Opinion: New ‘gainful employment’ regulation is weak medicine for a strong ailment

Jose Cruz of The Education Trust says for-profit colleges still will face scrutiny from states attorneys.

The gainful employment regulation recently announced by the U.S. Department of Education is painfully weak, especially when compared with the colossal and well-documented abuses committed by for-profit career colleges.

Under the new regulation, a career education program will need to fail all three of the following very forgiving standards for three out of four years before it can be declared ineligible for federal subsidies.

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Senator: For-profit colleges use subprime mortgage-type loans

Harkin says new Education Department rules are "better than nothing."

Students attending for-profit colleges are subject to subprime mortgage-like loans that saddle them with thousands of dollars in debt and waste millions in taxpayer dollars, Democratic lawmakers and education experts said at a June 7 Senate hearing.

The hearing of the Senate Health, Education, Labor and Pensions Committee came just days after the Education Department issued new rules to deal with the student debt problem at career colleges, rules that those at the hearing said did not go far enough.

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Are new ED rules an ‘unconditional surrender’ to for-profit colleges?

Duncan has helped shape for-profit regulations since 2009.

Some of the country’s largest online education programs will have to comply with federal regulations far less stringent than once thought after the U.S. Education Department (ED) unveiled its new rules for for-profit institutions that have come under fire for unscrupulous business practices.

The long-awaited rules aimed at for-profit schools such as the University of Phoenix and Kaplan University—first discussed in 2009—were released June 1. The regulations are meant to ensure that students aren’t graduating from for-profit colleges unqualified for the professional world and burdened with excessive student loan debt.

One-fourth of for-profit students default on their loans after three years, for-profit students account for almost half of all federal loan defaults, and graduation rates at those schools hover around 50 percent, according to national education statistics.…Read More

For-profit colleges face more state scrutiny

Lawmakers in at least 17 states have introduced bills on for-profit colleges this year.

Tired of waiting for action from the federal government, several states are moving ahead with plans of their own to tighten regulation of for-profit colleges—including some of the nation’s largest online schools.

Last fall, the federal government started drafting new rules to rein in the recruiting practices of for-profit colleges.

That effort followed a report by the U.S. Government Accountability Office that found the colleges deceived potential students about graduation and job placement rates in the process of getting them to enroll and sign up for state and federal loans.…Read More

For-profit colleges concede defeat on new rules, vow to fight on

Miller lauded bipartisan support for a provision that would defund for-profit rules.

Efforts by lobbyists from for-profit colleges – including some of the largest online education programs – fell short last week when Congress passed a compromise budget bill that would allow the Education Department (ED) to move ahead with its long-awaited “gainful employment” regulations.

In an April 11 statement, Harris Miller, president of the Association of Private Sector Colleges and Universities (APSCU), said the group’s last-ditch try to get the House and Senate to include a provision that would de-fund ED’s for-profit rulemaking was not included in the final budget that will fund the federal government through September.

APSCU asked its members to call their Congressional representatives as the final budget was being finalized, not conceding defeat on the for-profit regulations – known as “gainful employment” rules — until the bill became law.…Read More

For-profit regulations, Pell Grants survive budget compromise

Experts expect lawmakers to keep Pell Grant funding at its current level.

Washington’s last-minute budget deal did not include a provision that would have killed a stringent for-profit college regulation, and Pell Grants remained intact despite deep cuts in education spending over the next six months.

The for-profit regulations pushed by the Obama administration for more than two years would affect some of the nation’s largest online colleges, such as the University of Phoenix and Kaplan University, by stripping schools of federal loan money if too many of their students maintain high loan debt-to-income ratios, among other provisions.

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Budget deal allows regulations to move forward on for-profit colleges

Much of Friday’s last-minute budget gridlock centered on policy disputes over funding for Planned Parenthood and environmental regulations. But another largely unnoticed provision at play in last week’s negotiations involved rules that would regulate billions of dollars of federal student loan and grant money allotted to college programs with a track record of poor student outcomes, reports the Huffington Post. A spokesman for Senate Majority Leader Harry Reid (D-Nev.) confirmed on Saturday that the final deal will not include a measure that would have prevented the Obama administration from cracking down on certain schools…

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Experts: Accusations could make students wary of for-profit colleges

Students claim they were misled by Kaplan University advisors.

Members of Congress likely won’t be swayed by the latest round of damaging personal accounts from former Kaplan University students released last week, but prospective students might exercise a bit more caution while researching online college offerings, industry experts said.

Change.org, a nonprofit organization specializing in web-based petitions, is publishing a series of personal stories from former students at Kaplan – one of the nation’s largest online institutions – who claim they were misled by the university and saddled with thousands in student loan debt.

The Change.org accounts are the latest in a string of charges claiming the fast-growing for-profit college industry has used unseemly recruiting practices and student loan tactics that lead students to a job that doesn’t pay enough to afford massive loan repayments.…Read More

For-profit regulation could survive Senate vote, sources say

Democratic senators are expected to fight the House's "gainful employment" amendment.

Many of the country’s largest online colleges still could be subject to the Obama administration’s regulations on for-profit schools, despite a vote by the Republican-controlled House of Representatives to stop any attempt to enforce the proposed rules.

House Republicans, along with more than 50 Democrats, passed an amendment Feb. 18 that would block the U.S. Education Department (ED) from using funds to initiate “gainful employment” regulations on for-profit colleges—including the University of Phoenix and other large online-learning institutions.

However, the Democratic-controlled Senate isn’t likely to approve the defunding of “gainful employment” rules, according to sources familiar with Capitol Hill negotiations on the matter. The sources said they would only speak to eCampus News anonymously because senators are still deciding how the for-profit amendment will be handled in a Senate vote.…Read More