• Hagan: Bill restricting how for-profit colleges spend tax dollars gaining momentum

    By: Jim Bradley

    Updated:

    CHARLOTTE, N.C. - A month after introducing a bill in Congress that would restrict how for-profit colleges spend tax dollars, N.C. Sen. Kay Hagan says it's gaining momentum.

    "What this bill does is it tells our for-profit universities and colleges they can no longer use federal taxpayer dollars for marketing, advertising and recruitment," Hagan said.

    Hagan released a list of more than 20 organizations from around the country she says are now supporting her bill.  The list included Consumers Union, which publishes Consumer Reports Magazine.

    Hagan has been critical of the for-profit colleges, saying too many of them use deceptive marketing practices to entice students to take on huge student loans in order to enroll in their programs.  The vast majority of those loans are backed by the federal government.  In fact, a recent study of the top 15 for-profit colleges and universities showed they receive 86 percent of all their revenue from federally backed student loans and then spend nearly 25 percent of that money on advertising, marketing and recruiting.

    Hagan says that money should be going to pay for instruction for students -- not selling the programs.

    Her bill has been criticized by the for-profit college industry which says it could put many smaller colleges out of business. 

    Hagan says she believes the new support for her bill from education and consumer groups is an important step forward in what could be a difficult road to passage in Congress.

    Supporters of the Protecting Financial Aid for Students and Taxpayers Act

    • American Association of Collegiate Registrars and Admissions Counselors
    • American Association of University Professors  
    • Campus Progress 
    • Consumer Action 
    • Consumers Union 
    • Council for Opportunity in Education 
    • Iraq and Afghanistan Veterans of America  
    • Leadership Conference on Civil and Human Rights 
    • Military Officers Association of America  
    • Mississippi Center for Justice 
    • National Consumer Law Center  
    • National Council of La Raza  
    • National Education Association 
    • Public Advocates 
    • Student Veterans of America  
    • The Education Trust 
    • The Institute for College Access & Success 
    • USPirg 
    • United States Student Association  
    • Vets for Common Sense  
    • Vet Jobs

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