New Education Department Rule Targets For-Profit Colleges


July 23, 2010
by Scholarships.com Staff
In response to recent criticisms of for-profit colleges, the U.S. Department of Education announced a rule today that will cut off federal aid to those schools that leave students with loan debts they are unable to handle once they receive their degrees and certificates. The new “gainful employment” rule would also penalize those programs with the lowest loan-repayment rates, meaning for-profit colleges will be more on the hook to make sure those enrolled in their programs are being prepared for the job search and for entering the workforce.

In response to recent criticisms of for-profit colleges, the U.S. Department of Education announced a rule today that will cut off federal aid to those schools that leave students with loan debts they are unable to handle once they receive their degrees and certificates. The new “gainful employment” rule would also penalize those programs with the lowest loan-repayment rates, meaning for-profit colleges will be more on the hook to make sure those enrolled in their programs are being prepared for the job search and for entering the workforce.

The for-profit sector currently accounts for less than 10 percent of total enrollments but about 25 percent of federal financial aid disbursements. Congress has also been looking at the issue this summer, with some legislators concerned by the large amounts of debt students were being saddled with at some for-profit colleges when compared to the comparably low salaries they could expect to receive upon completion of those programs, or the difficulty they may have finding work at all. In an article in The Chronicle of Higher Education today, officials with the Education Department said this was a way to both protect students and taxpayers, as the measure could help prevent both groups from incurring the high costs of student-loan defaults. 

According to the article, the new rule would consider the number of borrowers repaying their federal student loans against the ratio of total student loan debt to average earnings. About 5 percent of for-profit programs nationwide may be affected by the new rule, and thus would become ineligible for federal aid. About 55 percent on the cusp of ineligibility might need to become more forthright with potential students about excessive borrowing. The new rule doesn’t go as far as the Education Department had initially proposed; that first proposal would have cut federal aid to those programs where a majority of students’ loan payments exceeded 8 percent of the lowest quarter of students’ expected earnings over 10 years of repayment, according to The Chronicle.

Most for-profit schools do serve an important purpose, especially for students changing careers or looking for a flexible alternative. If you’re interested in a career college, just make sure you do your research. There are programs out there that are accredited, or that meet a set of standards from the Education Department, and qualified to give you an advantage in the job market.

Just because there are millions of college scholarships out there doesn’t mean you have time to go searching, and many won’t even match your profile. We’ve done the work and Scholarships.com is totally free. We have the search algorithms and scholarships database, saving you time in searching, finding and applying to thousands of dollars in college scholarships. Get instantly matched to scholarships that meet your unique talents, skillset and strengths, only those you qualify for. Access a complete list of college scholarships now by conducting a free college scholarship search at Scholarships.com.

Discuss

Share your thoughts and perhaps thousands of students will benefit from your unique insight on the subject!



If you can read this, don't touch the following fields


 
The Supreme Court on Monday partially reinstated the POTUS' travel ban, exempting foreign nationals who have a credible claim of a bona fide relationship with a person or entity in the United States. Acceptable groups include students admitted to U.S. colleges and universities, employees who have accepted job offers in the U.S., and lecturers invited to speak to American audiences.

International Students Impacted by Partial Travel Ban

June 27, 2017 9:08 AM
by Susan Dutca
The Supreme Court on Monday partially reinstated the POTUS' travel ban, exempting foreign nationals who have a credible claim of a bona fide relationship with a person or entity in the United States.

    When it comes to earning scholarships for college, some students have the go big or go home mentality and chase the big buck scholarship opportunities. Landing a huge scholarship may take more work - meaning more time spent on the application process and essays, needing strong recommendation letters and competing against a pool of highly-qualified students. If you're motivated to land a large dollar scholarship that can potentially pay for your entire college tuition, check out these generously-endowed scholarships:

Large Dollar Scholarships

June 23, 2017 11:01 AM
by Susan Dutca
When it comes to earning scholarships for college, some students have the "go big or go home" mentality and chase the big buck scholarship opportunities. Landing a huge scholarship may take

    Everyone knows big-name companies such as Google or Coca-Cola...but did you know that these companies also offer scholarship opportunities to help you pay for college? That's right! If you love these quality products and services, you may be interested these generously-endowed scholarships. Check out this list of brand name scholarships offered by the companies with which you are most familiar:

Brand Name Scholarships

June 22, 2017 2:44 PM
by Susan Dutca
Everyone knows big-name companies such as Google or Coca-Cola...but did you know that these companies also offer scholarship opportunities to help you pay for college? That's right! If you love

    Independence Day, also known as the Fourth of July, is the day in which we celebrate America's independence and freedom. Education has been, and will always be a great equalizer. Even though college can be expensive, it is still a fast track towards the American Dream and can be more easily attained with the help of financial aid in the form of grants and scholarships - which do not have to be repaid! Exercise your freedom this July and help make your college education dreams more affordable with these red, white and blue July 2017 scholarships:

July 2017 Summer Scholarships

June 22, 2017 11:43 AM
by Susan Dutca
Independence Day, also known as the Fourth of July, is the day in which we celebrate America's independence and freedom. Education has been, and will always be a great equalizer. Even though
POTUS Donald Trump is pushing for apprenticeship programs and intends to support the initiative with an apprenticeship grant program of up to $200 million, with special emphasis on industries such as information technology,  healthcare, and manufacturing. The college alternative initiative hopes to attract and prepare students for great careers that do not require a four-year degree or the massive debt that often comes with those four-year degrees and even two-year degrees.

POTUS Pushing Apprenticeship Programs, Grants in 2017

June 14, 2017 11:16 AM
by Susan Dutca
POTUS Donald Trump is pushing for apprenticeship programs and intends to support the initiative with an apprenticeship grant program of up to $200 million, with special emphasis on industries such as

    Summer is finally here and fall semester may be the last thing on your mind right now. However, you may be one of the many students who need to work a summer gig, save up, or rely on your parents and student loans to help foot your fall tuition bill. While those are all legitimate options, you now have more free time (and less homework and tests), so why not take advantage of these summer scholarships? It's not too late to earn free college scholarships to help pay for school. Use your downtime wisely by applying for these summer 2017 scholarships!:

Summer 2017 Scholarships

June 2, 2017 3:47 PM
by Susan Dutca
Summer is finally here and fall semester may be the last thing on your mind right now. However, you may be one of the many students who need to work a summer gig, save up, or rely on your

    In support of lesbian, gay, bisexual, transgender, queer (LGTBQ) Pride Month this June, Scholarships.com is adding more color to its themed scholarships with scholarships for LGBTQ students and allies. Scholarships.com is dedicated to bringing equal financial aid and free college scholarship opportunities for all students.

LGBT Scholarships for Pride Month 2017

June 1, 2017 11:42 AM
by Susan Dutca
In support of lesbian, gay, bisexual, transgender, queer (LGTBQ) Pride Month this June, Scholarships.com is adding more color to its themed scholarships with scholarships for LGBTQ students and