For-profit colleges under probe

When Murray Hastie returned to New York in January 2006 after two tours of duty in Iraq, he hoped to use the GI Bill to complete his college education.

Denied admission to two state colleges, Hastie came upon DeVry University. The day after he filled out an online request for information, a representative from the for-profit university visited him at his home and encouraged him to enroll in a biomedical informatics program in New Jersey.

DeVry said he would receive in-state tuition and that his GI benefits would cover all of his educational costs, and helped him apply for loans, Hastie said.

Three semesters into the program, Hastie was struggling. He was being taught to write computer code, not preparing to work in a research lab, which is what he had been told he would be doing. Meanwhile, he was increasingly worried about his mounting debt. By the time he decided to cut his losses and move back home, Hastie had racked up more than $90,000 in student loans - with no degree to show for it.

Inundated by stories such as Hastie's, a number of states are working to protect college students as consumers, even as the federal government plays a more important role in regulating both for-profit colleges and the student loan industry.

Thirty-two states are now working together under the leadership of Kentucky Attorney General Jack Conway to investigate potential abuses in the for-profit college industry, which saw enrollment more than triple between 1998 and 2008, according to the Consumer Finance Protection Bureau.

One reason for the concern is the amount of taxpayer dollars involved: Some for-profit colleges receive 90 percent or more of their revenue from the federal and/or state governments in the form of student aid.