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Education Secretary Arne Duncan says the Education Department wants to make sure that loan programs that prey on students don’t continue their abusive practices. Now Kimberly Hefling reports at PBS that for-profit colleges that don’t produce graduates capable of paying off their student loans could soon stand to lose access to federal student-aid programs. In order to receive federal student aid, the law requires that most for-profit programs, regardless of credential level, and most non-degree programs at non-profit and public institutions, including community colleges, prepare students for "gainful employment in a recognized occupation." To meet these “gainful employment” standards, a program will have to show that the estimated annual loan payment of a typical graduate does not exceed 20 percent of his or her discretionary income or 8 percent of total earnings. "Career colleges must be a stepping stone to the middle class. But too many hard-working students find themselves buried in debt with little to show for it. That is simply unacceptable," says Duncan . "These regulations are a necessary step to ensure that colleges accepting federal funds protect students, cut costs and improve outcomes. We will continue to take action as needed."
But not everyone is convinced the rules go far enough. "The rule is far too weak to address the grave misconduct of predatory for-profit colleges," writes David Halperin. "The administration missed an opportunity to issue a strong rule, to take strong executive action and provide real leadership on this issue." The final gainful employment regulations follow an extensive rulemaking process involving public hearings, negotiations and about 95,000 public comments and will go into effect on July 1, 2015
(Score: 1, Interesting) by Anonymous Coward on Saturday November 01 2014, @06:07PM
Substandard how?
Back up a bit. The for-profits exist because the difference between the cost of delivering a standardized morsel of education (1 credit) is smaller than the apparent cost of delivery as expressed by frustrated Community and Public College administrators. In short, it probably costs between $100 and $150 per credit hour to deliver a credit (yes, VLM, I read your post and it was basically correct, but you missed a few necessary cost centers...), but the break even point at so many non-profits is somewhere between $300 and $350. The difference in those numbers is the profit!
So what drives up the price? Accreditation. You have to have it. Call it Credentialism for colleges.
To address this, the for-profits sought accreditation by national bodies (since they are often national, or at least interstate in their scope). To which the non-profits replied, with lobbyists and advertisements and journal articles, that NATIONAL accreditation was a joke - only REGIONAL accreditation should count. Regional accreditation committees are formed by the incumbent players and judge based on their own programs and facilities. Don't have a big library at your college? The big university librarians on the committee won't accredit you. Don't have big open fields for competitive or intramural sports and a gym with all of the latest equipment? No accreditation for you. Ditto every department and sub-specialty. You may want to teach quadrapalegics to be computer programmers, but you WILL have a football program!
But it turns out that it is possible to BUY regional accreditation in ~8-9 year lumps by buying and incorporating colleges with existing accreditation. Funny that.
The last bit is the students. It turns out that all of the geniuses want to go to MIT or CAL Tech or whatever. And the connected kids are gonna go to Harvard or Yale, or whatever. And everyone else with clear potential has been told by their counselors to go to state schools (because that's where high school counselors come from). So that leaves those with ambiguous potential, those with economic disadvantages despite any potential, and those who would not have been well served by the state schools...
In short, so many students in the for-profits do poorly after college because they were destined (by economics, not fate or God or whatever...) to do poorly. But some do great and would not have had the opportunity otherwise.
But are the schools predatory? More predatory than a miscellaneous non-profit? Not really. They all want full classrooms and to get paid. And the government has a wonderful PROGRAM to help with this... which is the problem.
A new class of debt was created that cannot be dismissed by a judge. And the the schools (profit and not) encourage students to use this type of debt. They call this encouragement "FINANCIAL AID". And that's the problem.
Education should be free blah blah blah. Bull. Even in the places where it is, it's done for the geniuses, of course, and then those with the clearest potential. "Those who qualify." Looking at you Germany. And you Finland.
Abolish regional accreditation. Prevent those with a background in "Education" from accrediting educational institutions. Consider abolishing education accreditation altogether. Prevent ALL education institutions from recommending debt financing in ANY form. No "financial aid night"at the local high school. No "click here to apply" for a loan on the college site. Even at the non-profits. That's my take.
FWIW