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For-profit Higher Education
The federal Department of Education imposed strict new rules on Thursday on one of the nation’s largest for-profit education companies, ITT Educational Services, barring it from enrolling new students who use federal financial aid and ordering it to pay $153 million to the department within 30 days to cover student refunds if its schools close down.
Raul Valdes Pages writes: If the CBEs were employer-developed and so were the assessments, I would have more faith that students would eventually benefit. If the assessments are instead internally developed by schools, I am afraid that at a time when online education still seems suspect, we might be adding additional risks.
The Department of Education denied a request from the Center for Excellence in Higher Education, a Utah-based chain of career colleges, to switch its status to nonprofit for federal financial aid, leaving the chain unable to shake loose regulations aimed at for-profit schools.
Now lead generators have a new market: conventional nonprofit colleges and universities trying to beef up sagging enrollment and lower their recruiting costs.
Charles Kolb, deputy assistant to the President for domestic policy in the George H.W. Bush White House, writes: Another explanation is that the responsible Congressional committees may have looked the other way and failed in their oversight responsibilities. They could easily have continued what was once a bipartisan crackdown on defaults and poor-quality educational offerings at all educational institutions.
A troubled for-profit college network that was led by former Maine Gov. John McKernan controlled a nonprofit foundation in Portland for years that critics say should not have had charitable tax status and may have been designed to help circumvent federal rules governing access to student aid programs.
The Editorial Board writes: For too long, nobody in higher education has been watching the watchdogs. That’s starting to change, thanks in part to Senator Elizabeth Warren of Massachusetts, who has applied pressure to decertify one of the shadiest accrediting bodies, whose approvals allowed exploitative for-profit colleges to grab federal aid dollars and exacerbated the nation’s student-debt crisis.
The Editorial Board writes: The Obama administration has made no secret of its dislike of for-profit colleges, so it comes as no surprise that, with time running out on the president’s time in office, there is a new effort to crack down on the multibillion-dollar industry. But in its zeal to disable the for-profit sector, the administration may be creating a new set of costly problems for taxpayers and the entire higher-education field.
The number of for-profit postsecondary institutions and the number of students they enroll are continuing to wither, according to data released by the U.S. Education Department's National Center for Education Statistics on Thursday. In a new report, the center said that the number of for-profit colleges eligible to award federal financial aid fell to 3,265 last fall, down from 3,436 in fall 2014, a decline of 5 percent. The number of public institutions grew by one and the number of private nonprofit colleges grew by 26 over that year (from 1,883 to 1,909).
Sen. Elizabeth Warren (D-Mass.) and other Senate Democrats are calling on federal regulators to step up efforts to protect consumers from educational programs that engage in fraud and deceptive marketing, in light of the ongoing case against Trump University. In a letter sent Thursday to the heads of the Federal Trade Commission, Department of Veterans Affairs, Consumer Financial Protection Bureau and Education Department, the lawmakers urge the agencies to create an online tool that alerts and warns potential students of companies posing as universities without a state license, charter or accreditation.