“Your Results May Vary”: Protecting Students and Taxpayers Through Tighter Regulation of Proprietary School Representations
This article argues for stricter regulation of proprietary (for-profit) school marketing and recruitment practices and proffers specific proposals for effectuating this regulation. Specifically, colleges that promote future employment and financial benefits in order to induce enrollment should be subject to heightened disclosure requirements. Akin to the “triad” that monitors institutions’ Title IV financial aid eligibility, federal, state, and non-governmental entities should monitor disclosures. The goal of such oversight would be to prevent misrepresentations from being made to prospective students.
Proprietary schools play an important role in broadening access to higher education. They enroll a large number of students who are underserved by traditional, non-profit institutions. These students tend to be poorer, less educated, and older than students at traditional schools, and they tend to undertake higher education for very practical reasons—most often to earn a degree that will soon result in a well-paying job. These characteristics make them particularly susceptible to deceptive marketing and unfounded promises of higher education providers. Moreover, these students often lack the social clout and political sophistication necessary to foster widespread dismay regarding their victimization. They are less likely to even complain about fraud perpetrated against them by proprietary schools. And even for those who do complain, current legal and regulatory processes provide few options for redress.
Unscrupulous marketing and recruitment practices by proprietary schools contribute to low completion rates and high loan default rates among proprietary school students. The costs of higher education failure are high; therefore, the costs of higher education misrepresentations are high. And in addition to the victims, the taxpayers are often saddled with these costs, which run in the billions of dollars. As a result, effective oversight of higher education marketing and recruitment would not only protect individual students, but also contribute to the country’s fiscal health.
The proposals presented in the article have a singular focus: to reduce, if not prevent, incidences of misrepresentations made by proprietary schools in order to induce enrollment. The proposals are organized around two areas of focus: proprietary school marketing and recruitment. In the area of marketing, proprietary schools should be required to place disclaimers on ads that promote future benefits. Also, the Federal Trade Commission should expand its regulation of proprietary school marketing practices and encourage impartial self-regulation within the industry. In the area of recruitment, proprietary schools should be required to make affirmative and expanded disclosures. The goal of these reforms would be to foster disincentives to misrepresentations and fraud. It must be noted that while the specific focus of this article is proprietary schools, the proposals could apply to any school that makes forward-looking representations in inducing enrollment. In the end, the message should be that while educational attainment can, and often does, yield benefits upon the possessor, these benefits are not assured—and because of this, “Your Results May Vary.”