The signs were there early on that Career Education Corp. was bad news for its students.
The Schaumburg-based for-profit college chain — the nation’s fourth largest, with 83 campuses at its peak — spent years racking up profits by luring in students ready to take out thousands in student loans after hearing rosy tales about their future job prospects.
Once those students graduated, sometimes from programs that were not accredited, they couldn’t find jobs and couldn’t pay back their loans.
All the while, top CEC executives were earning millions in compensation every year.
EDITORIAL
Plain and simple, CEC’s profits were earned on lies, at student and taxpayer expense.
The story is in a damning Senate report that led 48 state attorneys general, including Illinois’ Lisa Madigan, to investigate and eventually sue the for-profit chain in 2014. In a settlement announced Friday, CEC agreed to write off nearly $500 million in student loan debt, including $48 million in Illinois. More than 178,000 borrowers will have their loans written off.
It’s crystal-clear that for-profit colleges need more scrutiny and regulation, not less.
As Sen. Dick Durbin wrote to us Friday in an email, “While Education Secretary Betsy DeVos continues to coddle for-profit colleges, students are being buried in debt and taxpayers end up holding the bag.” For-profit colleges account for 34 percent of federal student loan defaults but enroll just 9 percent of college students, according to Durbin’s office.
In late December, Durbin began hammering at DeVos about another for-profit chain, Missouri-based Vatterott Educational Centers Inc.
Vatterott, after years of financial problems, had just shut down its five campuses, including one in downstate Quincy. More than 150 students in Illinois, and 2,300 across the country, were affected. In a letter to DeVos, Durbin asked for loan discharges and other help for those students.
Meanwhile, financial problems forced the 70-campus Education Corporation of America to abruptly close in December. It was the biggest shutdown in the for-profit college industry since DeVos took office, and it happened even though DeVos tried to save the chain with a last-minute reprieve involving its accreditation.
So much for her coddling. Junk is junk.
Maybe that’s the bright spot here.
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