Education Department is open to delay of for-profit regulations, says Duncan

Education Secretary Arne Duncan on Wednesday said the Obama administration has not ruled out a delay in proposed regulations on for-profit colleges.

The controversial provisions could have a dramatic impact on the for-profit education industry, which receives billions of dollars in federal tuition subsidies each year.

Asked about a possible delay to the new regulations, Duncan said, “We are keeping our options open.”

At issue is a new rule proposed by the Department of Education (DOE) that would require for-profit schools to show that their graduates’ annual loan payments are less than 8 percent of their starting salaries. The intent of the “gainful employment” rule is to ensure that students are entering jobs lucrative enough to cover their loan payments.

The proposal has sparked a fierce lobbying blitz from the for-profit education industry, which argues that the 8 percent threshold is arbitrary and would force schools to reject lower-income applicants.

The issue has divided congressional Democrats. Sens. Tom Harkin (Iowa) and Dick Durbin (Ill.) have pushed hard for the new rules, while Reps. Ed Towns (N.Y.), John Spratt (S.C) and others have raise red flags.

Some Democrats day the proposed rule changes would have a disproportionate impact on minority students. 

When asked Wednesday about any disproportionate impact on African Americans from the rule change, Duncan said, “Many (for-profit schools] do a great job. But there are many that are really hurting [students] also.”

Duncan’s comments came at a breakfast hosted by the Christian Science Monitor.