Proposed Gainful Employment Rules Would Tighten Eligibility For Programs

Career College Central summary:

  • Vocational programs would have a tougher time qualifying for federal student aid, and some would lose their eligibility immediately, under the latest draft "gainful employment" rules from the U.S. Education Department.
  • The revised rules, which federal negotiators will debate at a three-day meeting here next week, would judge programs based not only on their graduates' student-loan-debt burdens, but also on their former students' ability to repay their loans, whether or not the students graduated.
  • The rules would also require risky programs to seek federal approval to award aid and would require all programs to have the necessary state and accreditor approvals to qualify students to sit for licensing examinations.
  • Programs that were at risk of losing eligibility at the end of a year would have to set aside money for borrower relief, either through a letter of credit, a state guarantee, or the federal withholding of student-loan dollars.
  • The department did not offer an analysis of the effect of the proposed changes, but it is highly likely the new rules would disqualify more programs than the original rules, which were struck down last year by a federal judge. In many ways, the new draft is the strictest and most complex "gainful employment" proposal the department has offered since it began negotiations with stakeholders four years ago.

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