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Updates: Legislation and Regulations in the For-Profit Industry

As a prospective online student you may be researching programs across a variety of institutions, for-profit and not-for-profit. You may also be aware of ongoing efforts to establish regulations for the higher education industry. Several months ago I wrote about gainful employment and recent media coverage of online programs. With today's post I want to bring you up-to-date with some of the changes that have taken place since that time.

The U.S. Department of Education (USDOE), your Congressmen and Senators, and the leaders of higher education institutions continue to be involved in debates surrounding both institutional accountability and consumer (student) protection. New regulations aim to increase the responsibility of for-profit programs and schools and the protection of the student as consumer of the products and services provided by those colleges and universities. Three key categories that these discussions focus on are disclosure, accessibility, and funding.


What do you need to know about a program before you decide to enroll? There is a seemingly endless list of factors to consider. I provided a basic checklist in June, but there are several ways that government regulations and guidelines are already making additional information available to you.

  • Net price calculators: As part of the 2008 renewal of the Higher Education Opportunity Act, the USDOE requires some schools to post net price calculators on their websites. The intent of these new calculators is to make you aware of what attendance at a program will cost in terms of tuition, fees, and related expenses.
  • Student debt levels: In June of this year the USDOE released new performance requirements for institutions to meet in order for them to be eligible to receive federal student aid funding. If they are unable to meet one of the three measures of performance they must disclose this to prospective students and provide them with a three-day wait period to enroll. If the school continues to fail to meet the measures, regulations require "that schools inform students that they could face difficulty repaying federal loans and could be forced to transfer if the program loses its eligibility." Beyond that point, the schools that do not meet the measures stand to lose their eligibility to receive these funds. 


Access means a number of things in the world of higher education and there has been recent movement toward making higher education more accessible to larger groups of potential students.

  • Expansion of GI Bill: Among the provisions of the Post 9/11 Veterans Educational Assistance Improvements Act of 2010 are the eligibility of veterans to use their educational benefits toward a larger range of programs (including certificate and diploma programs from non-degree granting institutions) and a housing allowance for students participating in online learning programs.   
  • Equal access: Per a recent Dear Colleague Letter (a format commonly used by legislative bodies to notify all members of new information) from the USDOE "schools at all levels must ensure equal access to the educational benefits and opportunities afforded by the technology and equal treatment in the use of the technology for all students, including students with disabilities." As the use of new and different technologies increases in education, in both online and traditional courses, institutions will need to ensure accessibility of materials for all students.


Many of the current conversations about higher education reform include issues related to student funding and student aid. If you are a student who relies on outside funding, discussions about how financial aid is distributed will be just as important as those surrounding disclosure and access.

  • Pell Grants: These federally funded grants, unlike loans, do not have to be paid back by the student. These funds have been the recent target of government budget cuts, but the maximum award for the upcoming 2011-2012 year remains $5,500. (Note: Not all students are eligible to receive the maximum amount.) There are changes, however, in the number of awards that can be received in a single award year: now only one grant award can be received instead of the previous possibility of two.


Impact on Students

What do you, as a prospective student, need to do with this information? You need to be both a student and a consumer – research your options, ask questions, and make informed decisions about your education. Be aware of the issues surrounding the regulation of higher education and how they may affect your choices.

Take control of your financial future – understand your responsibilities related to accepting loans and grants, and what you can expect to receive in the way of financial aid. Know the costs that are associated with the programs you are considering and how they fit with your own budget, before making a decision.

Impact on Institutions

How will the industry change in light of these new regulations and guidelines? Schools and programs have three years to comply with the latest regulations issued by the USDOE, which would impact schools in 2015 at the earliest, although many schools are already making changes. In the meantime there are continued efforts by the institutions themselves, as well as through organized groups that lobby Congress and fund political campaigns, to influence decisions and challenge the most recent regulations. Reduced funding from federal sources, which currently provides the majority of income for for-profit schools/companies, may be one of the largest areas of potential impact.

Stay Tuned

While I have focused my attention in this post on for-profit programs, the regulations and guidelines are not limited to for-profits. These are dynamic times for all of higher education as programs in private and state institutions are also impacted by these decisions.

Stay informed by following the ongoing issues and by asking questions along the way. As with most political discussions, education regulations have voices on all sides. Find multiple sources of media coverage and consider subscribing to their updates online.

Follow the U.S. House of Representatives' Education and the Workforce Committee, and the U.S. Senate's Health, Education, Labor, and Pensions Committee to stay up-to-date on hearings and other related discussions. And talk to your U.S. representatives and senators. Find out how they have voted on these issues in the past and let them know how you want to be represented in future votes.