For-profit colleges under new scrutiny

The Obama administration took aim at the for-profit educational industry, which is largely financed by federal student loans. It joined 11 states and the District of Columbia this week in suing one of the sector’s biggest players, Education Management Corp., for allegedly paying recruiters based on the number of students they recruited. That practice is banned because it can encourage the signing up of unqualified students.

Only 12 percent of U.S. higher-education students are enrolled in for-profit colleges, but they account for almost half of all student-loan defaults. Ten state attorneys general have also launched a joint investigation into the entire sector.