Can You Afford to Go To A For-Profit College?
On September 10, 2012, the Huffington Post reported that for-profit colleges are complaining that they should not have to tell prospective students whether they are likely to afford their debts after attending school.
For-profit schools get the majority of their revenue from the federal government, primarily from federal student loans and Pell grants.The Obama administration for the past three years has worked hard on new criteria to gauge whether for-profit schools are actually preparing students for good careers that would allow them to repay their debts or whether the for-profit schools are leaving the students with huge debt loads and few job prospects.
The Association of Private Sector Colleges and Universities (APSCU) argued in court filings that the new student debt disclosures would not provide “any meaningful information to prospective students.”The Department of Education replied: “Plaintiff’s assertion that… information on a program’s repayment rate and debt-to-income ratios will not be meaningful to students is nonsense.”The department stated that many, if not all, prospective students would find the new student debt disclosures to be valuable information to have in deciding whether to enroll in a for-profit college.
Many for-profit colleges fare poorly on student debt measurements, with nearly two-thirds of all programs failing to meet expectations in at least one of three tests laid out by the department: “1) at least 35 percent of students are repaying a minimal amount of their student loans; 2) graduates have loan debts that comprise less than 30 percent of their discretionary income; or 3) graduates’ student debts are less than 12 percent of total earnings.”
U.S. District Judge Rudolph Contreras struck down much of the regulation in June stating that the department didn’t have the research to back up part of the rule.The Education department asked Contreras “to reinstate parts of the rule that would require schools to at least report data showing how many students are repaying loans and how their loan debts will compare to earnings after graduation.”For-profit schools could be cut off from federal student aid if the schools fail the department’s guidelines three times in four years.
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