Parentella

Continued from yesterday…

The crux of the problem, however, is issue number three: the fact that these schools are businesses tied to Wall Street. Wall Street requires that the businesses continually grow and make a substantial profit each and every quarter. Thus, schools are always pressured to enroll more students. Many, many schools have been accused of unscrupulous recruitment practices where they pressure potential students into enrolling, admit non-qualified students with no chance of completing a degree, offer courses in areas where there is no job market, and in some cases, flat out lie to students to get them to sign up.

The schools arrange the students loans, so basically, the recruiter cajoles the potential student to sign on the dotted line, and suddenly the new student is straddled with a massive debt. When the student later decides that they really didn’t want to enroll in school, or realize they are incapable of doing the coursework, that debt doesn’t go away. Numerous law suits have been filed against for-profit schools by former students, former school employees, and by the US government over these practices.

A year and a half ago, the Department of Education (DoE) and congress began to jointly tackle this problem. For 18 months, there were public hearings and negotiated rulemaking sessions in which thousands of people, including unsatisfied former for-profit school students, participated. Of course, the schools, backed by Wall Street, hired an army of lobbyists to try to stop/soften new regulations. On October 28, 2010, the DoE rolled out new regulations, which make it harder for students to to get federal financial aid for these schools and harder for schools to mislead students. Here they are:

• Disclose the percentage of people who graduate and get jobs from each program to potential students prior to enrollment. Also must disclose estimated debt expected to incur and the average income of the job being trained for.

• Up until now, students at any accredited schools are eligible for federal aid no matter what the program. Now, each program within the school will need to be approved by the DoE for financial aid. Only programs with job markets will be approved.

• DoE has more punitive authority to go after schools that deliberately mislead students through deceptive advertising, marketing, and sales practices.

• Banning commission only pay schemes for college recruiters.

• Clarifying exactly what courses are eligible for federal aid, and the amount of aid that is appropriate.

• School regulation falls under state authority, and the DoE is a federal agency, so the DoE cannot regulate the schools themselves. However, they are now requiring more monitoring by the states.

• DoE has committed themselves to do a better job of verifying that the student is indeed eligible for federal student aid. There are several measures outlined, including verifying high school diplomas are real, making sure students are advancing academically at their school, etc.

Parentella wants to hear from you! What do you think of these new regulations? Will they help or hinder disadvantaged students from getting a higher education? Why?

Image credit: http://www.google.com/imgres?imgurl=http://www.uxbridgecollege.ac.uk/images/news/november-2006/graduation-2007-hats2-98.jpg&imgrefurl=http://www.uxbridgecollege.ac.uk/news/october-2007/college-students-celebrate-university-achievements.aspx&usg=__3aF7iVGELmlBuwmH8GNMMLtoSe0=&h=304&w=380&sz=44&hl=en&start=25&zoom=1&tbnid=V3G8kOrcpnmmRM:&tbnh=165&tbnw=206&prev=/images%3Fq%3Dimage%2Bcollege%2Bstudents%26um%3D1%26hl%3Den%26sa%3DX%26rlz%3D1C1DVCA_enUS329US330%26biw%3D1220%26bih%3D1012%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=146&vpy=394&dur=1595&hovh=201&hovw=251&tx=115&ty=109&ei=TUzrTInuOYjWtQOWtomgDw&oei=R0zrTLHzDYGWsgOav9zwDg&esq=2&page=2&ndsp=25&ved=1t:429,r:0,s:25

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Christi Grab is Parentella’s Editorial Director and author of  The Unexpected Circumnavigation: Unusual Boat, Unusual People Part 1 – San Diego to Australia.  She is currently working on book two of the series.

Related posts:

1. Why the Feds Changed the Student Loan Rules, Part 1
2. Community College Initiatives by President Obama
3. Building Student Confidence: Part 5
4. Building Student Confidence: Part 1
5. States Not Using Aid Money for Teachers

Tags: federal student loan reform, for-proft college controversy, private for-profit colleges

This entry was posted on Friday, December 3rd, 2010 at 12:01 am and is filed under Christi Grab, Colleges, Current News, Education Policy, Education Reform, Private Schools. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.