For-Profit Colleges Fear Another Attack
Career College Central summary:
A federal panel will tackle one of the most controversial college regulations in Department of Education history next month. The rule was meant to ensure that graduates of for-profit colleges are getting jobs and repaying their loans, but it was struck down last summer after a court challenge — so the department is going back to the drawing board.
The 15-member panel picked this week to rewrite the rule includes some prominent critics of for-profit colleges, who are accusing the Department of Education of bias against the industry.
The department’s 2011 “gainful employment” rule was a federal response to allegations that for-profit colleges were graduating students who wound up deeply in debt for useless degrees. It required those colleges to meet one of three standards to participate in federal financial aid programs.
Programs had to meet one of three benchmarks: At least 35 percent of graduates had to be repaying federal student loans, or have total loan debt of less than 30 percent of their discretionary income or 12 percent of their overall income. They would lose eligibility if they couldn’t meet any benchmark for three out of four years. The rule also applied to vocational and certificate programs at nonprofit and public colleges.
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