House Republicans Propose Amendment To Spending Bill Blocking New Regulations For Subprime Schools

House Republicans plan to bring their continuing resolution — which provides funding for the government for the rest of the fiscal year — to the floor today for amendments. Of course, such a process invites amendments having to do with a variety of unrelated issues, and this round is no exception.

For instance, one amendment proposed by House Education Committee Chairman John Kline (R-MN) would prevent the Education Department from following through on new regulations governing the for-profit college industry:

Offered By: Mr. Kline

AMENDMENT NO. 214: At the end of the bill (before the short title), insert the following:

Sec. __X. None of the funds made available by this Act may be used to–

(1) implement, administer, or enforce the final regulations on “Program Integrity: Gainful Employment–New Programs” published by the Department of Education in the Federal Register on October 29, 2010 (75 Fed. Reg. 66665 et seq.);

(2) issue a final rule or otherwise implement the proposed rule on “Program Integrity: Gainful Employment” published by the Department of Education on July 26, 2010 (75 Fed. Reg. 43616 et seq.);

(3) implement, administer, or enforce section 668.6 of title 34, Code of Federal Regulations, (relating to gainful employment), as amended by the final regulations published by the Department of Education in the Federal Register on October 29, 2010 (75 Fed Reg. 66832 et seq.); or

(4) promulgate or enforce any new regulation or rule with respect to the definition or application of the term “gainful employment” under the Higher Education Act of 1965 on or after the date of enactment of this Act.

The new regulations — known as “gainful employment” — would prevent these subprime schools, and programs at other universities, from accessing federal dollars if their graduates fail to meet a certain debt-to-income ratio or have high rates of student loan default. Currently, just 11 percent of higher education students in the country attend for-profit schools, yet they account for 26 percent of federal student loans and 44 percent of student loan defaults. The latest data shows that 25 percent of for-profit college students default on their student loans within three years.

As we’ve shown here and here, many for-profit schools engage in predatory lending, use aggressive and misleading recruiting tactics, and leave students buried in debt and without prospects for finding a good job. They make the overwhelming majority of their revenue from the federal government and pay their executives exorbitant amounts, without proper accountability. However, House Republicans, particularly Kline, have been going all out to protect these schools from regulation, and are now trying to use the necessary act of funding the federal government to further that agenda.