During testimony delivered at a hearing conducted by the Senate Health, Education, Labor and Pensions Committee this week, Wade Henderson, president and CEO of the Leadership Conference on Civil and Human Rights, compared the debt incurred by students at for-profit colleges and universities to the predatory lending that took place during the housing boom. For-profits have been under fire for the past couple of months by lawmakers and education experts and activists who argue that too many students leave or graduate from the institutions burdened by crippling debt.
Henderson said that the institutions enroll disproportionate numbers of women, minorities, low-income students, veterans and older Americans. About 57 percent of students who attend for-profit colleges are minorities, according to the Education Department.
“The Leadership Conference recognizes the vital role that post-secondary education of all types, including in for-profit settings, can play in educating and preparing young people for jobs and careers of today and tomorrow,” he said. “However, we are alarmed by the mounting evidence that the for-profit sector is engaging in what I would call predatory lending practices—overcharging for their product, failing to deliver on programs leading to gainful employment, leaving large numbers of students saddled with enormous debt and leaving taxpayers holding the bag.”
Last week the Education Department finalized its controversial “gainful employment rule,” which will strip federal financial aid from vocational programs that allow students to take on more debt than they can realistically repay and goes into effect in July 2012. African-American lawmakers and other advocates are divided on the issue.
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