A federal court ruled on Tuesday that the Department of Education (ED) has the right to require colleges to demonstrate college graduates make enough money to repay their student loans, The Associated Press reported.
That ruling was a blow to the for-profit college system and will force programs to show that the loan payments of the average graduate won’t be more than 20% of their discretionary income or 8% of total earnings.
The ED sees the ruling as a major win for upholding its regulatory enforcement powers. “Today’s decision is a win for America’s students and taxpayers,” Secretary of Education Arne Duncan wrote in a statement released to the press. “Far too often, so-called career colleges leave students burdened with debt they will never be able to repay and stick taxpayers with the bill.”
But advocates who work to diminish the reach for-profit colleges are more cautious about claiming victory. “I think it is a turning point,” attorney David Halperin told Business Insider.
“But I think there is a still a long way to go and there’s still the possibility that by acting aggressively, the for-profit colleges can end up going back to their bad behaviour,” Halperin, the author of “Stealing America’s Future: How For-Profit Colleges Scam Taxpayers and Ruin Students’ Lives,” added.
Halperin explained that lobbyists are fighting hard in Congress to overturn rulings that put restrictions on for-profit schools. Still, he believes that the recent awareness about the practices of some for-profit schools has been crippling to the industry and is beneficial for students who consider attending.
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