“A federal regulation that aims at ‘abusive practices in the career college industry’ took effect this month after court challenges failed. And it has the potential to shut down roughly 1,400 schools that enroll 840,000 students,” CBS MoneyWatch reports.
“Under the new gainful employment regulation, for-profit schools will be at risk of losing federal aid if the typical graduate’s annual loan repayments exceed 20 percent of their discretionary income, or 8 percent of their total earnings.
Ninety-nine percent of the colleges in the regulation’s bull’s eye are for-profit institutions, an industry that has been reeling from repeated setbacks in recent years.
Whether any of these schools end up shutting down could very well depend on the outcome of the next presidential election. Industry insiders suggest that if a Republican nominee prevails, the closures may never materialize because the president could decide against keeping the gainful employment regulation.”