Are for-profit schools breathing sigh of relief? Or in holding pattern?

Fast-growing for-profit schools have some more time to worry about new rules that have the potential to drastically alter — and possibly curtail — their future.

Enrollment in for-profit schools has soared in recent years.  The consulting firm Eduventures predicted a 25 percent jump in the number of students expected to be educated at for-profit schools by 2019. That would seem like excellent news to the Career College Association (CCA), whose members include schools that support and educate over a million students a year in some 200 different fields. The sector is growing in part because community colleges across the U.S. are oversubscribed, particularly in California.

New rules are on hold for the for-profit schools, as Senator Harkin begins hearings

And yet the CCA, based in Washington D.C., has been most concerned in recent weeks about new U.S. Department of Education regulations that would have cut off federal aid to for-profit colleges if their graduates could not earn enough to pay back their student loans, amid growing concerns that the schools leave students with too much debt. The department did propose curtailing the ways schools recruit students, and it wants the schools to disclose both their graduation and their job-placement rates.

U.S. Education Secretary Arne Duncan said in a statement on Tuesday, though, that no decision had been reached on what debt-to-income ratios would cut off federal aid to the schools — a provision known as “gainful employment” — and he acknowledged that the department “is still developing metrics to hold programs accountable for preparing their students for gainful employment.”

Duncan said the key issues “are complicated and we want to get it right,” and said the new rules will be released later this summer. “This is about accountability and protecting students,” he said.

CCA President Harris Miller and his group had lobbied heavily in recent weeks against the new rules, and it’s quite possible the efforts paid off, even as Sen. Tom Harkin (D-I0wa) announced a series of hearings to examine federal education spending at for-profit higher education institutions.

Miller said that Duncan had heard the industry’s arguments.

“The Department of Education heard concerns from our sector, traditional higher education, a bipartisan group of lawmakers, and many employer groups about the likely consequences of the gainful employment metric that was under consideration that would have eliminated access for hundreds of thousands of students without helping anyone,” he said.  “Secretary Duncan said he wants to get this right, and the focus on disclosure in the proposed rule rather than unjustified and unjustifiable metrics shows he is true to his word.”

The Hechinger Report, in collaboration with The Washington Post, earlier this week described the huge growth of for-profit schools in California,  where agreements are growing between cash-strapped community colleges and for-profits.

“If the for-profit schools continue to grow at the same rate they have in recent years, they will become more than just a niche player in the post-secondary landsacpe,” noted Eliza Krigman, who covers education for the National Journal magazine, in a blog post that appeared in The Atlantic. The growth of for-profit schools also comes at a time when President Barack Obama is pushing more Americans to earn college degrees.

One positive reaction to the delay of new rules on Wedneday appeared to be coming from the stock market, according to stories in Reuters, the Wall Street Journal and Bloomberg News. For-profit stocks were all rising — just as they did the day it was announced that Robert Shireman, the deputy undersecretary of education who is considered the architect of the new rules, would be leaving his post.

Liz Willen