Protecting the public from for-profit colleges

The Obama Administration announced today new steps to address growing concerns about burdensome student loan debt by requiring career colleges to do a better job of preparing students for gainful employment—or risk losing access to taxpayer-funded federal student aid.

The proposed regulations released by the U.S. Department of Education “will help to strengthen students’ options for higher education by giving all career training programs an


opportunity to improve, while stopping the flow of federal funding to the lowest-performing ones that fail to do so.

“Higher education should open up doors of opportunity, but students in these low-performing programs often end up worse off than before they enrolled: saddled by debt and with few—if any—options for a career,” said U.S. Education Secretary Arne Duncan. “The proposed regulations address growing concerns about unaffordable levels of loan debt for students enrolled in these programs by targeting the lowest-performing programs, while shining a light on best practices and giving all programs an opportunity to improve.”

“To qualify for federal student aid, the law requires that most for-profit programs and certificate programs at non-profit and public institutions prepare students for gainful employment in a recognized occupation. Some of these programs, whether public, private, or for-profit, empower students to succeed by providing high-quality education and career training. But many of these programs, particularly those at for-profit colleges, are failing to do so—at taxpayers’ expense and the cost of students’ futures.

Students at for-profit colleges represent only about 13 percent of the total higher education population, but about 31 percent of all student loans and nearly half of all loan defaults. In the most recent data, about 22 percent of student borrowers at for-profit colleges defaulted on their loans within three years, compared to 13 percent of borrowers at public colleges.

“Most students at for-profit gainful employment programs who graduated with an associate degree were also left with federal student loan debt, which averaged $23,590, while the majority of students at community colleges did not borrow. And of the for-profit gainful employment programs the Department could analyze and which could be affected by our action today, the majority—72 percent—produced graduates who on average earned less than high school dropouts.”

More at:

Leave a Reply

Your email address will not be published. Required fields are marked *