Obama Cracking Down On For-Profit College Programs That Don't Net 'Gainful Employment'

| by Sarah Fruchtnicht

President Barack Obama will issue rules on Friday to crack down on for-profit career training colleges that could shut down hundreds of degree programs.

The administration says the move is a bold step to keep federal funds out of the hands of schools that have failed to lead graduates to “gainful employment.”

The White House says the measure should protect students from "predatory, poor performing" institutions and astounding debt.

"Students in these low-performing programs often end up worse off than before they enrolled," Education Secretary Arne Duncan told reporters Thursday. “We want to protect students from enrolling in poorly performing programs that leave them with debt they cannot pay and a degree they cannot use.”

The Department of Education provides $10 billion in grants to schools each year, officials said, the vast majority of which goes to for-profit schools with extensive marketing spending.

For-profit colleges say the regulation might be illegal, and GOP lawmakers in Congress are standing by them, Politico reported.

“The government should be in the business of protecting opportunity, not restricting it,” said Steve Gunderson, president of the Association of Private Sector Colleges and Universities.

The White House estimates 1 million students are enrolled in programs that stand to lose funding under the new rules.

Sources: Politico, Reuters