New Rules Aimed At Curbing Abuses At For-Profit Colleges

Sharon Rieger's picture

A series of new federal regulations aimed at ending high-pressure and misleading sales tactics at for-profit colleges take effect this month, as the industry continues to face scrutiny from the state and federal government.

Under the rules, schools no longer will be able to pay admissions employees based on how many students they enroll. They can lose some or all of their financial aid dollars if they, or a company doing business for them, engage in misleading or deceptive advertising. And schools must provide students with data on graduation and job placement rates, as well as the median student debt load.

There also are provisions that prohibit colleges from admitting students who graduated from diploma mills, which the U.S Department of Education defines as entities that provide invalid diplomas, usually for a fee and requiring little academic work. Schools also are prohibited from accepting Ability to Benefit admissions tests that don't meet federal standards.

While many of the U.S. Department of Education rules apply to colleges of all sectors, most are responses to problems reported in the for-profit sector. An undercover Government Accountability Office investigation last summer found abuses at 15 colleges visited. And Florida's attorney general is investigating eight for-profit schools in Florida, with at least nine other states following suit. For-profit colleges also have faced a number of lawsuits filed by students, former employees and shareholders.

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