Trump Administration—Supporting Oversight of For-Profit Colleges?
It is too early in the four-year term of President Donald Trump to be sure of anything or to take a deep breath of relief. But last month there was one encouraging sign from the Trump Justice Department. Contrary to what can only be described as excited anticipation by the operators of for-profit colleges of the rollback by Trump’s people of Obama’s regulations, attorneys at the Department of Justice filed a legal brief supporting one of the Obama administration’s most effective rules to reign in the for-profits—a rule that is unpopular across the for-profit sector.
The Trump administration’s legal brief defends what’s known as the gainful employment rule, which has penalized some of the very worst for-profit colleges and trade schools that depend on federal Pell Grants and federally backed loans for the bulk of their revenue but that fail to provide adequate training to enable their graduates to land jobs or pay off their debts. The gainful employment rule is intended to protect student-borrowers from debts they will never be able to pay off and to to prevent a massive loss of tax dollars when borrowers with untenable debts eventually default.
Here is Suzanne Mettler in Degrees of Inequality, her book (published in 2014) on the problems of for-profit colleges. Mettler describes the gainful employment rule as perhaps the most highly contested of the Obama administration’s efforts to crack down: “In what turned out to be their most controversial proposal, the so-called gainful employment rule, they set out to limit federal student aid to schools that failed to establish a record of positive outcomes for their students, as indicated by measures of their subsequent earnings relative to their student loan debt and by their loan repayment rates… Defenders of for-profit universities champion them as belonging to the private sector, but in recent years as in the past, they receive nearly all of their revenues from the U.S. federal government.” Mettler documents the percentage of federal funding at fifteen of the largest for-profits: “Notably, these institutions, with only one exception earned between 60.8 and 85.9 percent of their total revenues in 2010 from Title IV of the Higher Education Act, meaning predominantly student loans and Pell grants… Most received an additional 2 to 5 percent from military educational programs, including the post-9/11 GI Bill. The sum of these federal government funds added up, as a portion of all revenues collected, to a minimum of 65.8 percent for ITT and a maximum of 93.7 percent for Trump Administration—Supporting Oversight of For-Profit Colleges? | janresseger:
