For-profits: two new rules that really matter
The Obama administration on Tuesday proposed 14 new rules to curb abuses in the for-profit sector of higher education. Most of the debate, though, has focused on two.
The rules cut to the heart of how the for-profits do business -- or don't. Industry leaders say the sector is well-run and regulated quite enough already. They complain of death by a thousand anecdotes via a series of recent press accounts that highlight disgruntled former students and employees. Critics allege a pattern of abuse, of which the alleged horror stories are merely illustrations.
(Disclosure: the for-profit industry includes Kaplan, owned by the Washington Post Co.)
One new rule would halt over-zealous recruiting tactics by some for-profit colleges, by barring the industry from compensating recruiters on the basis of how many students they bring in.
The other would require vocational programs to yield "gainful employment," as measured by the ratio of salary to loan debt among graduates. This rule would cut federal aid to for-profit schools if graduates spent more than 8 percent of their starting salaries on loan