WASHINGTON, March 13 President Barack Obama will
issue rules on Friday aimed at cracking down on low-performing
for-profit career training colleges the administration says bury
students under mountains of debt and fail to prepare them for a
The Department of Education will announce rules making it
harder for "predatory, poor performing" schools to get federal
funds, White House and department officials said on Thursday.
The government provides $26 billion in federal loans and $10
billion in grants annually to schools that prepare students for
gainful employment, officials said. The vast majority of that
funding goes to for-profit institutions that attract students
with extensive marketing.
But the administration says the track record of many such
schools in preparing students is poor even as it proves costly
for enrollees, many of whom are low-income or military veterans.
"Students in these low-performing programs often end up
worse off than before they enrolled," Education Secretary Arne
Duncan told reporters.
The trade association representing for-profit colleges
argues that administration efforts to rein them in would limit
access to job training for hundreds of thousands of students.
White House officials said the average debt for the graduate
of a for-profit program was over $23,500, yet almost
three-quarters of the programs analyzed by the administration
produced graduates who on average earned less than high-school
While students at for-profit colleges make up only about 13
percent of the total higher education population, they account
for 31 percent of all student loans and nearly half of all
defaults, officials said.
The administration would take away federal funding for
career training colleges if a graduate's loan exceeds 8 percent
of earnings or if the loan default rate exceeds 30 percent.
The White House estimates that 1 million students are
enrolled in programs that would either lose their funding under
the new rules or face the loss of government support unless they
improve their performance.
A U.S. district judge struck down the administration's first
efforts to tighten rules on the for-profit career training
industry in 2012, calling them arbitrary. The administration
says the rules to be announced on Friday use clearer standards
to judge whether career colleges are delivering quality
The Association of Private Sector Colleges and Universities
says on its website that restrictions on the career colleges
would disproportionately affect minorities, veterans, and