The vast majority of these institutions’ revenue comes from consumers, many of whom rely on loans and Pell grants. That means the federal government is essentially bankrolling schools that often produce very discouraging outcomes. A 2010 report found that only 22 percent of first- and full-time students pursuing bachelor’s degrees at these institutions in 2008 graduated, compared with 55 percent and 65 percent of students at public and private nonprofit universities, respectively. Meanwhile, nearly three-fourths—72 percent—of the programs offered at for-profit colleges produce graduates who earn less than high school dropouts. And for-profit colleges account for 46 percent of people who entered repayment on their student loans in 2010 and were in default by 2012.

Much of the scrutiny has centered on the catastrophe surrounding Corinthian Colleges, Inc., once one of the largest for-profit higher-education companies in North America operating some of the best-known vocational-degree institutions, such as Everest and Heald. The beleaguered corporation recently agreed to sell or close dozens of its U.S. campuses as part of a deal with the Department of Education, which last summer froze the institution’s financial-aid payments after it failed to provide the DOE with a series of required records, including job-placement and attendance statistics. And just last week, the Ministry of Education in Ontario announced that it was shutting down the company’s Everest College campuses in the Canadian region, leaving an estimated 2,400 students in limbo.

Of course, that wasn’t the first piece of bad news Corinthian got this month: Just a few days prior the company found out that it was being delisted from the NASDAQ stock exchange after repeatedly failing to file quarterly reports on time. And then the state of California decided to stop doling out grants to students enrolled at 10 Heald campuses.

As if that couldn’t get any worse, the company was smacked with the announcement today that a group of former Everest College students calling themselves the Corinthian 15 have called a "debt strike"—evidently the first of its kind in U.S. history. The former students have declared that they cannot and will not repay the federal loans they took out to attend the college and are demanding that the DOE cancel their debts. Not surprisingly, they allege that Corinthian defrauded them by running a "predatory lending scheme" and using "illegal debt-collection tactics," among other wrongdoing. The DOE for its part started increasing oversight of the institution last year amid reports that it was falsifying records on student outcomes.

Lots of for-profit higher-education institutions have come under fire as of late, and it appears that the feds—with the help of some advocacy organizations—are set on weeding out the worst of the bunch.