Friday, July 23, 2010

U.S. Releases Rules on For-Profit Colleges

The Obama administration on Thursday released its controversial proposed regulations to end federal student aid to for-profit colleges whose graduates do not earn enough to repay their loans.

Since most for-profit programs get the vast majority of their revenues from federal student aid, the regulations could effectively shut down the programs whose students have the most debt and the least likelihood of finding good jobs.

The for-profit colleges have lobbied strongly against the new “gainful employment” regulations. And in a statement Thursday evening, the Career College Association, which represents the colleges, called the proposed regulations “unwise, unnecessary, unproven” and said they were likely to harm students, employers, institutions and taxpayers. The Department of Education estimates that the rules would cut off federal aid to about 5 percent of for-profit college programs, representing about 8 percent of students, and that about 55 percent of the programs would be required to warn applicants and students that they may have trouble repaying their loans.

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