Feds resume effort to regulate for-profit colleges on their ‘gainful employment’ record

The Obama administration resumed a controversial effort Friday to regulate for-profit colleges and certain others that offer career-training programs to help graduates obtain “gainful employment.”

From 2009 to 2011, the administration engaged in a sharp debate with the for-profit education sector and its allies over proposals to crack down on programs that leave graduates with heavy debts that they are unable to repay.

The Education Department issued a rule in 2011 that defined standards for loan repayment rates and the ratio of a graduate’s debt to income. Programs that failed the standards were in jeopardy of being disqualified from participation in the federal student aid, which would essentially shut them down.

But a federal judge in 2012 blocked major provisions of that rule, forcing the department to rethink its strategy.

Now the gainful employment rule has been redrafted, and the department has set a schedule for negotiations with representatives from for-profit colleges and others with a stake in the effort. The first meetings will be held Sept. 9-11. The department says its draft is “a starting point for discussion.”

A quick look at the draft found that it includes standards for debt-to-earnings rates and other language that could generate significant debate. A chart prepared by the department indicated that 974 programs, or 9 percent of 11,359 nationwide, could be found to be “failing” to meet standards in the draft.

The gainful employment issue encompasses for-profit colleges and non-degree career programs at public and private, nonprofit colleges.

Among the largest for-profit post-secondary institutions are the University of Phoenix, Ashford University and the American Public University System.

The Washington Post Co. owns the Kaplan network of for-profit colleges.

Nick Anderson covers higher education for The Washington Post. He has been a writer and editor at The Post since 2005.



Success! Check your inbox for details. You might also like:

Please enter a valid email address

See all newsletters

Show Comments
Most Read Local



Success! Check your inbox for details.

See all newsletters

To keep reading, please enter your email address.

You’ll also receive from The Washington Post:
  • A free 6-week digital subscription
  • Our daily newsletter in your inbox

Please enter a valid email address

I have read and agree to the Terms of Service and Privacy Policy.

Please indicate agreement.

Thank you.

Check your inbox. We’ve sent an email explaining how to set up an account and activate your free digital subscription.