I know Arne Duncan is not real popular around here, but I think we all need to support this

[bluestateguy]

http://www.huffingtonpost.com/2010/07/23/federal-colleges-funding-jobs-loans_n_657821.html


The Education Department proposed much-anticipated regulations Friday that would cut off federal aid to for-profit college programs if too many of their students default on loans or don't earn enough after graduation to repay them.

"Some proprietary schools have profited and prospered but their students haven't, and this is a disservice to students and to taxpayers," Education Secretary Arne Duncan said in a briefing with reporters. "And it undermines the valuable work, the extraordinarily important work, being done by the for-profit industry as a whole."

To qualify for federal student aid programs, career college programs must prepare students for "gainful employment."

The Obama administration, amid intense lobbying from both for-profit college officials and consumer and student advocates, is proposing a complicated formula that would weigh both the debt-to-income ratio of recent graduates and whether all enrolled students repay their loans on time, regardless of whether they finish their studies.

more

[elleng]

1. Not keen on this at the moment, due to 'gainful employment' requirement.

At the moment, how many can obtain 'gainful employment?'

The idea is OK (I guess,) but concerned about implementation.

[nashville_brook]

2. for-profit colleges are making $$ hand over fist right now. it's one of the ONLY expanding

businesses in the commercial real estate market, and everyone wants a piece of this action.

i don't like the precedent of making student aid contingent on gainful employment...next thing you know they'll be prescribing aid-worthy majors. want to major in english or history? you better not need a student loan, then.

[madrchsod]

3. wow what a load of crapola

my son went to devry. he was majoring in a field that 2/3 the way through the program the job market collapsed. he`s thousands of dollars in debt. if the job he was majoring in was there when he graduated he`d have no problem paying back the loan. instead of a high tech job he`s working roll tending on printing press.

i will grant the fact that some of these schools are crap but that`s up to the dept of education and the banks to crack down on fraud.

[DebJ]

4. Well, WalMart greeter schools would do really well.

[txlibdem]

5. Colleges and "training" schools need oversight

Just like any for-profit business there needs to be government oversight. It shouldn't be limited to schools that take student loan funds, though.

Like an oil change shop that takes your money but doesn't really change your oil, an educational establishment should be actually providing a useful service. If they give you a worthless piece of paper only then they are not providing the service you are paying for, that should be illegal if it isn't already.

We're not talking about only one or a few students who can't get a job. They are going to be looking for trends. I'm surprised they haven't been doing this all along. I guess the Bushies destroyed the functioning of our government agencies far more than even I thought.

[ProgressiveProfessor]

7. Make it all colleges and university and I would go along with you

[txlibdem]

8. agreed

[ProgressiveProfessor]

6. I believe this should be all colleges & universities. So called not-for-profit schools

are little better and some times worse in encouraging large amounts of debt that can never be repaid.

[Hannah Bell]

9. oh, baloney.

Student loan debt is highest at for-profit schools, report says

Students who attend for-profit colleges graduate on average with much larger student loans than those who attended public or private nonprofit schools, according to a College Board report released Monday. As a result, officials urge students to consider their choices of colleges very carefully...

At public colleges, 38% had no loans, 51% had debt less than $30,500 and 12% borrowed more than $30,500.

At private nonprofits, 28% had no debt, 48% had debt less than $30,500 and 24% owed more than that.

However, only 4% of graduates at for-profit schools finished with no loans, while 43% had loans totaling less than $30,500 and 53% owed more than $30,500, the study showed.

http://latimesblogs.latimes.com/lanow/2010/04/student-debt-is-highest-at-for-profit-schools-report-says.html

for-profits offer education no better & often worse than what students could get in a community college; they charge more for it, & don't weed out students who aren't doing the work/attending classes. because in many cases their sole purpose is simply to keep the government dollars coming in.

that's why they have higher debt loads.

[ProgressiveProfessor]

10. If what you say is true, then the not for profits will have no problems complying with said rules

since they would never approach the triggers. However, we all know that is not true in all the cases.

The problem is that too many people are lumping the higher ed business (and that is what it is) into the for profit/not for profit when a finer level of detail that covers different aspects is what is really needed. By way of example, Univ of MD Univ College (UMUC) is the non-traditional University of Maryland school oriented at working professionals etc. Its a U of P clone in many way, down to the costs of courses offered at overseas military bases. It just lacks the stigma that U of P has. Emory-Riddle is doing much the same. Lets compare their loan and graduation rates, apples to apples, since they are in the same marketplace.

Clearly some explicit monitoring corrective action is well past due. However it needs to be across all of the higher ed industry, not just one segment. Clearly some schools will be hit harder by it than others. To assume that only for profit will be those impacted is specious at best.

[Hannah Bell]

11. at private non-profits (typically private schools aka harvard), 28% finished with no debt.

at for-profits, only 4% did.

At private nonprofits, 28% had no debt, 48% had debt less than $30,500 and 24% owed more than that.



the reasons are multiple:

1. for-profits target middle-class & working-class students; most private schools are for upper-class students (who don't need as much financial aid)

2. for-profits cost more (sometimes way more) than equivalent public schools

3. for-profits are driven by the profit motive to enroll as many students as possible, & keep them enrolled, even when they're completely unqualified & not doing a lick of work -- in effect colluding with the college to steal public funds.

non-profits only need to enroll "enough," have their endowments to fall back on in bad years, have the funds to give scholarships, & usually have waiting lists. if one student doesn't make it, there's always another to take his place.

it's bullshit that private colleges have anywhere near the default rates or numbers, as the stats show. more than half of 4-profit students come out owing more than $30k.

only 24% at private schools do. with a hell of a lot better education & employment prospects.

[ProgressiveProfessor]

12. So the proposed reporting rules would pose no problem or burden and are of no concern

Remember the recent story of the NYU student in debt she could never repay? How many of those are there out there as well?

Make the rules for the entire higher ed biz. Those doing it well will have no problems. It will also generate complete stats, which are not required today.

The real issue for me is online vs in person. The dropout rates there are huge when compared to regular campus classes, regardless of provider.

[Hannah Bell]

13. private schools: 24% graduate with loans >30K, WITH WAY BETTER JOB PROSPECTS & EDUCATION.

for-profits: over HALF GRADUATE WITH MORE THAN $30k IN LOANS, & their "education" generally qualifies them to do the same things an AA degree from a trade school would.

[ProgressiveProfessor]

14. So there is no issue with the rules apply to all schools

The metric to look at is online vs in person. Its a cash cow for ANY school and the graduation rates are questionable.