For-profit colleges prepare to fight federal funding cuts

[Ed Barrow]

Source: New York Times News Service

Any day now, the federal Department of Education will formally propose new regulations that would cut off federal aid to for-profit colleges whose graduates cannot earn enough to repay their student loans.

The regulations, known as the "gainful employment" rules, are an effort to rein in the high debt loads students take on when they enroll in for-profit colleges that offer certificates or degrees in fields such as nursing or culinary arts. Students at for-profit colleges are much more likely than others to default on their loans.

Under the regulations, a draft of which came out in February, for-profit colleges would not be eligible to receive federal student aid if their graduates' debt load were too high to be repaid, over 10 years, with 8 percent of their starting salary.

...


According to the U.S. Public Interest Research Group, part of a coalition of education, consumer, student and public-interest groups supporting the regulations, students in 2007 at for-profit colleges made up 7 percent of those in higher education but 44 percent of those defaulting on federal student loans.

Read more: http://www.kentucky.com/2010/06/06/1294673/for-profit-colleges-prepare-to.html

[tammywammy]

1. This regulation is long overdue

These career colleges are loading people down with debt for a degree that could be obtained much cheaper at a community college or local university. They're nothing but a scam.

[PSPS]

3. You're right. It is a pure scam.

The TEE VEE is awash in those ads showing the waitress dancing around or the girl in her bedroom deciding what "college" to go to with a "free online survey." Hey! It's "a $100 value for FREE!!1!"

These ads are just funnels for suckers who will get approved for a federally-funded loan that goes into the fake college CEO's wallet. And, as usual, the taxpayer gets screwed.

[Jkid]

13. Fixed!

Cable TEE VEE is awash in those ads showing the waitress dancing around or the girl in her bedroom deciding what "college" to go to with a "free online survey." Hey! It's "a $100 value for FREE!!1!"

[depakid]

4. No doubt about that- this has been a problem for well over a decade now

[SheilaT]

2. While strict regulations absolutely

need to be in place, I never cease to be amazed at how much money people will borrow to go to college, when there are usually alternatives, such as attending a cheaper school, or working and attending part time.

[hughee99]

5. Anyone think these schools will stop offering degrees in things that don't pay well?

n/t

[davidhilton]

9. What about art and music colleges - what's your take on those?

[hughee99]

10. I love them...

but given these rules, are expensive private schools going to be encouraged to not offer disciplines that don't pay well for graduates? For example, does the starting salary for someone with a BA in English lit from a school like Harvard allow one to pay back their loans on this schedule? Will this encourage that school to no longer offer that?

I'm not 100% clear on the rule, though. Is it based on the salary of students who receive federal aid, or all students, regardless of how they pay for school? If it's just based on those who receive federal aid, then it encourages schools to only allow students who don't need aid to attend (or at least take certain majors).

I can see where this might create serious havoc with art and music colleges, given the nature of those fields.

I'm skeptical that this will be all that successful in keeping tuition down, though, which is what I assume this is aimed at.

[Cal Carpenter]

11. Most private schools are non-profit

It's a whole different category of schools at issue here - *for-profit* schools - not places like Harvard or other established private universities which have nonprofit educational institution status...

[hughee99]

12. Okay, bad example on my part, but my concerns still stand.

I didn't realize how few actual "for profit" schools there were. It's seems to be mostly the distance/online learning schools.

[tammywammy]

14. I go to a private university

It's non-profit.

[bluestateguy]

6. For profit colleges are a joke and should get no funding at all

Few employers take them seriously.

The student loan bill that was tacked on to the health care bill was a good bill.

[tammywammy]

7. The student loan bill was good

My university was talking it up, about the changes coming, all positive. :)

[dencol]

8. Some are better than others.

As much as I typically despise corporations, I have been pretty happy with my graduate classes at DeVry. The instructors seem to be top-notch (better than many I had for my undergraduate studies at a Big 10 University), and there are many students who I actually learn from as well. I can't speak to undergrad classes, though.