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For-Profit Colleges In White House Crosshairs


The Department of Education's "gainful employment" rule, if finalized, would end federal financial aid to schools whose graduates have high student-loan debt relative to their incomes. It would apply to virtually all programs offered by for-profits as well as any non-degree program for public and private nonprofit universities.

It's the administration's second try. A federal judge in 2012 shot down its first attempt to limit financial aid to post-secondary schools. The public comment period on the latest proposal ended last month.

Critics say that for-profit college administrators are scam artists who game the system, padding their pockets at taxpayer expense, leaving low-income students buried in debt and saddled with worthless degrees.

"The profit motive is very powerful. It can result in dangerous and irrational decisions based on short-term gain," said Barmak Nassirian, director of federal regulations and policy analysis at the American Association of State Colleges and Universities.

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