- U.S. Department of Education officials announced massive monitoring and sanctioning guidelines for colleges and universities posting negative outcomes in student loan defaults and employability.
- Schools deemed to be "fraudulent" or "financially risky" may have to pay a portion of Title IV funds to the DOE to cover student loan disbursements, will be required to publicly disclose and to inform prospective students of their shaky financial status, and may now be subject to class action lawsuits filed by students and graduates who deem their degrees to be "worthless."
- Monitoring will be tied to accreditation status, lawsuits filed by individuals or government, and public information.
In the quest to reform higher education, the federal government is quickly making college choice a question of vocational training at community colleges or entrance into a four-year public flagship or Ivy League institutional.
During a call with reporters Monday, department officials said their latest proposal is part of the Obama Administration's larger commitment to education and is tied to initiatives like the College Scorecard, Employability Act, free community college plan, and other goals to improve post-graduate outcomes.
With both presidential candidates having ties to for-profit institutions, efforts to target these schools may be reversed before the July 2017 launch date. However, the impact of these policies on schools serving the the most vulnerable and financially disadvantaged students across the nation may be irreversible.
While the programs enacted by this administration have been a dimmed warning light shined upon for-profit institutions, they also carry negative outcomes for single-sex, historically black and Hispanic-serving institutions and tribal colleges. A lack of personal wealth for many of these students often equates to higher debt tolls. Research has shown many students of color also choose majors with lower income potential, which could also mean higher loan default rates, as they work to balance daily expenses with loan payments.