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For-profit colleges have got more attention on the campaign trail. President Barack Obama and Mutt Romney, Republican front runner have separate views about the growth of for-profit colleges, which is one of the most controversial issues in higher education today.

The Obama administration has onslaught on this mushrooming sector. The administration is considering developing new regulations to cut the revenue of for-profit colleges significantly. The regulations that are under consideration would prohibit schools for getting increased shared of federal aid, if they have not limited their ability to increase tuition and if the graduates from the schools are not able to repay their loans.

For profit higher education institutions like the University of Phoenix are getting an increasing share of federal funds. They received $4.6 billion in 2000. The amount was dramatically increased to $26.5 billion in 2009. Whilst receiving federal aid, the business practices of many of these for-profit institutions are not fair. 

The Government Accountability Office found out that students at for-profit colleges are more likely to leave college in the middle and are more likely to default on their loans than the students at other colleges. The for-profit schools have been increasing tuition consistently by 4 to 6% every year. One school has increased tuition by $11,700 last year. It has been found out recently that numerous colleges are targeting homeless shelters to find new applicants and saddle them with loans that they cannot afford.

The colleges are asserting that they will stop to target destitute applicants, but the accrediting council for independent schools and colleges has started investigating the practices of Drake College of Business already.

The Obama administration has not released the rules yet. However, the for-profit institutions are working to stop those rules under consideration. The Career College Association maintains the Podesta Group and is working to get the Congressional Black Caucus to give a word on their behalf.

The Obama administration is taking steps to crack down on the for-profit industry. Republican front runner Mitt Romney said that the for-profit sector is holding down the cost of education, as they recognize that they are competing.

Most of the democrats have spent numerous years in targeting for-profit institutions. They have labeled these institutions as fraud and force the government to take measures to harness them in. the Obama administration developed a “gainful employment rule” last year, which penalizes for-profit institutions, in case the graduates from these colleges cannot find work and begin paying back federal loans within three years of their graduation.

The Education Department stated that around 26% of students in for-profit colleges who get student loan money and 46% of students received all student loan dollars defaulted. However, these schools claim only 12% of college students all over the nation default student loans.

For-profit colleges continue to separate along party lines, but some traditional college leaders have started to speak out against this for-profit industry. Daniel J. Carey, Edgewood college president (Edgewood is a private nonprofit school in Wisconsin) said that the success rates and completion rates of for-profit colleges are terrible.