Federal Regulations Restrict the Use of Government Subsidized Student Loans, Not Private Colleges

June 02, 2011

The Washington Post, which is part of a corporation whose primary income comes from for-profit colleges, told readers that new regulations on student loans would:

“effectively would shut down for-profit programs that repeatedly fail to show, through certain measures, that graduates are earning enough to pay down the loans taken out to attend those programs.”

It is important to note that the rules being proposed don’t restrict for-profit colleges in any way. They simply impose conditions that they must meet in order for their students to be eligible to receive student loans.

The rules are restrictions on students trying to get loans in the same way that prohibitions on using food stamps for junk food would a restriction on food stamp recipients, not restrictions on the junk food industry. In that case, the junk food industry would still be free to sell their product to whoever wanted to buy it, including people receiving food stamps. However, they would just be prohibited from buying the junk food with their food stamps.

In the same way, anyone who wants to would still be able to attend any for-profit college they chose. They could even borrow money to do so. They would just be unable to get a subsidized loan from the government for this purpose.

Comments

Support Cepr

APOYAR A CEPR

If you value CEPR's work, support us by making a financial contribution.

Si valora el trabajo de CEPR, apóyenos haciendo una contribución financiera.

Donate Apóyanos

Keep up with our latest news