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About 12 percent of college students nationwide attend for-profit schools. The Education Department estimates that 26 percent of all student loan money and 46 percent of all student loan dollars in default come from students in for-profit programs. Some of those institutions receive more than 80 percent of their revenue from taxpayers, the department said.

Since the rule does not go into effect for 13 months, Congress will have ample time to review it and offer changes or enact legislation to blunt its impact. Mr. Cantor said the GOP-controlled House would bring legislation to the floor to do just that.