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Bill to Limit How Much For-Profit Colleges Spend on Marketing from Federal Financial Aid

18 April 2012 427 views One Comment

The federal government is attempting to restrict how for-profit colleges are spending money they’re getting from federal financial aid, including student loans. U.S. Sen. Kay Hagan announced today that she will be introducing a bill in Washington that would put significant restrictions on how they can spend money that comes to them through the Department of Education financial aid programs.

For-profit colleges get the vast majority of their funding — some of them up to 90 percent of their revenue — from federally backed grants, aid and student loans. At the same time, Hagan’s office says for-profit colleges often spend up to 25 percent of their total budgets on massive advertising campaigns and pay admissions counselors commissions on how many students they sign up. Recently, some of those marketing efforts have been found to be misleading or confusing resulting in students who enroll that are not qualified for that school. So, Hagan is proposing that for-profit colleges be prohibited from using any tax dollars to pay for those advertising and marketing efforts.

If passed, the bill could dramatically limit the budget for-profit colleges have available for what Hagan calls deceptive marketing practices. Hagan acknowledged her bill to restrict how for-profit colleges spend federal tuition dollars will likely face tough opposition from the for-profit college lobby. Considering other restriction currnetly in place and the reform in the industry today, this might not be the time to add further legislation.

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One Response to “Bill to Limit How Much For-Profit Colleges Spend on Marketing from Federal Financial Aid”

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