Representative Tom Sannicandro joined his House colleagues Wednesday in passing a bill that protects students who enroll in for-profit occupational schools by expanding oversight of the industry, which has seen exponential growth in enrollment and profits in the last several years.
Sen. Dick Durbin [D-Ill.] recently proposed a bill that would dramatically change the way federal money can be allocated to for-profit colleges. Currently, for-profits are bound by what’s known as the “90-10 rule,” which says that 10 percent of for-profit college and universities’ revenues must come from sources outside of federal student aid. But G.I. Bill benefits can be counted towards the 10 percent, making them a lucrative source of revenue for the for-profits.
A little-known California law has dealt a blow to nearly half of the for-profit college campuses in the state, barring them from offering students a coveted Cal Grant this year.
It hasn’t gotten much attention on the campaign trail, but President Obama and Republican front-runner Mitt Romney are sharply divided over one of the most controversial issues in higher education today — the growth of for-profit colleges.
For-profit colleges and universities represent the fastest-growing but also most controversial sector of private higher education in the United States. Universities like Phoenix, DeVry and Kaplan have helped turn the for-profit sector into a massive revenue generator and the engine for higher education growth. From 1998 to 2008, for-profit enrolment grew by 225%.
Last year, the Obama administration vowed to stop for-profit colleges from luring students with false promises. In an opening volley that shook the $30 billion industry, officials proposed new restrictions to cut off the huge flow of federal aid to unfit programs.