From FY 1983 to FY 1986, TG proprietary school volume grew 938 percent. Volume then rose 80 percent more in the next year and an additional 172 percent between FY 1987 to FY 1989. Slowly, news spread of unscrupulous business practices at some proprietary schools. Students from these schools began defaulting at rates much higher than students from other school sectors. It soon became clear that the phenomenal growth in proprietary school loan volume was also causing a default crisis.
Proprietary schools are different from traditional colleges and universities.
Proprietary schools aggressively advertise and recruit. These were precisely the types of people that were not in the education pipeline that led to a four-year university degree. Advocates for proprietary schools boasted of the successes schools had with this disadvantaged population, turning the down and out into productive employees and taxpaying citizens. Critics, however, argued that many but not all proprietary schools actually had a negative impact on the lives of their students and that the federal and state governments should protect the student consumer from fraudulent schools. TG was among the most vocal critics of proprietary schools.