To qualify for federal student aid, the law requires that most for-profit programs and certificate programs at private non-profit and public institutions prepare students for "gainful employment in a recognized occupation." The new rules are part of President Obama’s commitment to help reduce the burden faced by student loan borrowers and make postsecondary education more affordable and accessible to American families.
How are certain programs leaving borrowers with the burden of student loan debt
Too often, students at career colleges -- including thousands of veterans -- are charged excessive costs, but don t get the education they paid for. Instead, students in many of these programs are provided with poor quality training, often for low-wage jobs or in occupations where there are simply no job opportunities. They frequently find themselves with large amounts of debt and, too often, end up in default. In many cases, students are drawn into these programs with confusing or misleading information. The situation for students at for-profit institutions is particularly troubling:
Students who attend a two-year for-profit institution costs a student four times as much as attending a community college.
Eighty-eight percent of associate degree graduates from for-profit institutions had student debt, while only 40 percent of associate degree recipients from community colleges had any student debt.
Students at for-profit institutions represent only about 11 percent of the total higher education population but receive 19 percent of all federal loans and make up 44 percent of all loan defaulters.
How will the new rule help improve outcomes for students
read moreSource: www.whitehouse.gov
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