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January 10, 2017

With just over a week left in office, the Obama administration continues to crackdown on the for-profit college industry. The U.S. Education Department says hundreds of schools have failed to meet its gainful employment rule.

The rule is designed to protect students from trade schools that leave them with loads of debt and few job prospects. On Monday, the Obama administration named more than 800 programs it says are violating the rule.

“When a student makes a personal and financial decision to attend college, the student must feel confident that it is a sound investment in his or her future, not a liability that will further defer his or her dreams,” said U.S. Secretary of Education John B. King Jr. "These rates shed a bright light on which career training programs are most likely to prepare students for repaying their student loan debt, and which programs might leave them worse off than when they started.”

Nearly all listed programs are at for-profit colleges like the University of Phoenix and Kaplan University, but a theater arts graduate program at Harvard was a notable exception.

The Department finds graduates of Harvard's theater program earned about $32,000 a year while making debt payments of about $8,000 a year.

You can download the debt-to-earnings data here.

Barmak Nassirian, a student loan expert with the American Association of Colleges and Universities, says the list should have been made public years ago and the Department hasn't gone far enough in holding programs accountable.

"Better late than never but these programs that failed gainful employment standard are toxic, and yet they will remain on the shelf quite legally,” Nassirian said.

If schools don't boost job placement rates, however, the Department says they could lose access to federal student aid.

Career Education Colleges and Universities, a trade group representing hundreds of for-profit schools, called the Department's action 'disappointing and disrespectful.'

“The Department’s decision to publish a list of schools failing their initial calculations before the process is complete makes clear this is all about political motivations and harming institutions, and has nothing to do with expanding higher education access and opportunity or creating sound public policy," said Steve Gunderson, president and CEO of Career Education Colleges and Universities.

Consumer advocates, though, applauded the Obama administration's decision.

"Students deserve this basic information before they decide where to go to school, and taxpayers should not have to subsidize programs that consistently underperform and leave students worse off than when they enrolled,” said Pauline Abernathy, Executive Vice President of the Institute for College Access and Success.

UPDATE: On Wednesday, Harvard responded after the Education Department cited its theater arts program for failing the gainful employment rule, announcing that due to funding uncertainty the university's American Repertory Theater will stop enrolling new students. Harvard says the ART is temporarily pausing new enrollment, reevaluating the program and addressing student funding.

Earlier: After ITT Shutdown, A Look At For-Profit Colleges' Role In Higher Ed

access, president obama, for-profit, Harvard

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