Nessel urges FTC to consider state enforcement efforts while addressing for-profit schools' deceptive earnings claims

Michigan Attorney General Dana Nessel joined a bipartisan coalition of 24 states led by Illinois Attorney General Kwame Raoul in 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. The coalition is 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.

“These marketing practices are used by bad actors looking to deceive those pursuing their dreams of career advancement and higher salaries through higher education.” Nessel said. “The students attending these institutions rely heavily on student loans to pay tuition at schools that can cost up to 4 times more than that of a community college. Graduates leave the school with crippling debt, but little else. I whole-heartedly stand with my colleagues in making it clear to the FTC that state-level oversight of for-profit schools should not be replaced by the Commission’s new rulemaking efforts.”

In comments to the FTC, Nessel 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 attending for-profit schools. Nessel and attorneys general throughout the country have taken 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, the coalition notes their states’ experiences with the misrepresentations that for-profit schools have made regarding the amount, source and adequacy of graduates’ earnings. For instance, Raoul and the coalition submitted a group discharge application to the U.S. Department of Education in April 2021 as a result of ITT Technical Institute (ITT) misrepresenting graduates’ projected annual earnings by up to $100,000. The coalition also points 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.

Joining Nessel and Raoul in the comments are the attorneys general of California, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Iowa, Maine, Maryland, Massachusetts, 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.