Sweeping Higher Ed Overhaul

Career College Central summary:

The Department of Education’s regulatory measures could affect which for-profit colleges get federal financial aid, whether parents can easily get loans for their children’s college education and how colleges and programs like Teach for America prepare teachers for the classroom. The White House said in documents accompanying the State of the Union on Tuesday night that President Barack Obama also will use executive authority to encourage colleges to innovate. The Education Department was already working on this project, proposing waivers to some financial aid rules so colleges have space to experiment.
In higher ed, nearly all federal financial aid goes directly to students, not to states. And Congress has resisted the president’s 2012 proposal to create a higher education version of the Race to the Top grant program that encouraged states and school systems to go along with his agenda. So the administration turned more to its traditional regulatory sticks for colleges and universities, with mixed results so far.
Two regulatory proposals are in the works, at least in theory. Their negotiations concluded without consensus, meaning the Education Department has free rein to draft the regulations on its own. One rule would govern vocational programs, as well as all programs of study at for-profit colleges. If graduates of those programs can’t find “gainful employment,” defined as a job that allows them to pay back their loans, future students who hope to enroll in that field would lose access to federal financial aid.
This is the Education Department’s second try at writing a version of this rule: The first attempt, finalized in 2011, was thrown out in court. The rulemaking process for a second attempt ended in December, and a draft of the new regulations is expected in March. Only gainful employment can be said to be on the fast track. But it’s not a given that any program will lose its eligibility for federal financial aid as a result.
Education Department analyses of an early department proposal estimated that about 13 percent of programs would fail, either because their graduates’ debts are too high in proportion to their incomes or because too high a percentage of students default on their loans. But under that proposal, programs would have to fail twice in three years to lose their eligibility. Given that the 2014-15 academic year is the earliest a rule could take effect, it’s possible — but not assured — that some programs of study would lose eligibility near the end of Obama’s term.
Another rulemaking panel also failed to reach consensus on new rules for teacher preparation programs in 2012. Those regulations are still stuck in Education Department purgatory. They’re widely expected to follow other administration proposals to hold colleges of education accountable for how their graduates’ pupils do on standardized tests.

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