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For-Profit Colleges May Lose U.S. Aid Over Violations

For-profit colleges that pay recruiters on the basis of the number of students they sign up may lose access to U.S. government student aid, which provided the colleges with $26.5 billion last year and can account for as much as 90 percent of company revenue.

The Department of Education, seeking to strengthen oversight of the for-profit college sector, is considering boosting fines and disqualifying colleges from participating in federal-aid programs when they give bonuses to admissions officers for enrolling more students, said James Kvaal, deputy undersecretary of education, in a telephone interview. For-profit colleges got about 23 percent of all federal student grants and loans that went to U.S. universities in 2008-2009, according to the U.S. Government Accountability Office, while educating about 12 percent of all students.