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U.S. Department of Education issues new regulations for for-profit colleges

WASHINGTON — The Department of Education on Thursday issued regulations governing for-profit colleges, a rapidly expanding education sector that has been criticized in Congress for allegedly providing students with a poor education and excessive debt.

The department delayed releasing one of the more controversial proposals concerning "gainful employment," which would eliminate federal aid to programs that create high student debt and low loan-repayment rates.

Issued after a year of negotiations, the new regulations are intended to improve the Education Department's ability to monitor the institutions, including compensation for recruiters, and its ability to take action against schools engaging in deceptive advertising and marketing.

The regulations will take effect in July 2011.

While the Education Department postponed finalizing "gainful employment" regulations, Thursday's announcement did include a provision that requires for-profit colleges to provide prospective students with program graduation and employment rates, provide the department with reports on student debt and incomes, and provide notice when introducing a new program.

"These new rules will help ensure that students are getting from schools what they pay for: solid preparation for a good job," Secretary of Education Arne Duncan said in a statement.

Students enrolled in for-profit colleges account for 26 percent of all student loans and 43 percent of loan defaulters, according to the department.

Report: Net price of college is lower

A new report from the College Board says the net price of college tuition and fees, after factoring in student aid and inflation, is actually lower now than it was five years ago. Tuition and fees rose 7.9 percent between 2009 and 2010 at public universities for in-state students and 4.5 percent at private, four-year, nonprofit colleges, says the annual report, "Trends in College Pricing," released Thursday. But the past year also saw a massive investment in public and private aid, enough to erase most of the increase, at least for students who receive aid. The average yearly net price of public four-year universities in tuition and fees, after discounting grant aid and tax benefits, declined from $2,080 to $1,540 in inflation-adjusted dollars between 2005-06 and 2010-11, says information from the national College Board survey. The comparable private college price fell from $12,750 to $11,320.

U.S. Department of Education issues new regulations for for-profit colleges 10/28/10 [Last modified: Thursday, October 28, 2010 10:38pm]
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