For-profit colleges sue over new guidelines

The Association of Private Sector Colleges and Universities is suing the United States Department of Education and Secretary of Education Arne Duncan over rules the government released recently that penalise career training programmes for burdening students with massive debt while offering few job prospects, writes Claire Zillman for Fortune.

The Education Department recently announced its so-called “gainful employment” rules, which base a programme’s access to federal loans on whether the estimated annual loan payment of a typical graduate doesn’t exceed 20% of the student’s discretionary income or 8% of total earnings. The department said that programmes that exceed those thresholds are at risk of losing their ability to participate in taxpayer-funded federal student aid programmes.

When it announced the new rule, the department estimated that about 1,400 programmes serving 840,000 students – 99% of whom attend for-profit institutions – would not meet these standards.
Full report on the Fortune site