February 27, 2024 | WASHINGTON, D.C. — This week, the House of Representatives is expected to vote on an updated version of the Bipartisan Workforce Pell Act, H.R. 6585. The proposal would open up the Pell Grant program to extra-short-term workforce training programs—as short as 8 weeks long. It will 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 bill advanced out of the Committee on Education and Workforce late last year by a vote of 37-8 despite warnings by advocates, including the SBPC, as well as members of Congress sounding the alarm on the dangers posed by allowing for-profits and entirely online programs to cannibalize already limited Pell dollars. They also raised major equity concerns about the bill’s original pay-for, which would have cut off federal student loan access to low-and-middle-income students hoping to attend ultra-wealthy schools that are subject to the endowment tax.
Despite these problems, the bill’s architects are now rushing the bill to the House floor where the bill will be considered under “suspension of the rules”—a fast-track process that provides only limited debate time and prohibits any and all amendments. This time, the bill sponsors have included a new pay-for with many of the same major equity ramifications as the original bill and could even jeopardize the spirit of the Public Service Loan Forgiveness Program (PSLF) and the benefits of the Biden Administration’s new Saving on a Valuable Education (SAVE) repayment plan.
In response, Student Borrower Protection Center (SBPC) Executive Director, Mike Pierce issued the following statement:
“Let me be clear, this bill is a gift from the heavens for shady for-profit colleges and private sector tech companies that have been praying for the chance to cash in on Pell dollars in order to stay afloat. These are many of the same institutions and programs that have historically deployed predatory and deceptive practices, including aggressive recruiting and poor-quality training programs that leave students with poverty-level wages and mountains of debt.
“Despite news that the immediate financial stability of the Pell Grant Program is in grave danger, the House is now poised to pass a bill that will only exacerbate this funding crisis and could lead to future cuts that will make college more expensive and make the student loan debt crisis even worse for low-income students and families.
“It is incredibly troubling to see the architects of this bill simply swap one harmful pay-for for another—this time forcing ultra-wealthy colleges to reimburse the government for unpaid student loan balances, including interest waived and balances cancelled under PSLF and IDR plans. This bill is a backdoor attack on the promise of PSLF and threatens to roll back important progress the Biden Administration has made to help borrowers better manage their student loan debt with the SAVE plan. We urge members of Congress to pump the breaks and vote no on H.R. 6585 before it is too late.”
Background
Today, SBPC also 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.