University of Phoenix, San Antonio

The government is tightening controls on for-profit colleges in an effort to stem growing levels of student dept. The new regulations are designed to protect students from misleading recruitment tactics and from accumulating large loans. Some reports say that after 15 years, 40 percent of students attending for-profit schools will default on loan payments. A high percentage of these students are recipients of federal loans.

“These schools — and their investors — benefit from billions of dollars in taxpayer subsidies, and, in return, taxpayers have a right to know that all of these programs are providing solid preparation for a job,” said Arne Duncan in a July 23 statement.

The regulations, known as the Gainful Employment proposal, will require for-profit schools to disclose their past graduation rates and history of job placement. It will require that new programs seeking federal aid must prove that the program will actually give students in-demand skills in growing industries. The proposal also prevents colleges from paying recruiters based on the number of students they enroll.

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Student loan debt is something that can haunt you literally for the rest of your life- especially if you allow yourself to take out multiple loans for more money than you actually need.

Since student loans have to be paid back whether you graduate or not, many people find themselves unable to pay back the debt after spending it. There are no guarantees that even with a college degree you will receive a job that pays you enough to afford the loan payments plus the interest. With the current state of the economy in the U.S. and people without jobs, many people are unable to pay back their student loans which sends them into default. Read the rest of this entry »