Too many for-profit colleges bury students in debt in exchange for worthless degrees.
These operations use cut-throat sales tactics to trap a constant stream of new students and convince them to take out government guaranteed loans. They charge tuition fees that far exceed the value of the education they provide. Students default on loans in droves, leaving taxpayers on the hook.
Not all for-profit institutions are bad, but the industry has a horrendous track record dating back to the GI Bill.
Without taxpayer-funded loans, the industry flimflams would dry up, and you would think Uncle Sam would have cut off the flow of money by now. In fact, federal lawmakers and regulators are finally throwing up some good ideas.
We keep our fingers crossed, but we are skeptical.
For-profit institutions spread a lot of money around Congress, and their allies often claim that cutting the loan stream would hurt minority military veterans and first-generation college students who are some of the juiciest targets for sales teams. industrial boiler rooms. . More than a dozen House Democrats recently urged their leaders to eliminate the exclusion from financial aid from President Joe Biden’s social spending program, saying it amounts to “punishing the students.”
By protecting them from financial predators? Absurdity.
For-profit institutions also share a common interest with nonprofit colleges and universities in keeping federal loan dollars coming. Whether it’s Harvard, Yale, or Columbia, there are many top schools across the country that offer highly profitable graduate programs, typically in the arts or other creative subjects, that don’t prepare most of the skills. students in jobs that pay high enough to pay off such heavy debts. . Payment defaults often follow.
A promising and quiet effort is underway at the US Department of Education, where the Biden administration is beginning to revise higher education policies. A rule-making committee has made progress on some relatively easy issues, such as canceling loans for severely disabled borrowers.
The committee has yet to reach a consensus on either canceling loans for borrowers defrauded by their colleges or reinstating the ban on compulsory arbitration agreements in higher education, which was lifted under the administration. Trump at the behest of the for-profit sector.
In 2022, the panel is expected to consider more stringent policies. One step overdue is the reestablishment of the Obama-era “paid employment” rule. Under this rule, vocational training programs had to “prepare students for paid employment in a recognized profession” to be eligible for federal student assistance.
The committee will also determine how to implement the so-called 90/10 rule that Congress revised in a COVID-19 stimulus bill earlier this year. For-profit schools would not be allowed to derive more than 90% of their revenues from federal funding. At least 10% is expected to come from direct payments made by students or from sources other than Uncle Sam’s educational assistance programs, including those for veterans.
The truth is that anything that can be done to tighten the standards of student loan programs and start weaning higher education off tuition money from the government can only help enforce some discipline in matters. spending, cleaning up abuse, and making the university more affordable and sustainable in the long run.
– Chicago Tribune / Tribune News Service