According to a recent report, the Education Department has disclosed fresh guidelines for the student loans.
The regulations are aimed at cutting back the monetary aid given by the Government to the non-profit schools. The reason behind it is that most of the students do not repay the loan borrowed by them.
The stringent regulations have also come in the wake of unnecessary degrees issued by some commercial schools.
Henceforth, the rules have made it mandatory for the colleges to make at least 45% of their students to pay the principal amount for their loans in order to fully qualify for student aid.
The New York Times has disclosed that the fresh aid will be prohibited to the schools where less than 35% ex-students fail to pay the loans.
However, the representative body of the for-profit colleges, the Career College Association, is not happy with the Government’s decision and called it needless and imprudent.
In the present scenario, around 8% of students go to the for-profit organizations. However, many of them are not able to pay back their loans as they are not able to make sufficient money.
Experts have revealed that around 25% of the federal assistance had gone to the for-profit colleges in the year 2008-09.
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