At first, the news can sound potentially devastating ñ the U.S. Department of Education has unveiled its plans to propose new regulations on for-profit institutes of higher education. These regulations would limit the amount of federal aid that colleges and universities can receive, particularly those whose students cannot repay their student loans within a given amount of time. Yet, upon closer examination, these regulations can actually greatly benefit students who are enrolled in or looking to enroll in degree programs from a for-profit school.
Many online schools are for-profit institutions, including the popular University of Phoenix and DeVry University. Unfortunately, students who attend these schools tend to take on high student loan debts. College is expensive, even when students are paying less to take classes online than moving to an out-of-state campus-based school. In addition, students who receive financial aid while enrolled in a for-profit school are more likely than others to default on their loans, according to an article published in the New York Times. For this reason, the Department of Education has been developing regulations that would limit the amount of aid that for-profit schools receive based on whether a graduate of the school can repay his or her student loans.
If a school’s graduates cannot repay their student loans within a decade with a starting salary, then the school risks becoming ineligible for federal student aid, which would undoubtedly prevent many students from enrolling in that school’s programs. In addition, the debt must be repayable with only 8% of his or her starting salary. The Career College Association, which represents 1,450 for-profit colleges, is protesting the upcoming regulations as being unnecessary and restrictive. Yet, the move to regulate for-profit institutions shows a real need for these schools to cut down on how much it charges students to earn a degree. With the added pressure of possible federal aid cuts and the inevitable student enrollment reduction that would come with such a drop, for-profit schools will be forced to cut down on program costs as well as craft better educational courses to better prepare graduates for work after college.
These regulations are meant to ensure that students who attend and graduate from for-profit schools are getting their money’s worth. After all, for-profit institutions are beginning to see more and more students enroll, and with so much taxpayer money being pumped to fund these students’ educations, it is important to make certain that only the schools that adequately prepare students for professional work receive valuable aid.
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