California Kicks For-Profit Colleges Out of State Student Grant Program

The Golden State is cracking down on for-profit schools, but the move will impact thousands of students.

By Julianne Hing Aug 01, 2012

Exactly 154 California colleges, 137 of which are for-profit schools, will no longer be able to offer students state aid for the 2012-2013 school year because those schools failed to meet new state regulations. The change comes after California became the first state in the nation to set more stringent standards than the federal government for student aid eligibility. Under Gov. Jerry Browns’ new state budget, institutions of higher education which want to offer their students state tuition support have to have a student loan default rate of 15.5 percent or lower and a graduation rate of 30 percent or higher. "The Commission has argued for years that the best way to protect students, parents and taxpayers is to make sure Cal Grants help students get into solid programs that deliver proven educational and career value. Eliminating schools with high loan default rates and low graduation rates is a sensible way to do that," Barry Keene, chair of the California Student Aid Commission, told the [Sacramento Bee]( The new rules meant a new crop of schools got bumped; the 154 new ineligible schools is a marked increase from the 67 which were deemed ineligible for the 2011-2012 year. Of the 170 for-profit schools which participate in the program, 80 percent, including for-profit heavy hitters like University of Phoenix, ITT Technical Institute, Kaplan College, Heald College, will now no longer be able to offer their students state aid.