Dive Brief:

• The U.S. Department of Education has not cut off federal funding to schools targeted by state attorneys general, the Consumer Financial Protection Bureau, the Justice Department, or the Securities and Exchange Commission.
• The New York Times reports that officials are wary of stopping the flow of money based on accusations, and for-profits targeted in these investigations do not admit wrongdoing in settlements.
• National for-profit colleges have also become adept at gaming regulations, manipulating their student outcome data to obscure their worst-performing campuses and going on to receive hundreds of millions of dollars in federal student aid.

Dive Insight:

The New York Times reports that 100 schools received $116 million last year despite having student loan default rates above the 30% threshold identified as the cutoff for receiving federal funds. Schools under investigation by state attorneys general received $8.1 billion. The 98 for-profits on the Education Department’s financial watch list received $600 million, and the 35 under the highest level of scrutiny received $15 million.

But for-profit schools stepped into the higher education arena to serve students who could not find flexible enough programs or those tailored to their career goals at traditional colleges. Supporters argue the sector still serves these students. Congressional leaders want to do more to hold schools accountable, but new regulations are likely to be applied to all schools, not just for-profits.