Department of Education Rule to Rein in Abuse at For-Profit Colleges Doesn’t Go Far Enough

Media Contacts
Rich Williams

U.S. PIRG Education Fund

Yesterday, the US Department of Education took the first step in reining in abusive practices at for-profit colleges which pile deep debt onto their students in exchange for questionable credentials.  It issued a new rule that sets a standard for these schools: their programs have to ensure graduates can earn enough to pay off the hefty student loans they must carry to pay for their enrollment. 

The price tag for these colleges is so high that about half of all borrowers who default on their student loans attend for-profit colleges.  The quality of the education is so weak that, in one survey, 57 percent of students departed without a diploma.

Meanwhile, taxpayers are picking up the tab by underwriting billions in federal student loans and grant aid that pour into these colleges.  About one in ten college students attends a for-profit college, but these colleges absorb one in four federal loan and grant dollars.

USPIRG is disappointed that the new standard doesn’t go into effect soon enough, nor is it strong enough to adequately clean up the industry on behalf of student loan borrowers.  We look forward to pushing for further reform with supporters on Capitol Hill and in offices of Attorneys General across the country.

To read more about the issue and the rule, visit