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The Department of Education released its long-anticipated regulations for for-profit colleges Thursday. By 2015, if fewer than 35 percent of graduates of a school are repaying the principal on their loans three years after commencement and if loan payments are more than 30 percent of discretionary income and 12 percent of all earnings, the school will lose eligibility for federal financial aid.

The regulations are looser than what was initially proposed last year – giving schools an additional two years before they kick in and lowering the debt-to-income ration. As a result, as Inside Higher Ed reported this morning, both critics and supporters of the regulations have things to complain about. While some are cheering the Department of Education, others still have reservations about whether the regulations go too far – or don’t go far enough.

Here’s a sampling of some of the reaction to the regulations. We’ll add in more as the day goes on and more people weigh in.

“We remain very concerned that the gainful employment regulation, while reflecting the fact that the Department has listened to the sector and made changes to its initial proposal, is still using the same ill-advised metric approach to this matter and is clearly outside of its statutory authority.  Notwithstanding the changes, the real question is how the regulation will impact students, particularly non-traditional students served by our institutions.  We will not know the answer to that until we have had the opportunity to run an independent analysis of the Department’s metric.  Our concern is that the regulation will still penalize programs with great outcomes while allowing under-performing programs to continue.  We need to trust but verify the impact of the new regulation.  The APSCU Board will review the regulation’s impact on students carefully before deciding its next steps.”

The Association of Private Sector Colleges and Universities

“These regulations are urgently needed to hold these institutions accountable given the rising tide of debt and default rates faced by students enrolled in many for-profit career education programs – a majority of whom are women, minorities, low-income individuals, veterans and service members.”

-Nancy Zirkin, executive vice president of The Leadership Conference on Civil and Human Rights

“As we closely review the U.S. Department of Education’s final gainful employment regulation, nothing changes the fact that Congressional leaders have made it clear that the definition of ‘gainful employment’ is the purview of Congress and not the Department. The Department’s attempt to arbitrarily expand the definition of ‘gainful employment’ is clearly at odds with the intent of Congress.”

– Penny Lee, The Coalition for Educational Success (The Coalition for Educational Success includes many of the nation’s leading career colleges, serving more than 350,000 students at 478 campuses in 41 states. Career colleges provide training for students in 17 of the 20 fastest growing fields.)

Given the overwhelming evidence that the worst for-profit colleges are abusing students and taxpayers, the rule isn’t strong enough, but it’s still an important reform that could, over time, help millions of students.

We believe that, collectively, the rules issued by the Administration, ongoing investigations by state attorneys general, and increasing scrutiny by Congress and the media will ultimately compel for-profit schools to clean up their act or else shut their doors.

-Campus Progress, a division of the Center for American Progress

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Letters to the Editor

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  1. I am an Adult Ed teacher in San Diego where students come into class to get their GED after attending schools like Kaplan, UEI, and even junior colleges. Unfortunately, these students that I hear from are saddled with loans that cannot be paid off since they cannot get a job after the worthless degrees received at these schools. Recruiters do NOT tell them that a high school diploma or GED is required for many of the professions studied. I am so happy to see these new gov’t “Regulations” put in place to curb these abuses.

  2. These regulations give these “Schools” full permission to rip kids off until 2015.

    Why!? They need to be stopped NOW.

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