The Department of Education's inspector general recently warned that the PROSPER Act may repeal some important regulations.
The U.S. Department of Education’s inspector general recently weighed in on attempts to reauthorize the Higher Education Act (HEA), adding to the concerns. Specifically, the inspector general warned that certain provisions in the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act may repeal regulations that hold colleges accountable for how they manage federal aid.
In the report, the inspector general’s criticisms focused on the bill’s proposal to end the 90/10 rule, which currently caps for-profit schools’ revenue from federal aid at 90 percent. The bill would also eliminate the gainful employment regulation, which currently cuts off federal aid to vocational schools whose graduates are unable to repay their loan debt.
The PROSPER Act would get rid of many accountability measures aimed at monitoring for-profit colleges and would even eliminate the distinction between nonprofit and for-profit schools. But according to the inspector general, for-profit schools pose a significant risk and shouldn’t be treated the same as other colleges.
Since 2016, 79 percent of the fraud cases involved for-profit colleges. The report also showed that these schools have a higher percentage of students who haven’t made payments on their loans within three years of graduating, warmly referred to as being in default.
The report speculates that, unlike nonprofit or public colleges, for-profit schools must generate a profit for their stakeholders, which might encourage such schools to dodge the rules. The inspector general encouraged Congress to strengthen accountability measures rather than get rid of them entirely.
Both Republicans and Democrats were quick to comment on this report. House Education Committee spokesman Michael Woeste responded by saying that the committee was unsurprised by the inspector general’s comments since the office has “historically resisted innovation.”
Meanwhile, Representative Bobby Scott, a Democrat from Virginia, urged Republicans to abandon the PROSPER Act and work with House democrats to come up with a better solution for higher education reform.
Thinking of Going to a For-Profit College?
For-profit colleges have gotten a lot of bad press in recent years. Many of them appear to favor their bottom line over setting their students up for success. However, there are good for-profit colleges out there. These programs are often more flexible and cater to students that might not otherwise pursue a college education.
For students who are thinking about attending a for-profit college, there are a few things to keep in mind. First, students should be wary of any college representatives who purposely evade their questions or attempt to pressure them into signing up.
And students should make sure they understand the school’s pricing and what types of courses they offer. Students can research different programs online and compare the pricing versus the programs offered. The Dept. of Education has a scorecard so you can look up your school of choice to see its costs, financial aid and debt, and median post-grad earnings.