June 11, 2024 | WASHINGTON, D.C. — Tonight, a key committee in the House of Representatives rejected an effort to attach the Bipartisan Workforce Pell Act to must-pass legislation authorizing the U.S. military. The proposal would have opened up the Pell Grant program to extra-short-term workforce training programs—as short as eight weeks long. It would also endanger the Pell Grant program and give the green light to some of the most shady and predatory for-profit schools and entirely online programs offered by private-sector tech companies to pad their bottom lines.
The stand-alone bill was pulled from the House Floor in February amid warnings by advocates, including Student Borrower Protection Center (SBPC), as well as members of Congress who sounded the alarm on the dangers posed by allowing for-profits and entirely online programs to cannibalize already limited Pell dollars. They also raised major concerns about the bill’s pay-for, which would jeopardize access to Public Service Loan Forgiveness Program (PSLF) and limit the benefits of the Biden Administration’s new Saving on a Valuable Education (SAVE) repayment plan.
Rather than securing enough support to pass this legislation by addressing these serious concerns, Rep. Elise Stefanik (R-NY) and Rep. Bobby Scott (D-VA) sought to advance this proposal as an amendment to legislation reauthorizing the National Defense Authorization Act. Tonight, the House Committee on Rules rejected this amendment, ending Stefanik and Scott’s latest effort to shepherd this unpopular policy into law.
In response, Student Borrower Protection Center (SBPC) Policy Director Aissa Canchola Bañez issued the following statement:
“Tonight, lawmakers again rejected a back-door effort to allow shady private companies to loot the Pell Grant program, paid for by undermining loan relief for aspiring teachers, nurses and members of the military. Only in Washington would anyone think it was a good idea to use bipartisan legislation intended to support our troops as a vehicle to bankroll some of the same programs and institutions that have left our servicemembers and veterans with useless degrees and saddled with debt. This effort was clumsy and shortsighted and we are glad to see it go down in defeat.”
Background
Yesterday, SBPC released a blog shedding light on the dangers of Congress’s recent effort to further expand the Pell Grant Program to cover extra-short workforce training programs— particularly those at for-profit and entirely online programs. The blog also covers the ways that the updated bill could jeopardize the PSLF program and hinder President Biden’s efforts to support struggling student loan borrowers with the SAVE plan.
SBPC has written at length on the dangers of the shady for-profit college industry and the growth of online EdTech companies known as Online Program Managers (OPMs). OPMs are for-profit companies that purport to help colleges expand their online course offerings. A growing body of evidence shows that OPMs use deceptive marketing and lofty, frequently hollow promises to drive students into massive debt for low-quality educational programs.
In 2021, SBPC unveiled findings from an investigation that showed troubling partnerships between universities and OPMs offering short-term, non-degree granting credential programs referred to as “bootcamps” driving students into the risky shadow student debt market. These bootcamps are generally targeted toward students who are older or who have already entered other careers, and they regularly make lofty promises of high-paying jobs in the technology industry upon graduation.
Last year, the Government Accountability Office released a report revealing the U.S. Department of Education is failing to meaningfully supervise the OPM industry despite clear warning signs of student harm. In response, SBPC, in partnership with the Century Foundation, urged the Consumer Financial Protection Bureau to step in to protect students.
Most recently, as one of the largest players in the EdTech space, 2U, teeters on economic collapse, SBPC sounded alarms about the need for federal policymakers to have a plan in place to protect students if the company collapses.
Further Reading
SBPC investigation on troubling partnerships between universities and OPMs to saddle students with dangerous student debt: Student Borrower Protection Center Investigation Uncovers that Public Colleges and Universities are Partnering with Unaccountable Contractors to Saddle Students with Dangerous “Shadow Student Debt”
SBPC blog on the need for holding OPMs accountable: With ED Asleep at the Wheel, the CFPB Must Protect Students from Out-of-Control Online Program Managers
Op-ed by SBPC Executive Director Mike Pierce on the risks of increased dependence on EdTech in higher education and workforce training: Government must act fast to protect students and colleges from Silicon Valley’s economic threat
SBPC blog on the need for federal education and consumer protection officials to take action to protect students as one of the largest OPMs heads towards a looming collapse: Students Should Not Bear the Financial Burden when Corporate Greed Shatters the Online Higher Education Market
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.