Lessons (Not) Learned

Career College Central Summary:

  • If that wasn't bad enough, the department's thirst for private-sector blood continues as it looks to finalize its proposed "gainful employment" rules, which would devastate thousands of good programs offered at proprietary colleges by restricting their access to Title IV federal student aid if they don't meet certain arbitrary metrics. Millions of students rely on these programs to learn the necessary skills to enter today's hyper-competitive workforce and ultimately improve their lives.–This growing trend of taking action without considering the real-world consequences of those actions is clearly illustrated by the recent Parent PLUS loan meltdown, which prevented thousands of black Americans from enrolling in college and placed at risk many more in terms of their ability to continue their higher education.
  • The changes tightened the credit requirements needed to access the loans, resulting in a spike of denials, including for many who had been previously eligible for the loans. The change was made without convening a rule-making panel, and the department failed to do so much as issue a letter to colleges explaining it. Instead, the impact of the change manifested itself as students at many Historically Black Colleges and Universities (HBCUs) lost access to their loans. The change disproportionately affected HBCUs, causing 28,000 students attending these schools to be denied loans and costing HBCUs upwards of $300 million in lost grants from federal agencies and lost tuition revenues.
  • As noted by the Associated Press, families of students at HBCUs were twice as likely to use the program, and, according to figures from the United Negro College Fund, the changes in the PLUS loan program have blocked as many as 400,000 students nationwide from enrolling in college. The changes were made to bring the Department of Education's requirements in line with industry standards, according to a department spokesman, but the department's failure to recognize the impacts of its decision created a crisis which is only now being addressed by the administration.
  • Moreover, in many cases, the public colleges that the administration promotes as an alternative have worse outcomes than for-profit schools, with subpar academic standards and high percentages of students failing to graduate on time. Despite this, the administration continues to defend these schools, shielding them from their proposed regulations and bailing out even the poorest performers. One need look no further than the bailout of the City College of San Francisco, which suffers from higher default rates and lower graduation rates than Corinthian Colleges, to grasp the department's double standard.

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