For-profit college officials and investors welcomed Donald Trump’s return to the White House, though his policies might be more complex than during his initial term. Trump is unlikely to limit the for-profit college industry, unlike previous Democratic administrations, and fewer students claiming fraud by these colleges are expected to receive loan forgiveness. However, Trump’s administration may impose accountability measures on colleges and universities receiving federal funding, and there might be increased pressure on career programs to fulfill job placement promises.
Key areas of interest include gainful employment regulations, which were rescinded during Trump’s first term. These rules, which established a debt-to-earnings ratio for career programs, were strengthened under Biden. However, they face legal and bureaucratic hurdles, and with Trump in power, Biden’s rules are unlikely to take effect. Some in the for-profit sector support performance standards for all colleges, which could evolve through Congress.
“We think a bad outcome would be to simply withdraw all of the Biden-era regulations relating to for-profit schools,” said Jason Altmire, CEO of Career Education Colleges and Universities. The focus could shift to graduation rates, debt levels, income, and job placement to determine federal aid eligibility. Critics highlight disproportionate student debt among for-profit college attendees, particularly affecting students of color and low-income backgrounds.
Another significant Obama-era initiative is borrower defense, aimed at loan forgiveness for students defrauded by for-profit colleges. Although not abolished under Trump, it faced roadblocks under Betsy DeVos, resulting in a backlog of cases for Biden’s administration. Student debt advocates anticipate slow progress on these cases under Trump.
Accreditation is another area of focus, with Trump aiming to reform accrediting bodies to ensure colleges provide value and accountability. Critics worry new accreditors may not scrutinize for-profits adequately, potentially leading to predatory practices. Publicly held for-profit colleges saw stock price increases post-election, indicating renewed investor interest.
Short-term Pell programs, which prioritize job-focused education, are expected to grow. Trump’s nominee for education secretary, Linda McMahon, supports expanding Pell Grants for short-term programs, although some critics fear these may not yield positive employment outcomes. The for-profit sector is heavily invested, spending over $6.6 million on lobbying this year, as Trump’s policies could significantly impact their future.
For-profit colleges enroll about 5% of students, yet their numbers rose by 8% between 2021 and 2023. Trump’s administration may target nonprofit and public four-year colleges for promoting a “woke” ideology, potentially using regulations previously applied to for-profits.
“We were the politically unpopular schools,” said Altmire. “In a new administration, there are other schools that might find out that having the ability to weaponize regulations against politically unpopular schools is not something that they would be happy with.”
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