Proposed Legislation Would Prohibit Use of Federal Student Aid Dollars for Recruiting, Marketing
Senate Democrats introduced legislation yesterday that would limit how postsecondary institutions use the funding they receive from federal student aid programs. The "Protecting Financial Aid for Students and Taxpayers Act" would prohibit the use of Pell Grants, federal student loans, military education benefits and other forms of federal student aid by postsecondary institutions for advertising, marketing and recruitment practices.
While the majority of colleges and universities devote a small percentage of their revenue to advertising, marketing and recruiting, Sens. Kay Hagan (D-NC) and Tom Harkin (D-IA) said the proposal would help address concerns about allegations of deceptive recruiting practices at for-profit institutions.
"In these tough economic times, we need to protect taxpayers' investment of billions of dollars in student financial aid by ensuring that it is used to help students succeed in college, not on out-of-control advertising, marketing and recruitment budgets," Sen. Hagan, a member of the Health, Education, Labor and Pensions (HELP) Committee, said. "I am especially troubled by the tactics some for-profits have employed in targeting active duty servicemen and women and their families.”
In an analysis of Department of Veterans Affairs (VA) data, the Senate HELP committee released a report last year showing that of the $4.4 billion in VA higher education benefits disbursed to 5,985 institutions in the 2010-11 academic year, more than 37 percent went to for-profit education companies. The HELP Committee found that several colleges with high dropout rates and low graduation rates devoted as much as 30 percent of their revenue to advertising, marketing and recruiting.
"Today we are sending a strong message to colleges that choose to spend federal dollars on advertising at a time that middle class students and families are struggling to get ahead: find the money for marketing elsewhere, not from taxpayers,” HELP Committee Chairman Sen. Harkin said. "Our Committee's investigation revealed a staggering amount of money is being spent on advertising and recruiting from for-profit colleges that fail their students."
Sen. Harkin also introduced legislation last month that would require education counseling services for every veteran eligible for education assistance from the Department of Veterans Affairs (VA). In addition to providing comprehensive educational counseling to all veterans eligible for educational benefits, the GI Educational Freedom Act of 2012 would establish a tracking system at the VA for veterans to report instances of waste, fraud and abuse at their schools to ensure veterans are receiving quality education.