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A new set of financial aid regulations were released recently by the Obama administration for higher education. These were directed exclusively at the for-profit institutions. For-profit educational institutions can be defined as those run with the motive of gaining profit and operated as businesses. These include the schools and universities such as the ITT Technical Institute and University of Phoenix run by private companies.

The last few years have seen a tremendous growth of enrolment in these for-profit institutions according to the DOE or Department of Education. According to Kim Anderson, assistant honors professor at the WSU, the sparkling websites and snazzy advertising are highly tempting for students.

As compared to students from other institutions, those graduating from the non-profit institutions tend to do so with a huge amount of debt. These students default on the loans more frequently than the others.

According to Anderson, it is important to know in-depth about the field of education. Otherwise students are at a risk of being carried away by the tall claims of these institutions that provide a path forward and provide hope.

Bewildered students are left with no choice as an extremely sleek and professional looking financial aid officer convinces them to sign on a form that seals the tuition coverage deal. The extent of problem can be gauged by the fact that at least 43 percent of loan defaulters are from the non-profit institutions and 26 percent of student loans are taken by them too. Compared to these figures, only 11 percent of higher education students attend these elite institutions.

It was this rampant issue that spurred the Obama administration to regulate the use of Federal Money by these institutions according to the DOE. Published on October 28th by the DOE, these regulations are aimed at protecting students from information that is highly misleading and aggressive marketing by these institutions.

Moving forward, prospective students must be provided with the most accurate information on job placement rates after completing their education, debt load and graduation rates as stipulated by these regulations. The eligibility of students who are offered financial aid by these institutions will also be carefully scrutinized in future.

While at least 90% of the money spent by University of Phoenix is from Federal grants and loans, other for-profit colleges usually receive three quarters of their spending from Federal funding according to an article in the New York Times.

According to Rachel Noel a sophomore majoring in human development, she did not know much about these for-profit institutions that are run like businesses. She firmly declared that she would never to these universities that do not seem to offer a well rounded education.

Most students come to know about these institutions through television commercials. Many feel that though they are not comfortable with the extent of money made by these for-profit schools and universities, there are many who benefit from them. They opine that though these schools are not ideal, they at least offer a choice of graduating for many.