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The Obama Administration's years-long effort to improve regulation of the nation's for-profit colleges and trade schools with new "gainful employment" rules is nearing completion.
The public comment period for the Administration's final rule-making process ends May 25, and the Administration is expected to enact a final rule later this year. 
As set forth in its proposed final rule unveiled on March 14, the Administration is enacting new requirements that will apply to nearly all for-profit colleges and trade schools and many certificate and non-degree programs at public and non-profit institutions of higher education.  In order to remain eligible for federal student aid (the lifeblood of many for-profit colleges), the new rules will require schools to demonstrate that their programs are actually preparing students for gainful employment in a recognized occupation.   In a press release, the Department of Education explained that under the proposed final rules,  "Career programs would need to meet key requirements to establish that they sufficiently prepare students for gainful employment."  Among the requirements:
  • Institutions must certify that all gainful employment programs meet applicable accreditation requirements and state or federal licensure standards.
  • All gainful employment programs must pass metrics to continue eligibility in the student financial aid program, including: the estimated annual loan payment of typical graduates does not exceed 20 percent of their discretionary earnings or 8 percent of their total earnings and the default rate for former students does not exceed 30 percent.
  • Additionally, institutions must publicly disclose information about the program costs, debt, and performance of their gainful employment programs so that students can make informed decisions. 
Education Department Secretary Arne Duncan has said about the new proposed rules, "Higher education should open up doors of opportunity, but students in these low-performing programs often end up worse off than before they enrolled: saddled by debt and with few—if any—options for a career. The proposed regulations address growing concerns about unaffordable levels of loan debt for students enrolled in these programs by targeting the lowest-performing programs, while shining a light on best practices and giving all programs an opportunity to improve."
 
 
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A U.S. Senator is taking steps to advise high school students regarding the risks of pursuing post-secondary education at for-profit schools. In a press release, U.S. Senator Dick Durbin (D-IL) announced that he had urged high school principals across Illinois to ensure that their students are receiving honest and accurate information about their higher education options, and that they are aware of the risks associated with the for-profit college industry. Durbin stated that he wrote the principals to call their attention to the “often irresistible lure of for-profit colleges,” many of which are facing increased scrutiny from federal and state regulators for a variety of abuses including fraudulent marketing and recruiting practices, falsifying job placement rates, and predatory lending practices. Durbin asked the principals to make their students aware of all of their options for accessible, affordable higher education, including programs at community college and other not-for-profit institutions.In the letter to principals, Durbin wrote in part, "Students can hardly ride a CTA bus, watch their favorite prime-time sitcom, or surf the internet without being bombarded by attention-grabbing advertisements from for-profit colleges offering a hassle-free enrollment process, federal financial assistance, flexible schedules and a promised path to high-paying jobs and a better life. But too often it doesn't work out that way."
The Senator's letter drew a stern response from one of the nation's largest for-profit providers of post-secondary education, Devry, Inc., which is based in Durbin's home state of Illinois.  Devry stated in its own public statement that it had successfully educated tens of thousands of students in Illinois, including a number who participated in a program that allows high school students to earn associate's degree credits while still enrolled in high school. 

 
 
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The Huffington Post reports that one of the nation's largest for-profit education companies is attempting to rally opposition to federal regulations  proposed by the Obama administration by offering students free pizza slices.  According to the report by the Huff Post's David Halperin, the Art Institute of Fort Lauderdale, one of the schools run by Education Management Corporation (EDMC),  posted on its Facebook page that students should "Stop by the library all week between 12-1 and 5-6 to sign in to SaveStudentChoice and enjoy a free slice of Pizza.  Takes 5 minutes."  SaveStudentChoice is a for-profit school industry-backed  website aimed at opposing the Obama Administration's proposed federal regulations that would, among other requirements, condition a college's continued eligibility for federal student aid on the institution's  ability to meet targets for gainful employment among its graduates.  The for-profit school industry is attempting to inundate the U.S. Department of Education with complaints about the regulations before they are scheduled to take effect in late 2014.  
Offering freebies to students at for-profit schools in exchange for help with lobbying or an address or phone number of someone that a school can recruit for enrollment is a practice that regularly occurs at for-profit schools, where aggressive efforts to sell programs to adults and problems with graduating students finding employment often can arise.  


 
 
A new survey of for-profit school students, alumni and employers gives the schools mixed results, with about a third of alumni rating their programs to be "well worth it."  The survey conducted by Public Agenda and financed by the Kresge Foundation finds that only thirty-seven percent of the alumni described their degrees as "well worth it," with thirty-two percent stating they "weren't really worth it" and another thirty percent stating it remains to be seen.