The Maryland General Assembly passed a bill this week that would regulate the activities of for-profit colleges, a fast-growing sector of higher education that has, until recently, received little attention from state and federal legislators.
Maryland Sen. Paul Pinsky submitted the Maryland legislation following a 2010 undercover investigation by the Government Accountability Office, which found that four for-profit colleges -- including a D.C.-based certificate program -- encouraged “fraudulent practices,” such as advising applicants to falsify financial aid forms in order to qualify for federal aide. All 15 colleges that were tested were reported to have made “deceptive” or “otherwise questionable statements” to the agency’s undercover applicants -- for instance, exaggerating graduation rates and post-graduation salary potential.
Pinsky’s office noted that Iowa Sen. Tom Harkin previously spoke out against a lack of regulation in the for-profit education industry. Congress has not yet acted on the issue.
The bill -- which is on its way to Gov. Martin O'Malley's desk -- would prohibit commissions, incentive payments, and bonuses for student recruitment and require for-profit colleges to notify students if they initiate a program without the Maryland Higher Education Commission’s recommendation. It also establishes a fund that would reimburse students in the case of a breach-of-contract, according to Pinsky’s office.
Lobbyists from well-known for-profits Kaplan and the University of Phoenix challenged particular aspects of the legislation at a hearing last month, but have not objected to the general concept of placing their schools under state regulations, reported the Baltimore Sun last month.
State officials estimate that upwards of 15,000 Maryland students are taking classes at for-profit institutions.
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