Today, more federal student aid is available than ever before for students to pursue a college or vocational education. Last year, the U.S. Department of Education provided more than $115 billion in federal student aid to over 13 million students and families attending more than 6,000 colleges, universities and career schools.
Better yet, two new laws — the American Recovery and Reinvestment Act and the Health Care and Education Reconciliation Act — make significant investments in higher education so that college will be even more accessible and affordable for millions of Americans.
Along with greater access, however, comes a renewed need to ensure that taxpayer funds are used appropriately, and that consumers receive a quality education and training worthy of this unprecedented federal investment.
The U.S. Department of Education has been working with the higher education community to strengthen a number of federal rules on the use of federal financial aid under the Higher Education Act. One of these rules states that vocational or career programs must "prepare students for gainful employment in a recognized occupation" to be eligible for federal grants and loans.
Over the past year, the department sought input from students, schools, vocational programs and the public about whether vocational and career programs were effectively preparing students for gainful employment. Many former students said they were well served by the institutions they attended and the federal aid they received. The programs delivered what they expected — and the training helped them to prepare for a better job.
However, many former students of vocational programs have reported that they were enticed into programs that did not deliver. They reported that their programs fell far short of providing the education and training needed to be gainfully employed. A number of recent media accounts have painted similar pictures of students who received a shoddy education at vocational schools, are now unable to find jobs and are saddled with huge student debts.
These problems afflict only a small minority of vocational and career programs. But they will fester unless steps are taken to protect students and taxpayers. To do otherwise would place taxpayer funds at risk and discourage disadvantaged youths and adults from continuing their pursuit of education and training.
In the past, the department has done little to ensure that programs meet the "gainful employment" requirement. After hearing from the public, the department began discussions or negotiations on language for revising the gainful employment rule. We met with representatives of career schools, traditional colleges and universities, education groups and others affected by these provisions.
We put on the table for discussion a number of suggestions, including re-examining the relationships between student debt and potential earnings in the occupation students are being trained for, the rates of students completing a program and getting jobs, and the rates of students repaying federal loans.
Unfortunately, the negotiators did not reach complete agreement on a proposal. Indeed, the representatives of those schools most affected by the gainful employment rule declined to negotiate on these proposals.
Since the conclusion of the formal discussion sessions, we have received suggestions from a variety of individuals and organizations about these and other possible approaches. While these suggestions are welcome, it is important that we get input from the broader community. For this reason, we will publish a proposed rule later this spring in order to receive and consider additional public comment.
Let me be clear that we will not publish a final rule until I am convinced that it will address the problems that I have described and that we heard so much about during our public hearing process. We will take all measures necessary to ensure that a new rule does not have significant negative unintended consequences.
Opening the door to opportunity is the bedrock purpose of the financial aid programs — and nothing we have suggested would affect an individual’s eligibility for financial aid. The aim of the department’s rule-making this spring is rather to ensure that the wide array of programs available to students deliver the quality results they deserve — benefiting not just individual students in the job market but the nation’s economy and future prosperity.