Will New Department Of Education Regulation Stifle Higher Ed Opportunity?

Career College Central summary:

  • A proposed regulation from the Department of Education would undermine educational opportunity for millions of American students. The "gainful employment rule” and its innocuous name belies its true nature. The rule would rate for-profit educational programs based upon student debt ratios, loan repayment rates and other metrics. Programs and institutions that fail to meet the government’s standard would see cuts to federal financial aid for students.
  • But critics of the rule note that it would be destructive to private-sector educational institutions. The Obama administration has trained its sights on the burgeoning “for profit” sector, such as online universities. But the rule would also strike at a wide array of existing two-year schools and vocational progams—think barber and cosmetology schools, massage schools, technology programs, and training programs for welders, auto mechanics and HVAC technicians. Under the “gainful employment” rule, these schools would be rated based on their students’ debt and income after leaving the program—even students who drop out and fail to complete their course of study.
  • Supporters of the rule argue the new regulation is needed to “rein in” private-sector educational institutions, which they accuse of saddling students with large amounts of debt and few job opportunities. Of course, the same could be said of many public sector institutions, law schools and virtually all post-graduate humanities programs, none of which would fall under the “gainful employment” rule’s purview and many of which would fail to meet that test.
  • A study published this month by the New York Federal Reserve found that an estimated  “70 percent of U.S. students who graduated in 2012 had student loan debt, with the average borrower owing $29,400, up from $26,000 the previous year,” while the job outlook for new graduates remains grim, Reuters reports. But rather than seeking wide-ranging reform of the federal student loan process to protect students across the board, the Department of Education is seeking to scapegoat and target a narrow sector of the higher education world.

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