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Rep. John Kline worries new rules will hurt for-profit colleges

WASHINGTON — The Obama administration announced new regulations Thursday requiring for-profit colleges to demonstrate they’ve prepared students for “gainful employment in a recognized occupation,” putting the schools’ federal funding at risk if they cannot.

If a school consistently fails to meet those goals, they are required to send out a series of letters to students explaining why they failed, warning them about post-school debt loads and explaining potential transfer options. If a school fails to meet the new standards three out of four years, it will lose its federal funding.

Rep. John Kline
Rep. John Kline

Harkin greeted the regulations, but indicated he hopes to see more coming in the future.

Comments (11)

  1. Submitted by James Hamilton on 06/03/2011 - 10:46 am.

    I propose one very simple criterion for qualifying a for-profit school for federal student aid: Have you ever denied admission to an applicant because he or she was not qualified for the field of study?

  2. Submitted by Matthew Steele on 06/03/2011 - 11:13 am.

    Well if the for-profit colleges don’t want to play by the rules, they can refuse to accept federal aid. Easy enough.

  3. Submitted by Paul Udstrand on 06/03/2011 - 11:52 am.

    Sure, for profits want to compete, they want to have an education “market”, but they don’t want their consumers to have rights, reliable information, or an consumer advocate. Sounds like banks, and we know how that ended up.

  4. Submitted by Neal Rovick on 06/03/2011 - 11:56 am.

    …According to the Department of Education, for-profit schools that receive federal aid must demonstrate that the meet at least one of the following guidelines: “At least 35 percent of former students are repaying their loans; the estimated annual loan payment of a typical graduate does not exceed 30 percent of his or her discretionary income; or the estimated annual loan payment of a typical graduate does not exceed 12 percent of his or her total earnings.”….

    Those are hardly strict requirements. Money speaks through legislators, in this case the for-profit school’s profit motivating the mouthpieces like Klein.

    The fact is that the US taxpayer is on the hook for more and more guaranteed student loans that cannot possibly be paid back. But hey, what is the taxpayer when you get donations from the for-profit school?

    You can get a 2 year “degree” from a cooking school that will cost $40K/year. Let’s say a student ends up owing $70K, which would be a monthly loan payment of $1000 (each $7 k of loan results in a hundred dollars a month payment). How likely it is a beginner in the food industry will have a discretionary income of $40K per year?

    The math doesn’t work out, the student defaults and the taxpayer pays. Meanwhile the for-profit school made its money when they took the proceeds from the guaranteed student loan. A private enterprise ripoff of the taxpayer.

  5. Submitted by Gerald Abrahamson on 06/03/2011 - 11:57 am.

    “No money” = “not qualified”.

    How many students are turned down for admission when they CAN pay–but don’t meet admission requirements? What *are* admission requirements? Do they have any *other than* the ability to pay?

  6. Submitted by Lora Jones on 06/03/2011 - 11:59 am.

    From a potential employer’s point of view, way too many of these schools, IMHO, not only fail to prepare their students for the work they purport to prepare them for, but all too often misrepresent the prevailing wage a student can expect once they’ve graduated. You see ads saying “earn up to x dollars a year as an accountant,” for example, never mentioning that receiving that amount requires a heckuva lot more than a 2-year associate’s degree. All too many of these schools appear, to me, to work on some diabolical combination of bait-and-switch/ponzi scheme business model. No wonder Kline supports them.

  7. Submitted by Rachel Kahler on 06/03/2011 - 02:12 pm.

    I would like an explanation of how this regulation would be bad. If a student graduating from a for-profit school (or any school for that matter) defaults on his student loan, one must question whether or not we should be funnelling public money into them. If you have the luxury to go to school simply to go to school, find a way to do it on your own dime. But if you go to school to get job-related skills and knowledge and that school fails to provide them to you, then we shouldn’t be rewarding the school.

  8. Submitted by Ray Schoch on 06/03/2011 - 02:43 pm.

    Amen to Neal and Lora (#4 & #6). The proposed requirements are not at all strict, and the amount of money taxpayers are being asked to make up due to loan defaults is substantial, all in the pursuit of what Lora correctly points out is less-than-truthful advertising about prospective income. I also like Gerald’s series of very relevant questions in #5.

    While I’m inclined to agree with the Capella University spokesman that “…the first and most important step in measuring the return on investment for students and taxpayers begins with measuring academic quality, not just debt,” but I’ve seen no compelling evidence that academic quality is significantly superior at for-profit schools. If anything, the evidence leans a bit in the other direction.

    When Campus Progress says “…the rules issued by the Administration, ongoing investigations by state attorneys general, and increasing scrutiny by Congress and the media will ultimately compel for-profit schools to clean up their act or else shut their doors,” I’m not at all disturbed by the prospect of some for-profit schools being forced to cease their operations.

    Mr. Kline’s support for private diploma mills and collegiate-level rip-offs is, shall we say, unfortunate. Ideologically pure, perhaps, for someone on the right wing, but educationally unsound.

  9. Submitted by Sheryl christina on 06/03/2011 - 06:47 pm.

    And what about public colleges…do those graduates find jobs 35 percent of the time. I know plenty of people with 4 year degrees from public colleges who either don’t have a job in their field or don’t make adequate money. My daughter just graduated with 4-year in broad English, (middle school, high school)…very few teaching jobs out there…are those public colleges going to be penalized as well?
    BTW: My 25-year-old daugher did not have a child out of wedlock so she actually had to pay for her education (or my husband and I did). Would have been less expensive for us to tell her to get pregnant….but not ethical.

  10. Submitted by Jeff Wilfahrt on 06/04/2011 - 10:05 am.

    John Kline has always to my knowledge gotten his paycheck from the government.
    He’ll always come down on the side of money, every single time.

    Jeff Wilfahrt, Rosemount, MN

  11. Submitted by John Funk on 06/11/2011 - 10:37 am.

    As a previous poster stated, “The fact is that the US taxpayer is on the hook for more and more guaranteed student loans that cannot possibly be paid back.”
    Considering 25% of loans go the the private schools, but more than 50% of the defaults come from those loans begs for explanation. It does not take a genius to figure this out.
    Apparently John Kline falls short on this measure.

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