The Department of Education released the final draft of its proposed rule on Friday to ensure that for-profit colleges offer post-graduation employment opportunities for their students that leave them capable of paying back their student loans. The rule, known as the “gainful employment” regulation, represents the culmination of a three-year fight with the industry, which successfully challenged a previous version of the rules in court.

The administration believes that the new regulation, which will first go through a 60-day public comment period, can now withstand a court challenge. And that's a good thing once you understand what the changes will do and why they're necessary.

Students at for-profit colleges drop out at an alarming rate and those that do graduate have much higher levels of debt than students in public and private non-profit colleges. For-profits also receive a substantial share of their revenue—more than 80 percent to be exact—from loans and grants from the federal government. In 2012, the Senate Health, Education, Labor and Pensions Committee, led by Senator Tom Harkin, completed a two-year report into for-profit universities to investigate whether this taxpayer money was being well spent. Across the board, degrees and certificates from for-profit colleges cost significantly more than those from non-profits:

Those extra costs are not leading to high graduation rates though. Fifty four percent of students who enrolled during the 2008-2009 school year had withdrawn from the institution by 2010. Only 18 percent had earned their degree or certificate. But students who attend for-profit colleges often leave them with significant debt. In the three years after they leave school, they default much more often than students from public and private colleges:

It’s unfair to dump the blame entirely on the for-profit colleges. The Association of Private Sector Colleges and Universities (APSCU) argues that for-profits serve students who are not served by traditional private and public colleges. Those students often need sizeable loans and are more likely to withdraw from school than students in public and private non-profit colleges.