For anyone who has been following the conflict regarding the financing of higher education, the Consumer Financial Protection Bureau’s recent lawsuit of ITT Technical Institute for predatory lending was considered by many to be a long-awaited step in the right direction.

It had been quite a while since a federal regulatory agency built up a case worthy of filing suit against a powerful private entity. In this case, one of the leading for-profit educational institutions in the United States. Some of the most notable, or depending on your inclination,  infamous for-profit universities today include the University of Phoenix, DeVry University, Everest Institute, and countless others.

Those who take public transportation or watch daytime television have probably been exposed at one point or another to some of the highly misleading advertisements that for-profit universities plaster subway cars with and air during commercial breaks of shows such as Jerry Springer or Divorce Court.

These advertisements usually consist of “success stories” in which a highly enthusiastic minority individual (usually played by a desperate actor or actress) or an actual alumni (who has most likely been paid off by the for-profit university), creates a rags-to-riches narrative.  

The narrative almost always implies that by going to the aforementioned for-profit university, he or she was able achieve all of his or her wildest dreams and get a well-paying, stable job right out of school. It is heavily stressed that anyone can apply and get into the school and that employment is essentially guaranteed upon graduation. “We offer financial aid to those who qualify! All you have to do is get off the couch and call this number, and you’re on your way to a better life!”
What these advertisements do not tell the viewer is that tuition and fees for each program will end up costing about twice as much as it costs to attend a public university, and that most if not all people who attend for-profit universities go into debt in efforts to pay the exorbitant cost of attending.

The advertisements also do not tell the viewers that upon graduation, the overpriced degrees are essentially worthless in an ever competitive job market, and that employers consider graduates from for-profit universities to be incompetent and unqualified compared to those who attend traditional public and private universities.

A study released by the National Bureau of Economic Research revealed that students of for-profit colleges made as much as much as $1800 to $2000 less on an annual basis than students attending other types of institutions. The study also asserts that students of for-profits universities are more likely unemployed six years after enrolling and being unemployed for more than three months.
What is particularly disturbing is that for-profit universities are encouraging and in some cases coercing students to sign up for their financial aid programs that they know the students will be unable to pay back as well as sign up for federal subsidiaries through FAFSA. This way, the for-profit institutions are able to extort their students as well as defraud the federal government out of millions of dollars.
One especially troubling technique that for-profit universities are using is the targeting of veterans who have recently been discharged from the army and are manipulating them into using the federal benefits that they earned for their service to fuel their deception and fraudulent activities. Think about that for a second.Men and women who literally put their lives on the line for the country they vowed to protect are coming home looking to finish their educations, only to be deceived and taken advantage of by corporations who could honestly care less about what they all had to go through to earn their benefits. If that isn’t criminal activity in the purest form, I don’t know what is.

The sad reality is that the victims of this crime are those who can least afford it. All across the nation, students are taking loans from either private institutions or the federal government to pay for a nationwide tuition rate that has sky-rocketed over the past years in both public and private universities.

This in turn is creating another massive bubble, similar to the housing market crisis of 2008, that could explode at any given period if the millions of students who took out the loans are unable to pay them back due to how difficult it has become to find a decent-paying job in this relatively frail economy.

Unless more drastic steps are taken on the part of the federal government to put a stop to the predatory lending that is taking place to finance higher education today, then the mistakes of the past will cruelly repeat themselves.
That is why the recent lawsuit filed by the Consumer Financial Protection Bureau against ITT Tech is being viewed as a landmark achievement in the fight against bad lending practices in the student loan industry. While this may appear to be a sizable victory, it does not close the book on this dark chapter in American higher education.

Across the country, there are thousands of campuses under the ownership of the for-profit universities that are continuing to prey on defenseless students. If the government as a whole is unable to consistently keep the private sector in check, then it is up to the public to let the corporations know that they will not be intimidated this time around, not with millions of futures at stake.

The best thing people can do to combat these lenders is to become aware of their predatory tactics and be informed to the best of their ability when it comes to investing in their educations.

Currently, the Consumer Financial Protection Bureau has a website called http://www.consumerfinance.gov/students/ in which they have provided an interactive and well-organized guide to understanding the student loan crisis as well as some of the most important things to consider when financing one’s education.

Students should be better educated about the importance, usefulness, and potential perils of student loans and student debt. Hopefully, by being well-informed about this certain economic issue, we can all go on to learn the importance of responsible personal finance and equip ourselves with the ability to make sound decisions regarding our finances.

Perhaps then we can finally put an end to the predatory lending that has plagued our nation for far too long.