Under the Bush administration, the Department of Education loosened the rules governing for-profit universities. The Obama administration, however, is considering a new set of regulations that would prevent the flow of federal support to schools where the majority of graduates can’t afford to pay their debt. Under the proposed “gainful employment” regulations, programs with a repayment rate of at least 45 percent will remain eligible for federal student aid. The regulations will test two areas for eligibility: repayment rates and debt-to-income loads. To be completed by November 1st, these regulations are to go into effect in July 2011. Programs with low repayment rates can remain eligible for federal student aid if their graduates can earn high incomes. In addition, Education Secretary Arne Duncan, in a letter to Senator Tom Harkin, chairman of the Senate Committee on Health, Education, Labor and Pensions, said he was hiring more staff to strengthen oversight of federal student aid programs, and would conduct 50 percent more program reviews each year. This includes cracking down on aggressive and deceptive recruiting practices by for-profit universities. An undercover investigation by the Government Accountability Office sent “secret shoppers” into 15 of the largest for-profit colleges, and found questionable or misleading practices at all of them.
Despite the controversies surrounding for-profit online education, the future of online education appears bright as the industry continues to flourish with record numbers of student enrollment. The flexibility, convenience, and constant updates to the curricula make online education a very attractive option to many people. Negative publicity has also led many online universities to quit questionable practices in order to create a positive image for current and prospective students. Whether the changes are working or not, enrollment at for-profits currently tops three million students nationwide, an increase of 60% from 2004-2005.
Once the leader in higher education, America no longer has the highest proportion of college graduates in the world. According to data from the Organization for Economic Cooperation and Development, the U.S. ranks seventh among nations for adults age 18 to 34 enrolled in college. Furthermore, only 39 percent of U.S. adults have an Associates degree or higher, compared with 55 percent for Canada and 54 percent for Japan. In February 2009, President Obama promised that the government would “provide the support necessary for you to complete college and meet a new goal: by 2020, America will once again have the highest proportion of college graduates in the world.” Obama has incorporated tax incentives for higher education into the stimulus bill iof 2009, and committed $12B (shortfalls reduced this to $2B) to expanding community colleges nationwide. With continuing budget deficits, a changing educational environment, and the increasing visibility of online schools, it is clear that these educational facilities will play a crucial role in fulfilling Obama’s promise.
Go to Part 4 - Issues with Online Schools
Go to Part 6 - Resources
