Government to Tighten For-Profit Schools
The government is tightening controls on for-profit colleges in an effort to stem growing levels of student dept. The new regulations are designed to protect students from misleading recruitment tactics and from accumulating large loans. Some reports say that after 15 years, 40 percent of students attending for-profit schools will default on loan payments. A high percentage of these students are recipients of federal loans.
“These schools — and their investors — benefit from billions of dollars in taxpayer subsidies, and, in return, taxpayers have a right to know that all of these programs are providing solid preparation for a job,” said Arne Duncan in a July 23 statement.
The regulations, known as the Gainful Employment proposal, will require for-profit schools to disclose their past graduation rates and history of job placement. It will require that new programs seeking federal aid must prove that the program will actually give students in-demand skills in growing industries. The proposal also prevents colleges from paying recruiters based on the number of students they enroll.
The regulations are scheduled to go into law on July 1, 2011. The New York Times reports that the Department of Education received 90,000 letters criticizing the changes from supporters of for-profit institutions. The department has agreed to meet with for-profit lobbyists on November 4th and 5th.
The Apollo Group, which runs the University of Phoenix, has already announced that it intends to comply with the majority of the new regulations.
$50.8 Billion in Student Loans in Default
Government Cracks Down on For-Profit Universities