Higher Education:

Ensuring Quality Education From Proprietary Institutions

T-HEHS-96-158: Published: Jun 6, 1996. Publicly Released: Jun 6, 1996.

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Pursuant to a congressional request, GAO examined whether proprietary schools receiving Title IV funding are providing students with quality educational programs. GAO found that: (1) fewer proprietary schools have been accredited since 1992 because of increases in school closures and oversight by accrediting agencies; (2) the proportion of proprietary school students receiving Title IV aid fell from 80 percent in the 1986-87 school year to 67 percent in the 1992-93 school year; (3) loan default rates fell, but remained substantially higher than those for students attending nonprofit institutions; (4) the 1992 Higher Education Act Amendments adopted a rule prohibiting schools from participating in Title IV programs if they receive more than 85 percent of their revenue from Title IV programs; (5) since the so-called 85-15 rule went into effect, only four proprietary schools have notified the Department of Education of their failure to meet the 85-percent standard; (6) schools not meeting the standard had more than 85 percent of their revenue coming from Title IV funding, improperly documented their eligibility, misunderstood the reporting rules, or intentionally misrepresented their findings; and (7) proprietary school students incur significant debt and are often unable to find jobs in their fields.

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