The for-profit sector has about 8 percent of those enrolled in higher education, according to the Education Department, but it has 15 percent of subsidized student loans.
While some career training schools delivered as promised, critics argued that too many burdened veterans, minorities and low-income strivers with unmanageable tuition debt without equipping them with jobs and skills that would enable them to pay it off.
After years of growing complaints and lawsuits, the agency moved aggressively to end abusive practices that ranged from deceptive advertising to fraud and cost students and taxpayers billions of dollars.
Two mammoth chains collapsed — Corinthian Colleges in 2015, and ITT Technical Institute in 2016 — leaving thousands of students stranded without degrees and in debt. Overall enrollment in for-profit institutions declined from 2.4 million in 2010 to 1.6 million in 2015 as hundreds of campuses closed. And as the largest provider of student loans, the federal government was left to bail out the defrauded.
Just weeks before Mr. Trump took office, the department identified 800 failing programs by applying its new “gainful employment” rule, which links vocational schools’ access to federal funds with their record on job placement and earnings. Ninety-eight percent of the programs were at for-profit colleges.
The Education Department, using this tool and others, ultimately has the power to punish egregious violators by cutting off federal financial aid — the industry’s lifeblood — with the efficiency of a guillotine.
Ms. DeVos suggested she was unlikely to play the executioner, though, when asked at her confirmation hearing about rules like gainful employment. “I will review that rule and see that it is actually achieving what the intentions are,” she said. “The last thing any of us want is to unnecessarily close down important programs.”
Asked for elaboration from Ms. DeVos for this article, the Education Department offered no comment. But others have offered more explicit assurances to the industry.
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Wednesday, February 22nd 2017 at 2:38PM
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