The Department of Education today released long-awaited new regulations meant to curb abuses in higher education. As we’ve been documenting, for-profit colleges — schools like the University of Phoenix or Kaplan University — have been collecting 90 percent of their revenue from the federal government while leaving their students buried in debt and with bleak job prospects. (For more background on this issues, see our primer, “For-profits, not students.”)
The new regulations are intended to cut off higher education programs from federal money if too many of their students can’t find good jobs and default on their loans. However, after months of intense lobbying by the for-profit schools, their front groups, and conservative lawmakers, the new rules are significantly weaker than draft rules first proposed by the Education Department last year.
The administration’s line of thinking seems to be that this is a first step that actually stands a chance of being implemented with minimal interruption from Capitol Hill and that more could always be done later. As Inside Higher Ed explained, the rules extend compliance time for the schools and weaken some requirements when it comes to student debt-load:
Compared to the original proposed regulations, the new rules will kick in later, give colleges more chances to fix problems and loosen several requirements on measuring debt and repayment. The first year that programs could lose eligibility is now 2015, three years later than previously proposed, and data collection will not begin until 2012. [...]
In the final regulations, the restricted status has been eliminated and replaced with the “three strikes” rule, which department officials say is closer to its policies in other areas, such as on student loan default rates. Colleges would have to fail to meet each of the criteria for three years out of four. In the meantime, they would not face enrollment caps.
Harris Miller, president and CEO of the Association of Private Sector Colleges and Universities, the industry’s largest trade group, said the Education Department “clearly listened to a lot of the concerns.”
For-profit colleges launched an unprecedented lobbying campaign in an attempt to water down these rules, pushing lawmakers on both sides of the aisle to voice their opposition to common-sense regulations. The industry spent more than $8 million lobbying in 2010 — doubling its total from the year before — and donated millions to key members of Congress. This included $100,000 to House Education Committee Chairman John Kline’s (R-MN) election campaign. ThinkProgress’ Lee Fang has much more on the industry’s lobbying war to maintain its access to federal dollars, including its extensive astro-turf efforts.
As CAP’s Julie Morgan, a policy analyst with the Postsecondary Education Program, explained, the rules are “a step toward holding colleges accountable for how they serve both students and the public, but the longer it takes to eliminate the worst career education programs, the more students end up mired in debt and without a way to climb out.” The for-profit industry is currently facing a probe by attorneys general in 10 states, and one of the industry’s biggest actors, the Education Management Corporation, is under investigation for allegedly illegal recruiting practices.