Proposed Rules Target For-Profit Colleges; the Schools Account for 13 Percent of All College Students but 46 Percent of All Loan Defaults; Business

By Elliott, Philip | St Louis Post-Dispatch (MO), March 15, 2014 | Go to article overview

Proposed Rules Target For-Profit Colleges; the Schools Account for 13 Percent of All College Students but 46 Percent of All Loan Defaults; Business


Elliott, Philip, St Louis Post-Dispatch (MO)


WASHINGTON * The for-profit college industry says it will vigorously oppose proposed regulations by the administration of President Barack Obama designed to protect students at for-profit colleges from amassing huge debt they can't pay off.

The proposed regulations would penalize career oriented programs that produce graduates without the training needed to find a job with a salary that will allow them to pay off their debt. Schools, for-profit or not, that don't comply would lose access to the federal student aid programs.

If finalized, the regulations would take effect in 2016.

In 2012, the for-profit colleges convinced a judge that similar regulations were too arbitrary.

Steve Gunderson, president and CEO of the Association of Private Sector Colleges and Universities, said in a statement that the proposed regulations would "deny millions of students the opportunity for higher earnings."

His association argues that the regulations would have a long- term impact on the nation's ability to address workforce demands and improve the economy, and he called the proposed regulations "discriminatory" and "punitive."

For-profit programs are popular among nontraditional students, some of whom have been laid off during the economic downturn.

Gunderson said no decision had been made on whether more legal action will be taken.

The administration has long sought to block federal student aid from programs that do not prepare students for "gainful employment" in a recognized occupation. The programs covered under the proposed regulations include nearly all programs at for-profit schools, as well as certificate programs at public and private nonprofit institutions, such as community colleges, according to the Education Department. …

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