For-profit colleges adopt new self-regulation standards
Most of these standards are based on existing federal and state rules to improve transparency and disclosure. New steps include a free 21-day trial for students before they decide to take up a course with the college.
About 17 percent of the for-profit colleges have signed up for this, a spokesman for the Foundation for Educational Success, which represents these colleges, said in an e-mail to Reuters.
The adoption of the new standards is an effort by the for-profit education industry to redeem itself after government investigations exposed fraudulent activities and high loan-default rates by its students.
Under the new standards adopted on Tuesday, the colleges have pledged to improve training of their enrollment and financial aid staff, and reveal the entire cost of programs offered.
They will also disclose completion and loan-default rates of ex-students. An independent audit firm will be engaged annually to ensure compliance.
Patrick Lynch, former Rhode Island attorney general, will serve as the group’s compliance adviser.
Over the last one year, the government introduced new rules to reign in the industry that grew rapidly as a weak job market during the economic recession sent students and adults alike to school.
Since 2010, colleges run by Apollo Group, Corinthian Colleges and others have tightened their admission policies after the government threatened to cut off students’ federal aid — the primary source of their revenue.
The colleges faced negative publicity, a drop in student enrollments and a sharp decline in their stock prices.