California’s student aid commission said on Friday that aid funds going to students at for-profit schools should be slashed first when the state cuts its education budget, Reuters reports. The U.S. Education Department has criticized some for-profit schools, which range from universities offering PhD’s to trade schools offering car-repair training, for low graduation rates and high loan default rates. The California Student Aid Commission, which administers financial aid programs, voted unanimously on Friday to put Cal Grant aid to for-profit schools’ students at the bottom of its priority list when the state is forced to make budget cuts relating to education financing…
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For-profit schools cry foul on loan rules
For-profit schools are opposing what they argue is a “retroactive” crackdown on student loan defaults, and said on Thursday that they may challenge the U.S. Education Department in court, reports Reuters. The fight over whether the department can look at default data of students who left school three years ago is the latest twist in a larger battle over new rules aimed at cracking down on tuition loan abuses and ensuring courses lead to gainful employment. A preliminary rule says programs at for-profit schools could lose their eligibility for student loan funding if 65 percent of students default or are shown to be unable to pay their loans. Losing federal aid could cripple some for-profit schools. The Education Department opted to use default data from students who left the programs in previous years. The rule–which is not yet final–is slated to go into effect in mid-2012…
…Read MoreEd Dept moves to pre-empt for-profits who “game” system
The U.S. Education Department’s final rules to rein in for-profit schools, which are accused of failing to educate students while leaving them heavily in debt, would bar incentives to admissions recruiters and limit the creation of new programs, Reuters reports. Early next year, the department will issue the most controversial of the rules, called “gainful employment”, in which schools would be required to show that students are paying back federal loans or capable of doing so. If they can’t, students at those schools would be barred from receiving federal student loans…
…Read MoreSenators spar over for-profit education
A U.S. Senate committee probing allegations that some for-profit schools push students into big debt and fail to educate them likely will introduce a bill tightening rules next year, Reuters reports. Sen. Tom Harkin, D-Iowa, chair of the Senate Committee on Health, Education, Labor, and Pensions, said at a hearing that he was determined to stamp out abuses at the schools, which often offer training in jobs like installing central air conditioning or running a doctors office. “We will be having yet another hearing in early December, and then be looking at sometime next year coming up with some kind of legislative changes,” said Harkin. During the third hearing on the subject, Harkin sparred with Republican Sen. Michael Enzi, who argued that dropping out and defaulting on student loans—which critics say are rife at for-profit schools—were common at all schools. “It’s naive to think these problems are limited to just the for-profit sector,” he said, pointing to large debts owed by many law school graduates. “We’re just looking at this in a vacuum, and that’s not fair.” For-profit schools, which include many of the nation’s largest online universities, have been battling an Education Department effort to bar financial aid to students in a program if too many former students fail to pay the principal on their federal loans…
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