• Consumer Protection

    Federal Policy Priorities

    • Strengthen the Department of Education’s delivery of quality service through the Direct Loan Program process, especially with regard to adequate and timely loan information, early outreach to delinquent borrowers and more accommodating recovery efforts for borrowers in default (See the Federal aid-loan programs section).
    • Support integrity in federal student financial aid programs and strengthen the original intent of the “90/10 Rule.” This can be done by including all federal sources of income in the 90 percent calculation.
    • Encourage and support federal loan program policies that discourage institutional manipulation of students and loan program data in order to hide fraud and abuse. An example of this manipulation is placing students in deferment solely in order to improve an institution’s Cohort Default Rate in order to remain eligible to participate in federal student aid programs. 
    • Encourage federal recognition of reporting structures that provide transparent and comparable consumer information through voluntary means, such as the Voluntary System of Accountability.
    • Support revising the bankruptcy code to permit the discharge of private educational loans in bankruptcy proceedings to provide greater protection to borrowers faced with unmanageable student loan debt burden.

    State policy Priorities

    • Encourage state oversight over all postsecondary institutions to ensure adequate student-consumer protection and prevent fraud and abuse of student and public resources
    • Adopt more uniform policies for state authorization of distance education programs

    Summary

    The ever-growing and diversifying U.S. higher education marketplace holds great promise in providing students with an array of college options that can best serve their educational needs and foster their career aspirations. Unfortunately, the informational imbalance between institutions and consumers has left some students susceptible to false and misleading claims through unscrupulous practices on the part of some colleges. In recent years, the expansion of higher education providers has been accompanied by troubling allegations of widespread consumer fraud and abuse, which has led to the prosecution of several postsecondary providers in many states. The shared regulatory triad consisting of the states, federal government and accrediting bodies has failed in many instances to provide meaningful consumer protection, resulting in harmful consequences for students and taxpayers.

    AASCU supports a robust consumer protection framework for higher education that empowers students with useful, accurate data to make an informed choice about postsecondary education. The association encourages states and the federal government to pursue and prosecute educational providers that engage in fraudulent and abusive activity. Further, AASCU supports pragmatic rules in federal student aid programs that work to protect students, parents and taxpayers.

    The regulation of distance education is of growing significance as online education providers increasingly work across state lines. Complexity, confusion and costs of compliance would be reduced through greater commonality in state compliance or if institutions only had to comply with the rules of a single jurisdiction recognized by all states. Abuses in the delivery of distance education require a clear, understandable state grievance process for students. In addition, quality assurance mechanisms need to be in place to ensure that students are receiving value for their investment.

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POLICY & ADVOCACY