‘Gainful Employment’ Rules Leave Many Disappointed

Ninety-thousand comments and numerous meetings later, a yearlong effort to draft new regulations for career-college programs has resulted in scant satisfaction, from supporters and critics alike, though the programs clearly gained more time to change their ways.

At the heart of the battle are 14 regulations — including the most controversial, on gainful employment — aimed at improving the transparency and quality of career programs. Under the new regulation, a program can lose access to federal student aid if too many of its students fail to find "gainful employment" as defined by three measures linked to loan repayment and income.

While the rule applies to occupational-training programs at all types of institutions, for-profit ones are most likely to be affected because of the high cost of tuition coupled with high student-loan debt and, often, poor job prospects. Students at proprietary colleges represent 12 percent of higher education enrollment, yet they take out 26 percent of all student loans and represent 46 percent of all student-loan dollars in default.

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