Obama Said to Delay For-Profit College Loan Rule
By John Hechinger
June 11 (Bloomberg) -- The Obama administration is delaying the release of a proposed rule that would cut federal financial aid flowing to for-profit colleges, Congressional aides said today. Analysts said the move means the government may back away from a regulation the industry is fighting.
The proposed rule, known as gainful employment, would disqualify Apollo Group Inc., ITT Educational Services Inc., Career Education Corp. and other for-profit colleges from receiving grants and loans if their graduates spend more than 8 percent of their starting salaries repaying student loans. Analysts said they had expected the rule to be released next week. The aides declined to be named because they said weren’t authorized to release the information.
Federal aid to for-profit colleges jumped to $26.5 billion last year from $4.6 billion in 2000, according to the Education Department. Students attending for-profit schools are defaulting on their federal loans at a higher rate than those at traditional schools, according to the department.
Monday, June 14, 2010
Obama Admin. Backing Down?
Let's hope the delay on rules for for-profit colleges (err, diploma mills) is due to the DOE's need to gather a bit more information and not a retreat from their previous position.
Posted by Ken Libby at 11:01 AM