SUBPRIME EDUCATION: FOR-PROFIT COLLEGES AND THE PROBLEM WITH TITLE IV FEDERAL STUDENT AID

Federal student-aid policy is designed with the goal of expanding access to higher education for all students. It has been enormously successful in achieving that goal. Yet, for many students, federal student aid has served only to burden them with oppressive student-debt obligations. These obligations are a particular problem with respect to the for-profit higher-education sector, which receives a large and ever-growing proportion of federal aid. This Note examines the interaction between federal student-aid policy and for-profit institutions, arguing that the noble goals of modern federal student-aid policy enable the very practices that lead to negative outcomes for many students by creating a lucrative market for "subprime education." This Note analyzes a continuum of approaches to reducing the negative student outcomes caused by many for-profit institutions, concluding that the blame lies not with for-profit institutions but with federal student-aid policy. Ultimately, the modern federal student-aid regime requires regulators to choose between abetting negative student outcomes and reducing access to higher education. This dilemma can be avoided only by deemphasizing the student-oriented aid model in favor of an institution-centered model that is focused on reducing the price of education