CONSUMERIST: Consumer Groups Ask Congress To Ensure That For-Profit Schools Are Held Accountable

Career College Central Summary:

  • When the new gainful employment rules take effect later this year, for-profit educators would need to demonstrate that their programs are actually training graduates to earn a living. But a pending piece of legislation seeks to give these schools a free pass to billions of dollars in federal student aid.
  • In response, a coalition of 45 organizations – working on behalf of students, consumers, veterans, faculty and staff, civil rights, and college access – sent a letter [PDF] to legislators today expressing their strong opposition of the Supporting Academic Freedom through Regulatory Relief Act.
  • The bill, which was referred to the House Education and the Workforce Committee after being introduced in February, would essentially repeal the recently finalized gainful employment regulation that requires all career education programs receiving Title IV funding “prepare students for gainful employment in a recognized occupation.”
  • Under the new gainful employment rules [PDF], for-profit colleges will be at risk of losing their federal aid should a typical graduate’s annual loan repayments exceed 20% of their discretionary income, or 8% of their total earnings.
  • Discretionary income is defined as above 150% of the poverty line and applies to what can be put towards non-necessities.
  • So for example, say the typical recent graduate of a career education program earns $25,000. That student would need to average annual student loan payments less than $2,000, or the school would be at risk for losing federal financial aid.
  • The Supporting Academic Freedom through Regulatory Relief Act would repeal those standards and prohibit the Secretary of Education from engaging in regulatory outreach with regard to educational institutions eligibility under title iV of the Higher Education Act.
  • Among other things the bill aims to ban the “Education Department from carrying out, developing, refining, promulgating, publishing, implementing, administering, or enforcing a postsecondary institution ratings system or any other performance system to rate institutions of higher education.

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