Magazine article Diverse Issues in Higher Education

Advocates Urge Quick Action on Rules Governing For-Profits: Institutions Account for 10 Percent of Enrolled U.S. College Students but 44 Percent of Student Loan Defaults

Magazine article Diverse Issues in Higher Education

Advocates Urge Quick Action on Rules Governing For-Profits: Institutions Account for 10 Percent of Enrolled U.S. College Students but 44 Percent of Student Loan Defaults

Article excerpt

For-profit, postsecondary institutions face intense scrutiny as the U.S. Department of Education examines responses to proposed regulations designed to ensure students receive valuable educational experiences that will enable them to enter and compete in the nation's work force.

DOE last month issued more than a dozen proposed rules for comment but held back the most controversial one, which beefs up requirements that for-profit institutions prepare students for gainful employment. The agency is still in the process of developing additional metrics to hold programs accountable and will issue a rule defining "gainful employment" separately.

Such a delay troubles education advocacy groups like the Institute for College Access & Success (ICAS), Rainbow PUSH Coalition, the National Education Association and others. In a letter to Education Secretary Arne Duncan and Office of Management and Budget Director Peter Orszag, they urged swift action on the gainful employment rule so that it can be finalized and in effect by July 2011 with the others. "In the next year alone, taxpayers will likely underwrite more than $30 billion in loans to students attending programs that are required to prepare them for employment," the letter reads. "Students and taxpayers shouldn't have to wait another year to be protected from career education programs that overcharge and under-deliver."

Ninety-eight percent of students at for-profit schools graduate with debt. For-profit colleges account for only 10 percent of enrolled students but 44 percent of student loan defaults. A recent report produced by the Senate Health, Education, Labor and Pensions (HELP) Committee, titled 'Emerging Risk? An Overview of Growth, Spending, Student Debt and Unanswered Questions in For-Profit Higher Education," found that persistent high default rates suggest students are not receiving educational value sufficient to allow them to afford the debt they incur. "The goal seems to be to bring in as many students as possible--regardless of their ability to succeed or graduate--load them up with loans and leave taxpayers on the hook if students default," said Sen. Dick Durbin (D-Ill.) in a speech at the National Press Club.

According to ICAS communications director Edie Irons, the stakes are really high for career education students, a significant proportion of whom are minority and low-income. The coalition of organizations that signed on to the letter to Duncan and Orszag have also created an action alert website at protectstudentsandtaxpayers.org that people can use to send a similar message to the two administration officials and to their congressional representatives.

The rules were crafted by a negotiating team that included representatives from student groups, consumer advocacy groups, postsecondary institutions, accreditors and lenders. …

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