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 Under new regulations unveiled on Thursday and effective July 1,
for-profit colleges will be at risk of losing federal aid should a
typical graduate's annual loan repayments exceed 20 percent of
discretionary income or 8 percent of total earnings.
This is lower than the current threshold of 30 percent of
discretionary income and 12 percent of total earnings.
The U.S. for-profit education sector has faced tougher regulation
ever since a series of government investigations in 2010 revealed
high student debt, low graduation rates and poor job prospects for
graduates.
 For-profit institutions, including Apollo Education Group Inc,
Corinthian Colleges Inc and DeVry Education Group Inc, have been
struggling to attract new students.
"These regulations are a necessary step to ensure that colleges
accepting federal funds protect students, cut costs and improve
outcomes," U.S. Secretary of Education Arne Duncan said in a
statement.
The department said it estimates about 1,400 programs serving
840,000 students, of whom 99 percent study at for-profit
institutions, would not pass the new accountability standards.
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"All programs will have the opportunity to make immediate changes
that could help them avoid sanctions," the department said in the
statement, "but if these programs do not improve, they will
ultimately become ineligible for federal student aid."
(Reporting by Ankit Ajmera and Sagarika Jaisinghani in Bangalore;
Editing by Robin Paxton)
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