Five Questions On Regulating For-Profit Colleges

Career College Central summary:

  • Suzanne Mettler is the Clinton Rossiter professor of American institutions in the Government Department at Cornell University. Her new book, “Degrees of Inequality: How the Politics of Higher Education Sabotaged the American Dream,” examines changes in U.S. higher education over the last several decades, arguing that the American higher education system now reinforces problems of inequality rather than trying to solve them. One of the key themes of the book is the way “for-profit” colleges take advantage of and perpetuate a complex system of government subsidies. The U.S. Department of Education is proposing new rules on for-profit colleges, and finished gathering public comments this week. Mettler responded to five questions about the politics behind these proposed regulations.
  • Question: The Department of Education is proposing new rules requiring that for-profit colleges meet a “gainful employment” standard. You discuss the history behind these rules in your book. Why does the department need to make new rules, given that it laid out similar standards a few years ago?
  • Suzanne Mettler: The for-profit colleges comprise the most rapidly-growing sector of higher education, now enrolling 13 percent of U.S. college students. Today the sector utilizes one in four federal student aid dollars and accounts for nearly half of all student loan defaults. The federal government is therefore obligated to hold this sector accountable, both to students and taxpayers. Yet it has been dwelling in something of a regulatory vacuum because Congress loosened existing regulations between 1998 and 2006, and then in 2012 a federal judge invalidated rules created by the Department of Education in 2011.
  • To their credit, the for-profit schools take in primarily low-income and minority students, but many end up worse off than if they had never enrolled. Nearly all (94 percent) borrow to afford the steep tuition, typically double what public universities and colleges charge. Later on, even if they are among the 22 percent who manage to graduate, they have an extremely hard time finding jobs that permit them to repay their student loan debts, at a median level of $33,000.

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