ANALYSISApril 13, 2026
Should for-profit colleges be more strictly regulated?
The regulation of for-profit colleges has become a major federal policy flashpoint in 2025-2026, with the Trump administration rolling back Biden-era accountability rules, modifying the 90/10 rule, and Congress debating whether to repeal key consumer protections entirely through the 'One Big Beautiful Bill.' Democratic lawmakers have simultaneously reintroduced legislation to strengthen oversight, while 20 states have begun enacting their own protections as federal oversight weakens.
Thousands of students took on massive debt for degrees that didn't deliver jobs — but the schools that sold them those degrees were technically operating legally. When does a bad deal become fraud, and should Washington be the one to decide which colleges get to exist?
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Public subsidy versus private market logic
C
The $15.54 billion flowing annually to for-profit colleges is not a market transaction — it is a subsidy dressed as one. No one is forcing these institutions to accept Title IV dollars, but if they do, accountability for how public money is spent is not regulation of private enterprise, it is a condition of the contract. The conservative case for the 90/10 rule rests on that distinction, not on hostility to private education.
L
We agree on the framing, which makes the current deregulatory push harder to explain. If accepting federal money creates public accountability obligations — and you're right that it does — then the House proposal to repeal the 90/10 rule entirely isn't a market correction, it's removing the one condition that makes the subsidy defensible. You can't simultaneously argue that public money creates accountability obligations and vote to eliminate the mechanism that enforces them.
C
The repeal proposal is worth criticizing, and we've done so — but the administration's new earnings standard effective July 2026 is a condition, not a blank check. The question is whether the 90/10 rule and the earnings standard together are better than either alone, not whether accountability should exist at all.
L
Then we should be arguing to keep both, not to trade the existing floor for a replacement that hasn't proven itself yet — especially when the industry's primary legislative goal for thirty years has been weakening the floor we already have.
Sector-neutral earnings standard as substitute
C
The Trump administration's earnings accountability standard — requiring all programs to show graduates out-earn adults who never attended college — is measurable, sector-neutral, and directly tied to outcomes rather than institutional identity. That is a genuinely conservative mechanism: let results determine eligibility, not what type of school you are. It is harder to dismiss than critics acknowledge.
L
Applying the same standard to Harvard and a predatory coding bootcamp is a category error dressed as fairness. For-profits draw nearly all operating revenue from federal aid while answering to private shareholders — public universities don't operate under that structural incentive. 'Sector-neutral' sounds equitable, but it uses the language of fairness to eliminate targeted oversight of an industry whose market incentives are fundamentally different.
C
The incentive argument cuts both ways — if for-profits face unique moral hazard from federal dependency, the earnings standard hits them hardest precisely because their students are most likely to be in programs with weak labor market returns. A sector-neutral rule that functionally lands heaviest on the sector with the most predatory behavior isn't neutral in practice.
L
That would be compelling if the earnings standard were already in effect and demonstrably working — but it isn't, and trading a proven constraint for a theoretical one while the industry lobbies against both is not a risk the students bearing this debt can afford.
Veterans loophole as regulatory proof of concept
C
The veterans loophole is the clearest evidence that the 90/10 rule works as designed: when GI Bill benefits were exempted from the revenue cap, for-profit colleges demonstrably targeted veterans because federal dollars outside the fence don't count against the limit. The loophole's closure in 2021 and 2023 was a bipartisan correction — which means the underlying rule it corrected has bipartisan logic behind it.
L
Agreed — but you've just made the case against the current deregulatory push more powerfully than we could. If removing one carve-out from the 90/10 rule produced documented predatory behavior that required a decade of legislative fighting to fix, what happens when you repeal the rule entirely? The veterans example isn't an argument for fine-tuning the mechanism. It's an argument that the mechanism is load-bearing.
C
The loophole closure proves the rule can be corrected when evidence of abuse emerges — that's the system working, not failing. Predatory recruiting of veterans was identified, documented, and addressed through legislation. That's a better argument for maintaining and improving the rule than for treating it as permanently fragile.
L
The correction took over a decade and required the Senate HELP Committee, two administrations, and state attorneys general to force. 'The system eventually worked' is a much harder sell to the veterans who were recruited into debt in the meantime.
High-performing for-profits complicate sector-wide rules
C
The Georgetown Center data showing 125 for-profit institutions in the national top 10% for 10-year ROI is real and we won't wave it away. The IPEDS graduation data for Black, Hispanic, and Pell Grant students at for-profits is also real. A regulatory framework that cannot distinguish high performers from predators punishes the former alongside the latter — which is bad policy and inconsistent with outcome-based conservative principles.
