New Rules on For-Profit Colleges

For-profit colleges and universities have faced severe criticism over the past several months. The entire for-profit industry has been accused of under-performing and over-profiteering, often leaving students in heavy debt. But on Thursday, for-profit stock prices edged higher as the Obama administration announced lessened restraints on the rules governing the for-profit industry.

The rules are based on a study that began in late 2009 to address modifications in the degrees and programs of study offered by for-profit colleges and to prompt changes in enrollment and advisement policies at for-profit schools, many of whom have been accused of heavily marketing their programs to garner higher profit margins. The final rules will go into effect this coming July 2011; the Obama revisions are the latest in a string of changes to the rules.

The rules will undoubtedly undergo additional changes before final implementation. Aimed to control the claims for-profit schools make to prospective students on job availability post-graduation, the rules will need modification to address the eligibility of for-profits and their students to receive federal financial aid. Stay tuned here for further updates.

Photo Credit: Clyde Robinson