Tuesday, July 03, 2012

Ruling Allows For-Profit Colleges To Continue Bilking Students

People who are considering higher education better think twice about going to a for-profit institution. You're more likely to end up with a whole load of debt and nothing to show for it since the degrees offered aren't worth the paper they're printed on.

And a ruling allows for-profit colleges to continue bilking their students with degrees that aren't worth the paper they're written on and can continue to get federal student loans to cover the costs (even as the students can't repay since they can't land jobs due to having degrees that aren't worth the paper they're written on).
Congratulations are in order for the for-profit college industry, which won a major court ruling this week—a judge ruled that the Department of Education could not penalize these fake schools just because they routinely destroyed the financial future of their graduates. Here are the outrageous DoE rules, which were struck down as "arbitrary and capricious," via the WSJ:

The rules would have required that a school meet one of three requirements for three of four years, or lose access to federal student aid: at least 35% of recent graduates are repaying their loans; loan payments eat up no more than 12% of graduates' average annual earnings; or payments consume no more than 30% of graduates' average discretionary income.
The problem is even worse when you consider that 10% of students nationwide are enrolled in for-profits, but they take 25% of federal student loans, and account for 50% of defaults (and see here).

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