New Jersey Citizen Action Examines For-Profit Schools And Student Debt Crisis

NJBIZ — December 20, 2019

By David Hutter

Nonprofit organization New Jersey Citizen Action released a report Wednesday on the impact for-profit colleges have on New Jersey's $43.2 billion student loan debt crisis, and what actions New Jersey can take to help loan borrowers and its students.

Beverly Brown Ruggia, financial justice organizer of New Jersey Citizen Action, objects to high interest rates and said college tuition is too expensive. She said her organization works on behalf of New Jersey college students in terms of financial matters involving loans to pay for colleges. "States need to reinvest in public education," she said. "We are protecting students who have debt because they are being forced to pay more than they should. We cannot tolerate that."

Ruggia believes the state really did a couple of good things so far. "The state took care of making repayment more feasible for students to restructure their loans. ... The Legislature also passed a bill to require all loan servicers to be licensed by the Department of Banking and Insurance."

"We need to make sure paying back debt is fair," she said. "The ultimate goal is to bring down the cost of higher education, and we support these efforts."

New Jersey Citizen Action is an advocacy and social service organization that fights for social, racial, and economic justice for all while also meeting the pressing needs of low- and moderate-income New Jerseyans through education and direct service.

"Students Before Profits: Regulating For-Profit Post-Secondary Schools and Programs in New Jersey" states that student loan borrowers who have attended for-profit schools incur extremely high levels of debt and are far more likely to default on their loans than their counterparts from nonprofit and public institutions. Aggressive marketing toward vulnerable populations, fraudulent practices, and high tuition and costs associated with the schools account for this destructive level of indebtedness, as does the rollback of numerous federal protections for students under the Trump administration, the group said.

The study charges that for-profit colleges use aggressive and sometimes fraudulent recruitment tactics and spend more on marketing and advertising than on their education programs; cost much more than public institutions; provide credits not transferable to other schools; enroll students who take on more debt than their counterparts attending nonprofit colleges; and close suddenly, leaving students with debt but unable to complete their education.

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