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.

Arizona Credit Union Awards Student Loan Forgiveness Grants

NextStudent  Arizona State Credit Union announced that it has awarded $34,000 in college scholarships and student loan forgiveness grants to 17 students and recent college graduates from around the state.

The credit union’s Loan Reduction Grant provides funds to help recent Arizona graduates pay down their student loans. The grant is awarded to graduates on the basis of academic achievement and continuing commitment to their communities.

Recipients of the credit union’s Community Leaders Scholarship, aimed at Arizona college students still in school, are awarded money to help pay for tuition, fees, textbooks, and other college expenses.

The winners are students and graduates from state colleges and universities 

Government Approves College Loans for Parents Who Can’t Afford Them

Shannon Rasberry  The U.S. Department of Education may be approving federal parent loans for parents of college students even if the parents can’t afford them, according to several college financial aid officers who spoke with U.S. News & World Report.

Federal parent loans 

Student Loan Checks Delayed at D.C. University

NextStudent  Students at the University of the District of Columbia who depend on federal student loans and other financial aid to cover their school and living expenses are still waiting for their fall-semester money 

New Bill Bans Restrictions on Student Loans at For-Profit Colleges

Shannon Rasberry  For-profit colleges recently gained a Congressional ally in their fight with the federal government over a proposed rule that would regulate their access to federal financial aid based on the ability of their students to repay student loans.

Sen. Jim Risch, a Republican from Idaho, introduced the Education for All Act (S. 3837) on Sept. 23, which would prohibit the U.S. Department of Education from enacting its proposed

Oregon Sues University of Phoenix for $10 Million for Investor Fraud

NextStudent  Oregon has joined a class-action lawsuit against for-profit college behemoth University of Phoenix, seeking $10 million for losses due to the school’s misrepresentations to investors and other fraudulent practices, Oregon state officials announced on Monday (

Reported Financial Aid Fraud at For-Profit Colleges Leads to Florida Investigation

Shannon Rasberry  Florida’s attorney general has launched a civil investigation into five for-profit higher education companies for alleged deceptive recruiting tactics, misrepresentations made to students about financial aid and accreditation, and other fraudulent and potentially illegal practices (

Debt From Student Loans Grows as Graduate Unemployment Sets Record

Shannon Rasberry  College seniors who graduated in 2009 carried an average of $24,000 in debt from student loans. That figure represents a 6-percent increase over 2008 and continues a four-year trend of rising debt from student loans among college graduates, according to a recent report by The Project on Student Debt.

The report,

Government Sues Accused ‘Pill-Mill’ Doctor for $125,000 in Unpaid Student Loans

NextStudent  A Florida physician accused of illegally doling out prescriptions for narcotics is now being sued by the federal government for recovery of more than $125,000 in unpaid student loans.

The government is seeking payment of $114,790 in unpaid principal and $11,624 in accrued interest charges on Dr. John Mubang’s federal college loans, The Tampa Tribune reported on Monday (

In N.J., a Scramble for Student Loans After Paperwork Snafu

Shannon Rasberry  Nearly 49,000 New Jersey college students could be forced to take out student loans to pay for school if they miss the approaching deadline for a new state financial aid form