New Student Loan Reform will Hit Working Professionals the Hardest

Working professionals who are also pursuing a degree may be the hardest hit in a new initiative by President Obama and the U.S. Department of Education according to Education Management Corporation.

The plan will tie student loans to estimated starting salaries, and it includes a definition "Gainful Employment," that one of the largest providers of post-secondary education in North America opposes. They argue that the policy, with the current "gainful employment" definition, is unfair for employed adult learners.

Education Management Corporation’s response indicates that the Department is overstepping its bounds by setting this definition as it does not have the authority to implement the regulations. The Corporation discourages the Department from moving forward, but if they do, Education Management strongly encourages the Department to make changes to the regulation "to address legal, policy, and fairness concerns."

"We believe that the proposed rule is counter to President Obama’s goal of the United States becoming the world leader in college graduates by 2020, and impacts quality institutions rather than the ‘bad actors,’ as stated by the Department,” said Todd S. Nelson, CEO of Education Management in a company press release.

“Over the past year, we have worked closely with Secretary Duncan and his staff, members of Congress, and other stakeholders across higher education to facilitate proposals that focus on the issue of student debt without blocking access to quality education,” Nelson explained. “By providing students with the tools they need to make fully-informed decisions about their education, we can ensure that all schools – traditional and proprietary alike – are working to address debt concerns, while preserving students’ ability to choose which schools best serve their needs in the pursuit of a college degree. Our proposed modifications to the rule continue in that spirit,” he concluded.

Education Management’s institutions provide an education for a wide range of student demographics, with large representations of minorities, women, non-traditional students, and working adults. Education Management feels their students would be burdened, not helped by this change in policy.

The Department’s changes will become effective July 1, 2001 and Education Management plans to be in full compliance with the reporting and disclosure requirements on December 31st, according to Department’s notice of proposed rulemaking issued on June 18th.


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