RAOUL URGES FEDERAL TRADE COMMISSION TO CONSIDER STATE ENFORCEMENT EFFORTS DURING RULEMAKING TO ADDRESS FOR-PROFIT SCHOOLS’ DECEPTIVE EARNINGS CLAIMS
Chicago — Attorney General Kwame Raoul today led a bipartisan coalition of 24 states urging the Federal Trade Commission (FTC) to consider the action states have taken to address misrepresentations made by for-profit colleges and universities during its rulemaking process related to schools’ deceptive earnings claims. In March, the FTC issued a request for comments regarding deceptive or unfair earnings claims made by a broad range of businesses, including for-profit schools. Raoul and the coalition are calling on the FTC to take into account misrepresentations schools have made with respect to their graduates’ earnings as the agency considers proposing rules governing the broad use of such earnings claims.
“Students are the ones who suffer the consequences when for-profit colleges and universities make deceptive claims about graduates’ earnings and post-graduate success,” Raoul said. “Illinois and states around the country have been acting to hold for-profit schools accountable for misleading students, and we are urging the FTC to take states’ enforcement experiences into account as it decides how to evaluate earnings claims schools can make.”
In comments to the FTC, Attorney General Raoul and the coalition highlight the negative impact of for-profit schools’ misrepresentations, particularly on communities of color. The attorneys general also emphasize the outsized harm student loan debt can have on students of for-profit schools. Attorney General Raoul and attorneys general throughout the country have taken extensive actions in response to misrepresentations made by for-profit schools, which often promise graduates lucrative jobs in sought-after career fields. Unfortunately, these representations often prove to be false, and deceived students can be left with loans that can follow them for the rest of their lives.
In the comments, Raoul and the coalition note states’ experiences with misrepresentations for-profit schools have made regarding the amount, source and adequacy of graduates’ earnings. For instance, Attorney General Raoul and other attorneys general submitted a group discharge application to the U.S. Department of Education in April 2021 as a result of ITT Technical Institute (ITT) misrepresenting the amount of graduates’ projected annual earnings by up to $100,000. Attorney General Raoul and the coalition also point to a 2015 settlement with Westwood College that resolved allegations Westwood misrepresented the ability of criminal justice students in Illinois to be employed as police officers in Illinois. Finally, the coalition notes with concern the inability of some graduates to earn sufficient income to repay the student loans they had to take out to attend for-profit schools.
The Illinois Attorney General’s office has long been a national leader in investigating and enforcing consumer protection violations in the higher education field. Since entering office, Attorney General Raoul has secured over $160 million in relief for Illinois borrowers who were deceived by their school, private lender, or servicer. Earlier this year, Raoul’s office announced a $1.85 billion national settlement with Navient, formerly the nation’s second largest student loan servicer. Last year, Attorney General Raoul’s office initiated and worked to pass “Know Before You Owe,” to alert borrowers of their remaining federal student loan eligibility to help them steer clear of predatory private loans. Raoul has also overseen the rollout of the state’s first Student Loan Ombudsman, a position created by the Student Loan Servicing Rights Act, to provide resources for student borrowers who are struggling to make student loan payments.
Joining Attorney General Raoul in the comments are the attorneys general of California, Colorado, Connecticut, Delaware, Hawaii, Idaho, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and Wisconsin, as well as the Hawaii Office of Consumer Protection.
Student borrowers who have questions or are in need of can call the Attorney General’s Student Loan Helpline at 1-800-455-2456. Borrowers can file complaints against their student loan servicer at the Illinois Attorney General’s website.