prohibit colleges and universities from using federal tax dollars to pay for advertising, marketing and recruiting. It is a move that could have a significant impact on for-profit colleges.
Hagan pointed to charts showing that the top 15 for-profit colleges in the country get 86 percent of their revenue from federally backed student loans. In addition, those same colleges spent 23 percent of their budgets on advertising, marketing and recruiting of students. Hagan called the practices of some colleges "deceptive."
"Today we are sending a strong message to colleges that choose to spend federal dollars on advertising at a time that middle class students and families are struggling to get ahead: find the money for marketing elsewhere," Hagan said.
The for-profit college industry is expected to lobby extensively against the bill. Jack Henderson, who owns Charlotte's Brookstone College, said the bill is unfair.
"It's clearly an attempt by some policy makers to try to put the private sector colleges and universities out of business. If we can't tell people who we are and what we do, how are we going to get students?" he said.
In November, Eyewitness News talked to more than a dozen students in the Dental Assistant Program at Kaplan College in Charlotte. They claimed Kaplan admissions counselors told them the Dental Assistant Program was accredited or soon would be. Kaplan later acknowledged it had never applied for accreditation for the Dental Assistant Program. Kaplan also agreed to refund tuition and pay stipends to all students in that program and has surrendered its license to operate the Dental Assistant Program in Charlotte.
Wednesday, a spokesman for Kaplan declined to say what percentage of the college's revenue is spent on advertising, marketing and recruiting.
Hagan said her bill is aimed at getting better use from the federal dollars going to for-profit colleges.
"This, to me, is a common sense bill," she said. "American taxpayers cannot afford to subsidize massive advertising and marketing machines. Our students deserve more."