For-profit colleges under fire in Illinois

CHICAGO (WLS) -- The ABC7 I-Team is investigating the for-profit college industry, which is under fire. Lawmakers and law enforcers are investigating many of these colleges for offering what they call "worthless degrees" at exorbitant prices.

In Illinois, there are 25 for-profit colleges that government officials are keeping an eye on, investigating and even prosecuting.

Lawmakers and state investigators say students may not be getting what they pay for, and that a high rate of loan defaults could spawn into the next mortgage crisis.

"It's ridiculous for them to be ripping off these children like that," said Tammie D. Jones, who helped her son register at Westwood College in Calumet City. Jamaal enrolled in their criminal justice school for a bachelor's degree.

"I just feel I could make a difference if I was a police officer," Jamaal Jones said.

His cousin Kamilah Dew joined him. They signed contracts for student loans through Westwood - a total of $90,000 each.

"My son, he wanted to be a police officer, he could have been ready to get into an academy. A whole year of his time wasted," Tammie Jones said.

Jamaal and his cousin say they dropped out after finding out the Westwood is being sued by the Illinois attorney general. Lisa Madigan is accusing Westwood of, among other things, falsely convincing students they could get jobs with the Illinois State Police or the FBI. Madigan's suit states these agencies have never employed graduates of Westwood.

"I just wasted six months on credits I'm thinking would transfer over that's not going to transfer over," said Kamilah Dew.

Westwood's spokesperson says the two students signed "enrollment agreements". The documents reveal that "Westwood credits will not transfer to other schools and a degree from Westwood will not be honored for admission to an advanced degree program, except in limited circumstances." Those enrolled in the criminal justice program have to initial this document stating that it is the students' responsibility to find out which law enforcement agencies accept Westwood's degree. And students must initial a document stating they will not sue Westwood.

Westwood is just one of 11 for-profit colleges that the Illinois attorney general has sued or is currently investigating.

Those eleven schools being sued or investigated by the Illinois attorney general are: Westwood College, Inc.; International Academy of Design and Technology; American Intercontinental University; Harrington College of Design; Le Cordon Bleu; Sanford Brown; Everest Colleges; ITT Technical Institutes, EDMC Art Institutes, Brown Mackie Colleges and Argosy University.

The ABC 7 I-Team reached out to all eleven schools. None of the schools have commented.

"They are luring young people into believing this is a snap," Sen. Dick Durbin said.

Durbin points to recent government data, which he says shows that these colleges represent only 10 percent of higher-education students, but more than 40 percent of all student loan defaults.

"They can't stay in school because the debts are growing too fast. They end up with a worthless diploma and can't get a job," Durbin said.

Meanwhile, the for-profit college industry receives more than $25 billion in federal dollars each year.

ABC7's Jason Knowles asks: "If there are all these problems, why is the federal government helping to fund these schools?"

"The federal government accredits these universities, which is just wrong, for-profit colleges and universities. It's our fault, too, we end up putting the taxpayers on the hook," Durbin said.

The I-Team reached out to the Association of Private Sector Colleges and Universities numerous times. They have not returned calls and emails.

There are another 14 schools under federal watch dealing with cash issues, accreditation problems and administrative concerns.

Those 14 schools under federal "heightened cash monitoring" are: International Academy of Design and Technology; American Intercontinental University; Harrington College of Design; Le Cordon Bleu College of Culinary Arts in Chicago; Kendall College; Taylor Business Institute; the Illinois Institute of Art; Vatterott College; ETI School of Skilled Trades; Hairmasters Institute of Cosmetology; Cains Barber College; Westwood College O'Hare; Westwood College DuPage; and Larry's Barber College.

The ABC7 I-Team reached out to all 14 schools. Only one of those schools got back to us. The Taylor Business Institute commented, saying the family-owned school is small and therefore swings back and forth between making a profit and not making a profit. The school will most likely make a profit this year and get off the list. The owner says the benefit of her college is that it's small and personal.

"Ultimately if the schools are going to go bankrupt, the students can walk away from their debt, which means the taxpayers are the ultimate losers. So it's either the students and the families, or the taxpayers," Durbin said.

Durbin has also introduced legislation forcing for-profit schools to put up a "bond guarantee," in case they go bankrupt or shut down.

He and other lawmakers are also demanding that the Department of Education stop giving federal funds to some accused of potential fraud.

HELPFUL LINKS:

Learn how to choose a college, get financial aid, manage loans, loan forgiveness and more at Federal Student Aid page of the U.S. Department of Education.

The National Center for Education Statistics website is the primary federal entity for collecting and analyzing data related to education.

U.S. Senator Dick Durbin (D-IL) joined U.S. Senator Chris Murphy (D-CT), U.S. Senator Elizabeth Warren (D-MA), and U.S. Senator Sherrod Brown (D-OH) in introducing the Students Before Profits Act of 2015, a bill to protect students from deceptive practices and bad actors in the for-profit college sector.