For-Profit Colleges Decry Gainful-Employment Rule As ‘Arbitrary And Biased’

Career College Central summary:

  • The for-profit-college industry’s trade association, backed by a 100-page report by economists, is coming out swinging against the U.S. Department of Education’s draft "gainful employment" regulation. The proposal is "flawed, arbitrary, and biased," and will deny educational access to as many as 7.5 million students over the next decade, contends the Association of Private Sector Colleges and Universities, or Apscu, in documents it is filing on Tuesday.
  • In a preview of what will be its likely legal challenge should the rule be adopted in its current form, Apscu attacks the department for relying on "discredited sources" in developing the regulation and says the rule would affect far more for-profit-college students than the department has projected.
  • Tuesday is the deadline for public comments on the rule, and among the many other groups also expected to weigh in is the American Council on Education, which has been circulating a draft of a letter that praises the idea of "smart regulations" but concludes that this proposal "falls short." The council, and other organizations expected to sign its letter, will ask the department to provide more exemptions for programs where few students borrow and default and where the amounts they borrow are low. The letter also questions the "mind-numbing" number of reporting requirements the rule would impose on all institutions.
  • The gainful-employment rule, which would apply to all for-profit-college programs as well as career-focused programs at public and private nonprofit colleges, would deny federal student aid to programs where too many students default on their loans or where their debt, relative to their earnings or discretionary income, is too high.
  • A number of student, veteran, and consumer-advocacy groups, as well as several Democratic U.S. senators and representatives, have been urging the department to strengthen the rule. On Tuesday a coalition of more than 50 such groups repeated that call in a letter to the education secretary, Arne Duncan. The letter says that the regulation­—with some changes, such as limits on enrollments in poorly performing programs and provisions for financial relief to students in programs that fail—is "urgently needed."
  • Meanwhile, three dozen members of the House of Representatives, both Democrats and Republicans, have asked their colleagues to bar the department from proceeding with the rule.

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