L
The heterogeneity is genuine, but the 90/10 rule is actually the least blunt instrument in this debate — it's a revenue condition, not a sector ban. If those 125 institutions genuinely rank in the top 10% for ROI, their graduates are earning enough to repay loans and attract employers willing to sponsor education, which generates non-federal revenue organically. A high-ROI institution that cannot attract even 10% non-subsidized revenue raises questions about what the ROI figure is actually measuring.
C
That's a fair point — and it's essentially our argument too. The 90/10 floor doesn't penalize success, it creates a minimal market test that genuine performers clear without difficulty. Which is why the strongest version of our position is keep the floor, add the earnings standard, and let outcomes sort the sector rather than institutional type.
L
On that we can agree — the disagreement is with the administration's approach of weakening the floor while the replacement standard is still theoretical, not with the principle that high performers deserve to survive scrutiny.
State-level responses signal federal accountability gap
C
Twenty states writing their own student protection laws as federal oversight weakens is worth pausing on — and not all of them are progressive activist governments. States responding to a real gap is different from states responding to a perceived one, and the pattern here suggests the federal retreat has created something that state governments across the political spectrum feel obligated to fill.
L
This is exactly right, and it exposes the deregulatory logic at its weakest point. If for-profit colleges were performing well and federal oversight was genuinely redundant, states would be doing nothing. The fact that twenty states have concluded independently that new protections are necessary is the closest thing to revealed preference we have — it's not advocacy groups raising alarms, it's state legislatures with their own fiscal exposure acting.
C
State action confirms the accountability gap but doesn't determine what fills it best. A patchwork of fifty state regimes is less efficient and less consistent than a coherent federal standard — which is an argument for restoring federal accountability rules, not for celebrating the patchwork as sufficient.
L
We agree entirely — the patchwork is the cost of federal retreat, not the solution to it. Twenty states improvising their own rules is an argument for stronger federal accountability, which is precisely what's being dismantled.
Conservative's hardest question
The Georgetown and IPEDS data showing strong ROI and graduation outcomes for minority students at some for-profit institutions genuinely complicate a sector-wide regulatory argument — if 125 institutions rank in the national top 10% for 10-year ROI, blunt oversight rules may punish high performers alongside predators, which is both bad policy and hard to defend on conservative grounds.
Liberal's hardest question
The Georgetown Center on Education and the Workforce data showing 125 for-profit institutions ranking in the top 10% nationally for 10-year ROI is genuinely difficult to dismiss — it suggests that sector-wide condemnation may misrepresent a heterogeneous industry, and a regulatory framework that cannot distinguish high-performing from predatory institutions risks punishing the former alongside the latter. A rigorous liberal case must reckon with the possibility that smarter, more targeted accountability rules — rather than blunt sector-wide restrictions — might better serve the students these rules are meant to protect.
Both sides agree: Both sides accept that the $15.54 billion in annual federal aid creates a legitimate public interest in accountability, and that institutions receiving government money cannot claim the same freedom from oversight as purely private markets.
The real conflict: A genuine factual and interpretive conflict exists over whether the new sector-neutral earnings standard effective July 1, 2026, provides equivalent consumer protection to the Gainful Employment Rule, or whether applying the same threshold to Harvard and a predatory bootcamp is a category error that uses the language of fairness to eliminate targeted oversight.
What nobody has answered: If the Georgetown ROI data showing 125 top-performing for-profit institutions is accurate, and both sides agree the sector is heterogeneous, neither has explained what a regulatory framework would actually look like that protects students at predatory institutions without burdening high performers — and whether such a framework is politically achievable or has ever existed anywhere.
Sources
- Web search results provided: comprehensive overview of for-profit college regulation debate, 2025-2026
- Cited actors: Senator Dick Durbin (D-IL), Representative Steve Cohen (D-TN), Jason Altmire (Career Education Colleges and Universities), Amber Villalobos (The Century Foundation), Bob Shireman (The Century Foundation), Carolyn Fast (policy analyst)
- Cited data: IPEDS graduation rate data, Georgetown Center on Education and the Workforce ROI rankings, Congressional Budget Office cost estimate for 90/10 rule
- Cited legislation: POST Act, 'One Big Beautiful Bill' (House reconciliation bill), American Rescue Plan (2021)