Is it about time to regulate for-profit career schools?

Abstract from today's Wall Street Journal article (July 23, 2010):

UPDATE: For-Profit Schools Rise On Relief Over Oversight Plan, by   Melissa Korn and Caitlin Nish Of DOW JONES NEWSWIRES

- Shares of for-profit education companies surged Friday as investors expressed relief over a long-awaited U.S. Department of Education regulatory proposal that was less harsh than feared.

- The gains moderated somewhat as trading progressed, though, as analysts warned that the measure, which would penalize for-profit career colleges for graduating students with high debt-to-income ratios, could still hurt the schools in the long run. The schools are under increasing scrutiny as they capture a growing share of federal student-aid dollars and are being asked to prove they are training students for gainful employment in a recognized occupation.

- "The watered-down gainful employment rules are likely to support for-profit education stocks near term," FBR Capital Markets wrote in a note to clients. "However, the details of the proposal are likely to have a greater impact, particularly on short-term programs, than the market may expect."

- According to the Education Department, if career colleges made no changes from current policies, 5% of all programs would no longer be eligible for federal student aid and 55% would be required to warn students about high debt-to-earnings ratios. Most for-profit colleges derive the vast majority of their revenue from federal aid.

- The stocks have been highly volatile since the government released its first iteration of the proposal in January, with shares propelled by speculation over what a final measure would impose.

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College degrees for sale?????