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For-Profit Colleges Getting New Oversight from U.S. Education Agency

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The U.S. Department of Education met a Nov. 1 deadline for unveiling regulations to police for-profit colleges, after making extensive revisions in the package due to public push-back. The set of rules, scheduled to go into effect next July, include a requirement that for-profits, receiving federal aid, get approval from the U.S. government in some cases before offering new courses in the future.

The regulations include most of the changes Secretary of Education Arne Duncan's wants to bring "program integrity" to the industry. The department reports that students at for-profit schools use 26 percent of all student loans and represent 43 percent of all loan defaulters. The new rules will require any school taking federal student assistance to win approval before expanding into new course areas.

Secrertary of Education Arne DuncaonOwners of the University of Phoenix, Apollo Group Inc., say they are expecting a 40 percent drop in enrollment next quarter as a result of the regulations.

Lanny Davis, a lobbyist for a group of career colleges, accused the Obama administration of making a hasty decision that would impair training for jobs of the future, such as those in the environmental realm.

"How do you see green jobs five years ahead of time?" Davis said in a conference call last week.

A spokesman for Duncan, Justin Hamilton, said the schools got notice of the Nov .1 deadline for issuing the regulation in late September. And he said the process to get approval of new programs at colleges has been made simpler than under the initial proposal. Prior to revisions, the regulations would have allowed the department to reject a school's proposal for a new program because of low student success rate in a subject area different than the course in question.

With the changes, a school would not be penalized for poor performance in the past. The Department of Education expects that "very few new programs will be subject to this type of approval" it said in a news release.

Harris Miller, CEO of the Association of Private Sector Colleges and Universities, said the colleges his organization represents spend time predicting the success of graduates before they start a new program.

"They do the best they can and look at every variable," Miller said. "If [a new program] just shows up there and the market is already at or beyond capacity, you're just throwing money away."

Miller is pleased the new regulations will allow his schools to get programs for jobs like nursing easily approved, so they won't have to wait in line behind those with lesser demand.

One new regulation, however, has been delayed because of concerns -- 90,000 comments on it compared to the 1,200 on those just published. The so-called gainful employment metric would ban federal aid from going to schools that, by agency-defined standards, produce too much student debt and too few graduates. Hearings on it are set for next week in Washington with the goal of announcing a final rule early next year for enactment in July.
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My son went to ITT and got his associates degree. They were very helpful with getting loans; but they did absolutely nothing to help him find work. Now, 2 years after getting his degree, he finally found something paying all of $10 per hour. ITT definitely showed me that they were much more interested in getting paid, than they were in ensuring the success of their students.

November 02 2010 at 2:36 PM Report abuse +1 rate up rate down Reply
John Vilvens

The government tells them what students they have to take. Now if the students they have to take cannot graduate because course are to hard for them they will punish the school. The colleges that are a shame need to be addressed. But do not dumb down the better schools. All new course will have to be approved by who? Is it the party in charge? Will this be a cure or a bigger problem? Government toke over loans now they want to take over colleges. SOCIALISM

November 02 2010 at 9:02 AM Report abuse rate up rate down Reply

This government sticks it's big nose in anything that is for profit. Somebody needs to tell these people that their anti profit agenda is the cause of the loss of jobs and the lack of creation of new jobs.

November 01 2010 at 11:49 PM Report abuse +3 rate up rate down Reply
1 reply to joe's comment

So joe your far colleges ripping america off by producing low quality courses and graduates that dont have the required skills while at the SAME TIME WORKING OVERTIME TO GET GOVERMENT BACKED STUDENT LOANS THAT THE STUDENTS CAnt pay because their not qualified or the job field doesnt pay near the money the school made it out to

November 02 2010 at 12:52 AM Report abuse rate up rate down Reply
Mike D.

I love the new regulations coming but what are they going to HELP those of us that already got burned?!?!?!

November 01 2010 at 9:51 PM Report abuse -2 rate up rate down Reply

Tale your cheesy for profit degree and get a minimum wage job. They market to the vulnerable for profits. The student gets burned and stuck with 20K - 40k loans.

November 01 2010 at 9:03 PM Report abuse -1 rate up rate down Reply

Govt cut out the banks and their profits for doing nothing on student loans. Good. Saving tax payer $$$$.

November 01 2010 at 9:01 PM Report abuse -3 rate up rate down Reply
dc walker

It wasn't long was it. Once the government got rid of school loans by other than the government now they will tell you how much you can charge next it will be what you can learn.......government control just isn't the answer.

November 01 2010 at 7:57 PM Report abuse +5 rate up rate down Reply
4 replies to dc walker's comment

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