The Beginning Of The End Of For-Profit Colleges

Former for-profit college students have helped fuel
 the student loan protest movement.

Education Management Corporation or EDMC, announced it will gradually shut down 15 of 52 campuses of The Art Institutes, leaving 5,400 students without a college.

This comes after Corinthian Colleges closed its remaining 28 college campuses only last week. DeVry University also announced the closure of 14 campuses and Kaplan Inc. sold 38 Kaplan College campuses to Education Corporation of America. Enrollment is also falling for for-profits such as Strayer University and the University of Phoenix.

Regulation and oversight of the for-profit college industry has increased in recent years, with enforcement of the “gainful employment” rule, spurring The U.S. Department of Education to investigate job placement rates and dole out heavy fines to those misrepresenting career opportunities after college. The gainful employment rule required that to qualify for federal student aid, for-profit colleges would have to show that they prepare students for “gainful employment in a recognized occupation,” which is defined through a debt-to-income ratio.

A 2012 report by the Senate committee on health, education, labor and pensions found that Education Management Corporation had “some of the highest numbers of students leaving the company’s programs without completing a certificate or degree of any company examined.” The report also showed that Goldman Sachs owned 41.8 percent of the company and that 80 percent of the company’s funds came from the federal government.  READ MORE