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States seek limits on US funds to for-profit colleges

Attorneys general from more than a dozen states, including Massachusetts, are pushing Congress to restrict federal funding to for-profit colleges, which face growing complaints that they often leave students with piles of debt but not enough training to find high-paying jobs.

Specifically, the 14 attorneys generals urged congressional leaders in a letter last week to pass legislation that would bar institutions from using money from federal grants or student loans to market their programs and recruit students.

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“This bill will ensure that scarce federal education dollars are used to educate students rather than to finance marketing campaigns and recruitment operations at schools more focused on making a profit than assisting students,” said Attorney General Martha Coakley of Massachusetts in a statement.

The bill, called the Protecting Financial Aid for Students and Taxpayers Act, is sponsored by Senators Kay R. Hagan of North Carolina and Tom Harkin of Iowa, both Democrats. A similar measure in the last Congress made it out of committee but was not voted on by the full Senate.

The letter is the latest effort by states to crack down on for-profit colleges, which focus on preparing students for careers in everything from cooking to computers. Thirty-two states, including Massachusetts, have joined a group led by Kentucky Attorney General Jack Conway investigating the industry.

Coakley has demanded information from more than a dozen for-profit schools operating in Massachusetts.

In their letter, the attorneys general asserted that for-profit schools spent $3.7 billion, or nearly one-fourth, of their budgets in 2009 on marketing and recruitment “which was often very aggressive and deceptive.” By comparison, nonprofit colleges spent less than 1 percent of their revenue on marketing.

In addition, the letter complained that more than half the students who took classes offered by major for-profit chains left without a degree and for-profit college students account for nearly half of all borrowers who default on their student loans. Critics say for-profit schools typically charge more than comparable public and nonprofit institutions, leaving students deeper in debt.

“Federal taxpayers should not be asked to foot the bill for aggressive recruiting and deceptive sales tactics of colleges that have placed profits ahead of ensuring student success,” the letter says. There are an estimated 3,000 for-profit schools nationwide, including at least 136 in Massachusetts.

But the letter does not single out any specific school or chain for criticism. A trade group representing for-profit schools has repeatedly defended their record, noting they help train millions of Americans for careers. For-profit schools say they are particularly key for nontraditional students, such working adults who aren’t able to attend more traditional nonprofit and public colleges because of their busy schedules.

And they say restrictions on marketing will limit their ability to reach potential students who could benefit from the course work.

“Advertising can shine a light on available opportunities for all citizens and should be encouraged rather than restricted,” said Steve Gunderson, president of the Association of Private Sector Colleges and Universities. “What this legislation does is limit information, and by doing so it limits access.’’

Todd Wallack can be reached at twallack@globe.com. Follow him on Twitter @twallack.
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