HigherEdWatch.org proposes a compelling solution to the deeply distressing problem of for-profit educational institutions steering students into high-interest private loans they cannot afford when the students actually qualify for cheaper government-subsidized loans. HigherEdWatch.org proposes that Congress put an end to this reprehensible and predatory practice by requiring the exhaustion of federal loans prior to private loan assumption.

HigherEdWatch.org names one for-profit education institution in particular, the Career Education Corporation, which is being sued for misleading students into assuming loans with high, adjustable interest rates and failing to inform them of significantly cheaper subsidized options. A separate 2005 class action lawsuit accused the Career Education Corporation of telling students that they were receiving government-subsidized low interest loans when they were really getting private high-interest loans. The column reports that, according to the Wall Street Journal, private loans constitute 22 percent of the Career Education Corporation’s revenue stream each year.

This kind of egregious practice needs to be stopped immediately. People seeking a better life, and working hard for it, should be protected, nurtured and supported—not exploited. Congress has a chance to act, and it should follow HigherEdWatch.org’s advice in the coming weeks, as the House considers the reauthorization of the Higher Education Act.

But this is just a beginning. In general, lenders should not be able to manipulate students because of the massive power and information differentials that exist between them. This situation underscores the need for aggressive financial literacy programs in high schools, where students can learn about interest rates and credit scores before being bombarded by credit card companies and private lenders.