There's a new plan in Washington to 'get Wall Street out of education'

Three members of congress introduced legislation last week to counter purported abuses by for-profit colleges against vulnerable students.

"We need to get Wall Street out of education," said Rep. Mark Takano (D-California) at a press conference on the bill he's co-sponsoring, the Protections and Regulations for Our Students Act, also known as the PRO Students Act.

Takano - a former high school teacher and a community college trustee - was likely referring to the fact that many for-profit colleges are publicly traded and might be more interested in investors than students.

At the press conference last week, Takano continued on to lambast the for-profit sector for supposedly leaving students with unsustainable debt, worthless credits, and dismal job prospects. He noted that "72% of for-profit programs produce graduates who earn less on average than high school dropouts."

Michael Adorno, a so-called student debt striker from the Corinthian 100 spoke at the press conference to share his personal story about alleged manipulation at the hands of for-profit Everest College. He said he learned network administration on outdated software and now can't find a job due to recruiters' intimate knowledge of Everest's program.

According to Takano, the Pro Student Act will, among other things:

• Require proprietary institutions to derive at least 15% of their revenue from non-federal student aid and ensure that military and veterans' education benefits are included in that calculation.
• Prohibit schools from using revenues derived from federal student aid for recruiting and marketing.
• Launch a complaint tracking system for students to report grievances.
• Establish a Proprietary Education Oversight Coordination Committee and create a framework for targeting and prioritizing program reviews by the Department of Education.
• Strengthen sanctions for violations, establish a Student Relief Fund, and bolster consumer protections for students.
• Improve the quality of and access to key information, such as the student default risk index, cohort default rates, loan repayment rates, degree completion rates, and accreditation documents.
• Prohibit incentive compensation based on recruitment or academic success.

The legislation follows months, if not years, of complaints against the entire for-profit industry, which has been under fire for its alleged focus on signing up students and depositing their federal financial aid checks rather than providing a quality education.

The for-profit industry gained even more notoriety on Sunday with Corinthian Colleges, a massive for-profit college network, closing its remaining campuses for good after being investigated by state attorneys general and the Department of Education.

For its part, Corinthian has previously told Business Insider in a statement that it believes "career colleges like Corinthian play an important role in the US education system and serve a need that would otherwise be unmet."

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