NEW YORK POST: Not even DC could help for-profit colleges

Career College Central Summary:

  • In 2012, former Senate Majority Leader Trent Lott was a busy man.
  • For-profit colleges were desperate to beat back efforts by the Obama administration to stem the schools’ abuses and Lott, as a lobbyist for Corinthian Colleges, ITT Education Services and other for-profit higher-educational campuses, was trying to stop the effort dead in its tracks.
  • For-profit colleges get $30 billion a year in student loans and the White House was trying to link the schools’ ability to deliver a meaningful education with their getting access to the loans.
  • For years, the stocks of these for-profit colleges and the salaries of their executives had soared as they flouted Department of Education rules.
  • The schools paid recruiters to boost enrollment, saddling unqualified, low-income students with loans they could never pay back while awarding them useless degrees, a Senate report found.
  • Many of the loans are made to low-income students and end in default. Some were comparing them to the subprime mortgage crisis.
  • The DoE was bent on passing gainful-employment rules — requiring a student’s debt not to exceed 8 percent of their total earnings. About five percent of career education programs wouldn’t meet the standard, it determined.
  • The stocks of these for-profit colleges began to fall once new rules were announced.
  • To try to stop reform, the Association of Private Sector Colleges and Universities — the lobbying group that hired Lott — spent more than $4 million and hired former Bush administration DOE official Sally Stroup.
  • The first gainful employment rule was shot down in court, but a new one was announced Oct. 31.
  • Since then, the stocks of for-profit schools like Apollo Educational Group, Strayer Education and DeVry are off sharply. And for good reason.
  • As of 2012, 88 percent of students at for-profit colleges had loans and their average debt burden reached $39,950, according to the Institute of College Access and Success. At public colleges, the rate was 66 percent, and the loan average was $25,550. At private colleges, it was 75 percent and $32,300.
  • Meanwhile, the tougher regulations weren’t the only headache for the schools.

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