Dear Commons Community,
The Obama Administration and the U.S. Department of Education has proposed a number of changes to the guidelines regulating financial aid for for-profit colleges. The NY Times has an editorial today referring to a new report by the Education Trust that highlights the low graduation rates of some of the larger for-profit colleges and universities. The critical provision of the new guidelines is the gainful employment provision that essentially requires:
“the [U.S. Education] Department to examine for-profit colleges and nonprofit trade programs to see how much debt their students accumulated in paying for schooling, and whether the jobs they secured after graduation allowed them to repay their loans. Programs that had particularly high debt ratios combined with very low repayment rates could become ineligible for student aid”.
Naturally the for-profit colleges are lobbying heavily against this provision that potentially would curtail a significant portion of their financial aid eligibility. Below is a table from the Education Trust Report that presents troubling graduation rates for some of the for-profits. In comparing higher education sectors, the report found that four-year for-profits graduated only 22 percent of their students within six years, compared with 55 percent for public schools and 65 percent at private nonprofits. The for-profit students also left school with significantly more debt. Anyone interested in this topic should definitely read the full report.