For-profit schools cry foul on loan rules

For-profit schools are opposing what they argue is a “retroactive” crackdown on student loan defaults, and said on Thursday that they may challenge the U.S. Education Department in court, reports Reuters. The fight over whether the department can look at default data of students who left school three years ago is the latest twist in a larger battle over new rules aimed at cracking down on tuition loan abuses and ensuring courses lead to gainful employment. A preliminary rule says programs at for-profit schools could lose their eligibility for student loan funding if 65 percent of students default or are shown to be unable to pay their loans. Losing federal aid could cripple some for-profit schools. The Education Department opted to use default data from students who left the programs in previous years. The rule–which is not yet final–is slated to go into effect in mid-2012…

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