[munchbunny]

The decision is specifically targeting for-profit degree mills.

The problem is that these institutions provide expensive educations, paid for by people taking out student loans (which the institutions actively encourage). However, these same institutions don't provide any sort of education that would give their students even a remote chance of paying off the student loans on any reasonable timeframe.

This creates a system of perverse incentives where the degree mill is essentially farming student loan money, screwing over both the student and the government in the process.

My read on the news is that the policy is supposed to stop exactly this phenomenon.

[imjustsaying]

I'm just going to go out on a limb and say that most of the people going to ITT-esque schools are getting Pell Grants (free money, not loans) first and foremost to cover their costs.

I didn't even know this was a thing until after I graduated (I never got a Pell Grant because my parents made too much money).

Some schools have over 90% of their students funding their entire costs through Pell Grants (look at University of Puerto Rico or Interamerican University of Puerto Rico for some extreme examples).

[saalweachter]

It looks like ITT does/did have a large proportion of students with Pell Grants -- 23,500 out of 57,000 students. The tuition figures I can find for ITT are $18,000 / year, while the average Pell Grant to an ITT student was $1800 / year.

So 40% of ITT students got 10% of their tuition from ITT, and ITT got 4% of its revenue from Pell Grants.

[munchbunny]

The 10% number is really interesting, where are these students getting the other 90%?

To me it feels like it can't have just been paid in cash, because if you have $16,000 per year just lying around... you are probably in a situation where you can find better options than ITT.