Skip Ribbon Commands
Skip to main content

 Email  Share  Print

WEDNESDAY BUZZ: Senate Committee Hearing Looks at For-Profit Student Debt

June 08, 2011

 

​The Senate Health, Labor, Education and Pensions Committee held its fifth hearing yesterday on the for-profit education sector, this time focusing on student debt loads and the new “gainful employment” rule intended to ensure students in career programs will earn enough money to repay their loans.

Chairman Tom Harkin (D-IA) characterized the new rule as “an important but modest first step,” claiming that it did not go far enough to protect students who often take on crippling debt.

“At a time when Congress is single-mindedly focused on our federal debt, how can we blindly maintain policies that foot the bill for students to attend schools that have proven to be such a bad investment?” he said in his opening statement. “In 2009 for-profit colleges received $18 billion in guaranteed student loans. If trends continue we can expect nearly half of those loans to default. This should not be acceptable to those of us who are stewards of taxpayer dollars. High default rates mean ruined credit and garnished wages for students and more spending for taxpayers.”

Martha Kanter, undersecretary for the Department of Education, defended the rule as giving career colleges “every opportunity to reform themselves” while not letting them “off the hook.”

She also announced two pilot programs: The first would provide institutions with guidance on creating tuition-free trial periods so students can sample a course of study before making a financial commitment, and the second would give colleges more discretion over how much their students borrow. (See The Chronicle of Higher Education on how this plan will affect the so-called 90/10 Rule.)

Republican committee members boycotted the hearing, believing that the “continuation of this investigation is motivated in part to embarrass” for-profit colleges, as Ranking Member Mike Enzi (R-WY) wrote in a May 31 letter to Harkin (see The Washington Times).

Also see:

Another Round
Inside Higher Ed

 

Other ACE News

  • May 22, 2015

    Today's Headlines

    HEADLINES: Today's Top Higher Education News

    In today’s headlines, The Wall Street Journal looks at what presidential hopefuls are proposing be done to curb college costs and reduce student debt. And while the Regents of the University of California are embracing Gov. Jerry Brown’s budget...

  • Innovative Practices

    May 22, 2015

    alternative credit project

    Calling All Proposals for ACE Alternative Credit Consortium

    Institutions demonstrating a strong commitment to access and attainment, particularly those serving nontraditional students, are invited to submit proposals to join the second wave of ACE’s alternative credit consortium.

  • Law and the Courts

    May 22, 2015

    Library with Colorful Books

    Access and Diversity Collaborative Issues Syllabus

    Over the last decade, the College Board’s Access & Diversity Collaborative—working in partnership with ACE, EducationCounsel and a numerous higher education institutions and organizations—has developed a significant body of work designed to assist...

  • Institutional Capacity

    May 20, 2015

    Register Now for ACE's Advancing to the Presidency

    Advancing to the Presidency, a two-day workshop scheduled for Oct.19-20 in Alexandria, VA, helps senior admnistrators prepare for the transition to the next level.

  • Institutional Capacity

    May 20, 2015

    It’s Not Too Early to Think About Applying for the Next Class of ACE Fellows

    As the ACE Fellows Program concludes its landmark 50th anniversary this academic year, it’s not too early to start thinking about applying to be a member of the 2016-17 class of the ACE Fellows Program.