[saalweachter]

The reason for-profit educational institutions are a plague is that the US government provides for a special class of loans to allow people to go to college without having the cash up front.

This special class of loans has both a relatively low interest rate (making them appealing for consumers) and cannot be defaulted on, an important feature when there is no collateral for a loan. (This feature is not needed, for instance, when you buy a home, because if you default on your mortgage they can take your home, which you put up as collateral.)

This created the opportunity for investors to create educational institutions with a thin veneer of respectability, suck in any student who could qualify for loans, and funnel that money back to the investors. Which many did.

Removing the eligibility for this special class of loan for (all, or just the known offenders) for-profit universities removes this opportunity without actually outlawing for-profit universities. This opportunity only existed because of the federal government meddling in the free market, so everyone should be happy.