Facing New Student Loan Rules, For-Profit Colleges See Enrollments Fall

Shannon Rasberry  Years of record enrollment growth at for-profit colleges may be coming to an end.

New student enrollments have declined at many for-profit institutions, according to earnings reports released over the past few weeks.

When compared to last year’s figures, new student enrollment was down 2 percent at Strayer Education and down 3.9 percent at ITT Education Services. Corinthian Colleges said it expected declines of 5 to 7 percent this year, while DeVry and Capella Education both announced expectations that new enrollment would drop slightly.

The decline in new student enrollments was most severe at the University of Phoenix, the largest for-profit college in the nation. Although the Apollo Group, the University of Phoenix’s parent company, said that new enrollment had fallen 10 percent in the quarter that ended Aug. 31, the company warned that numbers could sink more than 40 percent in the quarter ending Nov. 30 (

Wells Fargo Empties Customer’s Checking Account to Pay Delinquent Student Loan

NextStudent  An Atlanta couple has found themselves with their savings wiped out after their bank, Wells Fargo, cleared out their checking account in order to pay a piece of what bank officials maintain is an outstanding student loan (

Obama Speech on Education Reform to Highlight Financial Aid and Student Loans

Shannon Rasberry  President Obama will highlight reforms made in the arena of financial aid and student loans as part of a review of his administration’s work in higher education in a speech today at the University of Texas at Austin (

Medicaid Bill Means Fewer Cuts to Higher Education and Financial Aid Programs

Shannon Rasberry  Congress was called back from its annual August recess on Tuesday to pass a bill that adds $16.1 billion in funding for state Medicaid programs, a move that will indirectly help public colleges by allowing states to forgo planned cuts to their higher education budgets and, in some cases, restore suspended college financial aid programs (

N.J. Woman Charged With Scamming $200,000 in Student Loan Fraud

NextStudent  A New Jersey woman was arrested last week for running a student loan scam that allowed her to collect nearly $200,000 in student loans from fraudulent college loan applications she submitted over a period of four years (

In Debt From Private Student Loans, Parents Lose Home

Shannon Rasberry  Several years ago, James Reach co-signed on private student loans to help his four children pay for college. In the last couple years, however, he and his wife have become unable to pay their debts, comprised mostly of student loans, because they lost their jobs in the recession.

And now, Reach, 56, and his wife have lost their home in Sugar Grove, Ill., which was foreclosed on in September (

Bankruptcy Protection Bill for Private Student Loans Advances in Congress

Shannon Rasberry  After being stalled since April, proposed legislation has advanced in the U.S. House of Representatives that would treat private student loans like almost all other consumer loans, allowing struggling borrowers to have their debt from private student loans discharged in bankruptcy.

The Private Student Loan Bankruptcy Fairness Act (H.R. 5043), originally introduced in the House on April 15 by Reps. Steve Cohen of Tennessee and Danny Davis of Illinois, was passed by a House subcommittee on Sept. 15. The proposed legislation would reverse a provision of a lender-friendly bankruptcy reform bill that, in 2005, created special protections for lenders of private student loans, making private student loans almost impossible to discharge in bankruptcy, unlike most every other form of private consumer debt.