for-profit colleges

for-profit colleges

For-Profit Colleges Sue Obama Administration, Again

A new set of rules designed to regulate for-profit colleges caused industry lobbyists to file a lawsuit against the Obama administration. According to the lobbyists, the rules are arbitrary and unconstitutional.

courtroom

The rules released the last week of October are an amended version of the gainful employment regulations proposed by the Obama administration earlier this year.

Under the rules, for-profit colleges would not receive federal funding for career training programs if their graduates graduate with a lot of debt but find only low-paying jobs.

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For-Profit Schools Sue the U.S. Secretary of Education

For-profit colleges have been taking a lot of criticism lately for their questionable marketing practices and deceptive methods to get students to qualify for financial aid. Now these schools are fighting back and have launched a lawsuit against the U.S. Department of Education.

The Association of Private-Sector Colleges and Universities has filed this lawsuit to undo the new regulations that are set to take place on July 1 citing them as unconstitutional. The rules have been put in place to stop recruiters from being paid based on the number of students they enroll, and to eliminate deceptive advertising by schools. The new regulations are part of a large package designed to stop schools from producing students that are poorly educated and in a large amount of student debt.

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Apollo Stock Falls after U.S. Investigation of Financial Aid Process

university of phoenixApollo Group Inc. is the largest education company out there when you are speaking in enrollment numbers. Unfortunately for Apollo, their stock has hit its lowest point in four years once word was released that the U.S. Department of Education will review financial aid practices at the University of Phoenix which is an Apollo school.

Apollo’s stock price fell 3.8 percent when the announcement was made. The review will start on December 6 and is set to cover the 2009-10 and 2010-11 school years. This is not the first time this type of review has taken place where the University of Phoenix is concerned. There was a similar investigation in February of 2009. Read the rest of this entry »



Government to Tighten For-Profit Schools

University of Phoenix, San Antonio

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 Default Rates on the Rise

loan applicationFeb. 11, 2011 is the day my first student loan payment is due and like most students, I’m dreading repayment. While some students can handle the monthly amount, others are struggling to find work and the income to pay off their debt. In a tough job market, it’s no surprise that the student loan default rate continues to increase.

Education secretary Arne Duncan released a statement last Monday saying that he isn’t happy with the continued rise of student loan default rates. He attributes a significant amount of default rates to for-profit colleges, like the University of Phoenix or National American University.

“While for-profit schools have profited and prospered thanks to federal dollars, some of their students have not,” Duncan said in a statement on Sept. 13. “Far too many for-profit schools are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use.”

Duncan said that as of the 2008 fiscal year, the most recent period for which data is applicable, the total student loan default rate was 7 percent. The fiscal year before that, it was 6.7 percent. And before that it was 5.2 percent. Read the rest of this entry »





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