Private-Sector Schools Under Pressure

The U.S. Department of Education is stepping up the pressure on for-profit colleges after concerns about their value, escalating enrollments and rising profits.

The department has been working on regulations for these colleges and universities, which it says are designed to protect students and taxpayers.

One of the most scrutinized sections deals with a provision concerning "gainful employment." In other words, how likely is any college, especially one in the for-profit sector, to push a student toward a good job?

The proposed regulations require all postsecondary institutions to let prospective students know their graduation and job placement rates, and they require colleges to provide the department with information on student debt levels and incomes after the program is completed.

Institutions that want to add programs would have to provide five-year enrollment projections, documentation from employers not affiliated with the institution that the program’s curriculum aligns with recognized occupations at those employers’ businesses, and that there are projected job vacancies or expected demand for those occupations at those businesses before new programs become eligible to participate in federal student aid.

The Association of Private Sector Colleges and Universities has been closely watching the department’s process. The regulations originally were to be published this year, but the department pushed that back to early 2011 because of the high number of comments it received on the "gainful employment" provisions.

After a hearing in November, the association issued a statement saying, in part:

"We are gratified that several schools drawn from our sector had the opportunity to present their point of view and explain how the Department of Education’s gainful employment proposal would severely limit choice in higher education, and yet would do nothing to prevent ‘bad actors.’ Postsecondary education is not a one-size-fits-all proposition. When students have choices, interest and motivation increase, jobs and opportunities grow, and the economy prospers."


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