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For-profit Higher Education
The New York Times Editorial board writes: These plans can allow borrowers with low income or high debt — or both — to pay less each month, or even nothing, until their finances improve without being penalized or going into default. But many borrowers never even hear about these payment plans, thanks to poor customer service by the companies that are paid more than $600 million a year by the government to manage these accounts, process monthly payments and enroll distressed borrowers in alternative repayment plans.
Several for-profit colleges have recently restructured as nonprofit entities. But a new report argues that some of them now act like "covert for-profits" and that their backers profit in ways that are not standard at traditional universities.
The federal Consumer Financial Protection Bureau said Tuesday it is weighing new rules governing the $1.3 trillion student loan market after releasing a stinging report documenting "widespread failures" in an industry largely overseen by the Obama administration.
The St. Louis, Mo., Post-Dispatch Editorial Board writes: Serious reform and regulation of the for-profit education sector are clearly needed. Missouri’s congressional delegation should understand the problem better than most. It should take the lead on finding a solution.
The biggest player in the rapidly expanding boot camp and coding academy space, General Assembly, has been through the regulatory approval process in eight states so far. And the experience hasn’t been too painful. In fact, company officials said it has helped them cope with General Assembly’s growth.
“While average debt burdens have increased and some borrowers have accumulated very large balances,” Looney and Yannelis allow, “most borrowers with large balances are graduate students, parents, and ‘independent’ undergraduate borrowers, largely at for-profit schools.” One consequence of heavy graduate borrowing, the researchers found, is that borrowers in the top 20% of the income distribution owe more than one-third of outstanding student loan debt.
The idea of students graduating from college with just a diploma — a single academic credential — could soon seem downright quaint. At some institutions, it already is.
Some of the student activists who are urging the U.S. Department of Education to grant more sweeping loan forgiveness for debt incurred at the now-defunct Corinthian Colleges campuses are set to receive $4 million to continue to press their case -- and possibly haul the department into court over the issue. A bankruptcy judge on Wednesday approved Corinthian’s plan to liquidate its assets, earmarking about $4.3 million for a special fund for former students.The money won’t go to students directly but will instead be used to pursue discharges of billions of dollars of federal student loans.
A number of state and federal agencies are objecting to the broad releases of liability in defunct for-profit college operator Corinthian Colleges Inc.’s chapter 11 liquidation plan ahead of a bankruptcy court hearing Wednesday to consider approval of the proposal.
Many of the nation's largest for-profit college chains have seen enrollments plummet amid investigations into questionable job placement rates and deceptive marketing practices. One crucial source of revenue, however, has remained a constant: military veterans. For-profit colleges have collected $8.2 billion from the latest GI Bill since it went into effect in 2009, according to a Los Angeles Times analysis of government data. Those colleges enroll only 8% of all U.S. students but 30% of the 1.4 million veterans who have used the most recent version of the GI Bill.