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December 13, 2010 10:00 AM Limits on For-Profits: “I Would Push Back Really Hard”

By Daniel Luzer

A piece in Bloomberg News indicates that incoming Republican congressman seem to be opposing stronger regulations of the for-profit college industry. According to the article by Esme Deprez and John Lauerman:

Representative John Kline, the Republican who will head the House Education Committee, said he opposes tighter rules for the for-profit education industry, sending company shares higher.
“I would push back really hard against a bill that might come out of Chairman Harkin’s committee,” Kline, of Minnesota, told Reuters, referring to Senator Tom Harkin, the Iowa Democrat who heads the Senate education committee.

Kline, a four-term representative from Minnesota’s 2nd congressional district, who once introduced legislation to put Ronald Reagan’s face on the $50 bill, was a little unclear on what he thought was wrong with regulations that would limit the ability of for-profit colleges to take advantage of federal financial aid if they saddle their students with too much debt.

One of his aides late explained, however, that Kline, “has concerns about arbitrary proposals that would limit students’ higher-education options, as the proposed gainful- employment regulation is currently drafted.”

The current gainful employment regulation would cut vocational colleges off from federal funding if more than 35 percent of former students aren’t paying off their loans and/or if the average former student spends more than 8 percent of his income servicing student loans.

Apparently in response to Kline’s statement for-profit education company stock prices advanced 2.6 percent. Bridgepoint Education Inc. and Strayer Education Inc. gained the most in price, both adding 5.4 percent. Bridgepoint increased 89 cents, to $17.32. Strayer improved $7.88, to $154.07 a share.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer