Government moves to protect students from overwhelming debt


The White House has proposed rules that could cut federal funding to higher-education training programs if the cohort default rate among graduates for their student loans exceeds 30% for three years in a row.

Programs could also lose out if annual related debt payments surpass 20% of their discretionary income or 8% of their total income.

The proposed regulations are tougher than similar rules that were struck down in court in 2011.

The for-profit sector is unsurprisingly not happy with the rules.

Related tickers: APOL, CECO, COCO, DV, STRA, ESI, LOPE, APEI, EDMC, LINC.

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Comments (4)
  • Bioalchemy
    , contributor
    Comments (175) | Send Message
     
    Well, then they are going to admit fewer people.
    14 Mar 2014, 04:37 AM Reply Like
  • thefuture007
    , contributor
    Comments (33) | Send Message
     
    And the need to stick their noses in this is because.?They are going to unwind FNM/FRE finally so the current administration needs to find something to Overregulate/Over TAX and not allow Capitalism/Companies to determine Default rates whereby the buisness would find a way to deal with all the RED Tape and issues with Defaults.Then people wonder why theres a lack of education and jobs,perfect example of how this administrations approach is hurting those, the sad part 51% of the people Voted for this type of Government vs Capitalism.Or voted for the Social issues,however limited and weren't ready for the overall way people like this " Organize" things and then wonder why the AFC is creating PT jobs,why theres 11 Million IllegalImmigrant Criminals still here, Taking Jobs using food stamps/Healthcare given drivers licsenses.And the kicker raising the minimum wage under the guise it's not enough,YET the Federal reserve's mandate of Trying to keep Inflation going assures it never will be but does this administration push that FACT.? of course not they need the Votes to keep all of "Socializing" going.As for the Extension of Unemployment benefits,the Senate passed,sorry more of the same...why doesn't the SENATE help Deport 11 Million Immigrants which would create jobs for AMERICANS vs hiding from that issue,ah Votes and giving away money to supposedly Help people, thats not helping people when you don't RESOLVE to Solve the Real Problem, the Deportation of the 11 Million Illegal Immigrant Criminals.!!!Happy Trails
    14 Mar 2014, 07:02 AM Reply Like
  • Jake2992
    , contributor
    Comments (1084) | Send Message
     
    If the free market hadn't failed these students, there wouldn't be a need for intervention.
    24 Mar 2014, 12:15 PM Reply Like
  • Moneycurious
    , contributor
    Comments (21) | Send Message
     
    This is hardly government overreach. This is exactly what regulatory agencies do. These regulations protect the companies from their own tendency to overextend, the citizens from becoming prey and the general economy from the risk of sub prime lending.

     

    Companies like EDMC have long sold "pie in the sky" to underserved populations. The lawsuits are not enough to reign in the practices. It is not sad but rather hard reality that these loans, easy admission and inconsequential curriculums would be appealing to disadvantaged persons seeking desperate for opportunity. That they would fall for predatory practices by a nice accredited bright and shiny "corporate university" is hardly something that falls under the aegis of caveat emptor. Protecting all parties, albeit from themselves, is not only the role of government it is the reason for government.

     

    As investors we would be wise to listen more closely to the claims these companies make. At one point I played heavily in this area. The lawsuits and the constant revelations of companies like EDMC make this just too much work. These guys actually appear to disdain their investors and are unapologetic if even taking notice of how the investors are consequently slapped around by their cavalier behavior.

     

    If these companies want and role in the future they need to spend money on finding ways to self finance vadild educations rather than deploying legions of lobbyists.
    14 Mar 2014, 11:23 AM Reply Like
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