WASHINGTON—As many as 20% of programs at for-profit colleges would lose revenue from student aid under a draft proposal the Obama administration is developing to rein in tuitions.

The plan, which the Education Department has spent months drafting, targets for-profit schools whose students end up deep in debt or default on their student loans at exceptionally high rates. The rules would also apply to community colleges that offer career training, and technical schools. Public and nonprofit four-year colleges and universities...