New ‘gainful employment’ rules will hurt students by reducing choices and limiting access

Last week the Department of Education released its final "gainful employment" regulations. These new rules will create piles of new red tape for career colleges and universities. Even worse, they will most likely result in fewer choices for students, lost opportunities for those seeking career andtechnical education and, ultimately, less innovation.

By law any program receiving federal student aid at a for-profit school must "prepare students for gainful employment in a recognized occupation." Congress has never defined the term "gainful employment" and the Department has historically granted eligibility to programs preparing students for careers recognized by the Labor Department.

However, the Department’s new regulations would negatively impact predominantly one group of schools by requiring these institutions or programs to calculate adebt-to-income ratio or the loan repayment rate for students. Those schools that don’t meet the Department’s process based on debt-to-income ratio or repayment rates stand to lose access to federal student aid programs.

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The Hill’s Congress Blog

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