NEW YORK – The government is moving forward with its crackdown on the country's for-profit schools, aiming to protect students from taking on too much debt to attend schools that do nothing for their job prospects.
The Department of Education has finalized its "gainful employment" rule, which will ban for-profit schools like DeVry University or Apollo Group Inc.'s University of Phoenix from accessing federal financial aid dollars if too many of their graduates are unable to find jobs that pay enough to allow them to afford their student loan payments.
Under final terms of the law, announced Thursday, schools will only be able to receive federal-paid tuition if at least 35 percent of its former students are repaying their loans.
The DOE says it expects 18 percent of for-profit schools' programs to fail its tests at some point, and 5 percent of programs to lose eligibility under the new law.
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