NYC Launches Campaign to Protect Consumers from Predatory School Scams

By Laurie McGowan, a Fall 2011 intern

The Department of Consumer Affairs and the Mayor’s Office of Adult Education have launched a new campaign aimed at protecting New Yorkers from predatory school scams that encourage many consumers to take on large amounts of school debt for degree programs offering no credible training and fail to prepare students for “gainful employment.”

The citywide Protect Your Money: Know Before You Enroll campaign is a two-pronged approach to raise awareness about the abuses of proprietary schools and for-profit colleges, and provide information on free and low-cost options that offer credible training.

Such awareness efforts include releasing this ad to post on bus shelters, phone kiosks, subway cars, and in major daily and community newspapers all around New York.

“Many young people recognize education as a pathway out of poverty,” said Veronica M. White, executive director of the NYC Center for Economic Opportunity. “The new ‘Know Before You Enroll’ campaign will help New Yorkers find affordable, high-quality training and education programs – and avoid taking on unnecessary debt.”

The initiative is also recruiting volunteer financial and legal experts who can review enrollment contracts and loan applications, as well as offer free help with debt and budgeting.  One way they have facilitated this is through their 311 hotline allowing New Yorkers to call for financial advice or file a complaint.

There has been much criticism behind for-profit colleges for some time now, as their recruiting practices disproportionately target low-income and minority students, women and veterans who are unclear about their post-secondary education options.

Data released by the Department of Education (DOE) earlier this year show that the rate of federal student loan defaults has increased more sharply at for-profit institutions. Not only is the default rate high in for-profit colleges, but tuition is usually higher with a larger portion of students receiving federal loans – representing a little more than 10 percent of all college students but accounting for 44 percent of all student-loan defaults.

These efforts are important as the cost of education is rising and the employment sector slowly recovering. Although the news may be shocking, it is a reality to become aware of amidst turbulent economic times.