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Obama Wages War on For-Profit Universities

New federal regulations could force for-profit universities such as The University of Phoenix to disclose more information to applicants about average student debt levels and loan default rates.

The U.S. Department of Education proposal, announced Friday, would set new thresholds for federal student aid eligibility of for-profits, by considering their students’ annual debt-to-earnings rate and student loan default rates over a three-year period.

In its announcement, the department said the new regulations would help rein in career-training programs that leave students swimming in debt while doing little to advance their careers.

But institutions that would be affected said any new rules should apply across the board — to include public universities — and that the data behind the proposal rule could be flawed.

Officials at Apollo Education Group Inc., the Phoenix-based operator of the for-profit University of Phoenix, said they were still reading through the proposed regulations and could not comment specifically on it. But they agreed with others that any transparency requirements should apply across the board…

For-profit universities are often criticized for the higher than average debt levels, low graduation rates, and poor post-graduate employment and earnings statistics among graduates.

Critics of for-profit universities say students should be better educated about the likely return on investment prior to enrollment.

(Image by 401k2012)

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