College Complaints Unmasked

"The Century Foundation (TCF) has obtained new data from the U.S. Department of Education about nearly 100,000 'borrower defense claims'—applications for loan relief from students who maintain that they have been defrauded or misled by federally approved colleges and universities," the organization wrote in a blog post.

"While the department previously has revealed small amounts of information on borrower defense complaints, including the number of claims that are pending and that have been approved, the government has never before released a comprehensive list of schools accused of predatory behavior.

Now, in response to a Freedom of Information Act (FOIA) request from TCF, the Department of Education has provided information that sorts all 98,868 borrower defense claims received as of August 15, 2017, by school. The data represents the first-ever public record of the number of claims students have filed against each and every higher education institution in the country.

When TCF analyzed the new data, it found a disproportionate concentration of predatory behavior among for-profit colleges. This report summarizes these findings, shedding new light on patterns of predatory behavior, and raising serious concerns about the federal government’s current approach to providing relief to students who have been defrauded and misled.

Key findings in the report include:

  • Out of the total of 98,868 complaints reviewed by TCF, for-profit colleges generated more than 98.6 percent of them (97,506 complaints).  Of these complaints nonprofit colleges generated 0.79 percent (789 complaints) and public colleges generated 0.57 percent (559 complaints).
  • Approximately three-fourths of all claims (76.2 percent) were against schools owned by one for-profit entity, the now-closed Corinthian Colleges (75,343 claims). Removing Corinthian from the analysis, the vast majority of claims, over 94 percent, were still against for-profit colleges (22,160 of the 23,525 non-Corinthian claims).
  • Claims are concentrated around fifty-two entities—forty-seven for-profit companies and five nonprofit institutions—that have each generated twenty or more borrower defense claims. Of these five nonprofits, three converted from for-profit ownership.
  • The backlog of fraud complaints—currently numbering 87,000 not yet reviewed—is increasing, with the number of new claims submitted per month averaging approximately 8,000 since mid-August.

The above findings are all the more striking when considering the underlying differences between for-profit, nonprofit, and public higher education institutions. While for-profit colleges generate 99 of every 100 complaints of student fraud, these schools number far fewer, and enroll far fewer students, than nonprofit and public schools do."

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Publication Date: 12/6/2017

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