POLITICS/EDUCATION: For-profit colleges, federal government crackdown, impact on students? impact on taxpayers?: "Crackdown on For-Profit Colleges May Free Students and Trap Taxpayers" ....
* New York Times: "Crackdown on For-Profit Colleges May Free Students and Trap Taxpayers" - From the NYT:
The Obama administration’s decision to bar, one of the nation’s largest operators of , from using federal financial aid to enroll new students shuts off the cash spigot to the troubled company. But it also creates a new set of problems.
The decision last week was the latest step in the federal government’s crackdown on for-profit schools that have vacuumed up billions of dollars in government grants and loans but failed to deliver on promised training and jobs. Still, the goal of relieving current and former students saddled with onerous debt and a subpar education can be at odds with reducing the cost to taxpayers, who are likely to be stuck with the bill for loan defaults and discharges.
“There is a built-in conflict of interest when the gatekeeper and the financier are the same entity,” Barmak Nassirian, director of federal relations and policy analysis at the American Association of State Colleges and Universities, said of the Department of Education.
ITT, with about 45,000 enrolled students spread over more than 130 campuses across the country, received an estimated $580 million in federal money last year, according to the Department of Education. The company did not respond to repeated requests for comment, but Mr. Nassirian and other experts who have closely followed the issue said the department’s decision could mean the end of ITT, either through bankruptcy or sale.
“It’s a de facto death sentence,” Mr. Nassirian said. “They certainly can’t find students who will pay out of pocket to go to that school, and they don’t have adequate resources to creep along in time to reverse the decision. So I don’t see how they’re going to pull out of this.”
The curb on new student enrollment at ITT, which has been under heightened financial scrutiny from the department since 2014, is the latest move in a long-running campaign to halt deceptive advertising, illegal recruitment practices and other abuses by career training and other for-profit educational institutions ................