White House issues for-profit school rules

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The White House issued a set of rules on Thursday that hope to regulate for-profit college student loan payments. The rules target career-training programs at schools where students regularly default on their loans. 

The Department of Education will track the finances of students who graduate using info from the Social Security Administration, The L.A. Times reports. Schools where graduates spend more than 20 percent of their discretionary income on loan repayments could lose all of their Federal subsidies.

For-profit schools depend on Federal money for 90 percent of their total funding. 

USC Urban Education expert Constance Iloh says she’s uncertain how the rules will affect for-profit schools. The Dept. of Education projects that about 1,400 programs won’t meet the new standard. Iloh hopes that success isn’t defined by how many schools lose funding.

“I’m hoping that when we talk about the success of the rule, the conversation goes back to the students,” Iloh said.

Ryan Shepherd, a student at The School of Audio Engineering, a school that trains aspiring music producers, says the rules will have “zero effect” on his life. The school gave him a scholarship that covers most of his costs, he says. He considers himself lucky.

Shepherd says he’s had friends who went to for-profit colleges who were promised jobs that never appeared, leaving them in debt.

“It’s the kind of thing where the responsibility falls a lot more on the individual,” he said.

The new rules take effect on July 15th, 2015.