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For-profit Higher Education
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.
The Justice Department has launched a probe into whether Bridegepoint Education, the owner of Ashford University and the University of the Rockies, is violating a law that prohibits for-profit colleges from getting more than 90 percent of their operating revenue from federal student aid funding.
The Obama administration is moving ahead with a new regulation that could make it easier for students to seek forgiveness of their federal student loans. The proposal is roiling the higher education industry, with the backlash particularly fierce among for-profit colleges that feel they are being singled out.
As the Obama administration cracks down on for-profit colleges, three former officials working on behalf of an investment firm run by President Barack Obama’s best friend have staged a behind-the-scenes campaign to get the Education Department to green-light a purchase of the biggest for-profit of them all — the University of Phoenix.
The Obama administration has agreed to forgive $171 million in student debt held by former students of the defunct Corinthian Colleges Inc., the toll of a for-profit school boom that is likely to grow as the government continues to investigate schools accused of fraud.
In a rare vote on Thursday, a federal advisory panel recommended denying recognition to the Accrediting Council for Independent Colleges and Schools, a much-maligned accrediting agency.
Kevin Carey writes: Currently, higher education consumer protection relies on a combination of state regulation, accreditation and market forces to ensure quality. The failures of ACICS-accredited colleges, along with many other for-profit and nonprofit colleges with low graduation and student loan repayment rates, suggest that the system often doesn’t work.
The Education Department has created new data reports on the performance of accrediting agencies, using measures such as graduation and loan repayment rates at colleges the agencies oversee.