SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
DoE Moves Forward With Gainful Employment Rule for For-Profit Colleges
Jun 02, 2011
The Department of Education advanced their gainful employment rule that targets for-profit colleges and vocational programs who have successfully used public money through grants and student loans to increase their business, while delivering little of value to students.
"The rule effectively would shut down for-profit programs that repeatedly fail to show, through certain measures, that graduates are earning enough to pay down the loans taken out to attend those programs. Advocates say it addresses the chief complaint against for-profit schools, that students emerge from them with too much debt and too little earning power.
'The quality here has been very uneven,' Education Secretary Arne Duncan said of the industry Wednesday in a conference call with reporters. 'There have been some absolute superstars. And there have been some players whose intentions, quite frankly, we doubt.'
The 3 million students in for-profit schools have already felt an impact. In anticipation of the rule, large for-profit providers have slowed enrollment, tightened entry standards and warned students against excessive debt."
Students at for-profit colleges make up 12% of the total college population, but commit half of the student loan defaults. Something had to change here.
For-profit colleges must now pass three tests in order for their qualified students to become eligible for federal grants and student loans, which is how the bulk of students at these colleges get the money to enroll. At least 35% of former students must be actively paying down their loans. Graduates must be spending less than 30% of their discretionary income on loan payments. And they must spend less than 12% of total income on loan payments.
The main concession to the industry in the rule is a multi-year grace period for the colleges before they lose access to federal funding through loans and grants. Previously, the for-profits would have lost this power immediately after failing the three tests; now they get until 2015 to improve their programs, and could only lose funding after that if they fail the test three times in four years.
I don't think they need a grace period. But at the root, this is about an industry propped up with government money (90% of their profits come from federal aid) preying on a vulnerable population: poor and minority students who trust that they will benefit from matriculating. They mainly end up with a lot of debt, financed by the government, funneled from them into the bank accounts of the for-profit colleges. The Administration faced a lot of pressure from Congress - members of both parties - not to promulgate this rule, and they had to put up with a lot of silly scandalmongering from allegedly liberal activists bought off by the indudstry. I'm glad they stood relatively strong and protected students who were getting ripped off.
The New York Times has more.
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, The U.S. is on a fast track to authoritarianism like nothing I've ever seen. Meanwhile, corporate news outlets are utterly capitulating to Trump, twisting their coverage to avoid drawing his ire while lining up to stuff cash in his pockets. That's why I believe that Common Dreams is doing the best and most consequential reporting that we've ever done. Our small but mighty team is a progressive reporting powerhouse, covering the news every day that the corporate media never will. Our mission has always been simple: To inform. To inspire. And to ignite change for the common good. Now here's the key piece that I want all our readers to understand: None of this would be possible without your financial support. That's not just some fundraising cliche. It's the absolute and literal truth. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. Will you donate now to help power the nonprofit, independent reporting of Common Dreams? Thank you for being a vital member of our community. Together, we can keep independent journalism alive when it’s needed most. - Craig Brown, Co-founder |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
The Department of Education advanced their gainful employment rule that targets for-profit colleges and vocational programs who have successfully used public money through grants and student loans to increase their business, while delivering little of value to students.
"The rule effectively would shut down for-profit programs that repeatedly fail to show, through certain measures, that graduates are earning enough to pay down the loans taken out to attend those programs. Advocates say it addresses the chief complaint against for-profit schools, that students emerge from them with too much debt and too little earning power.
'The quality here has been very uneven,' Education Secretary Arne Duncan said of the industry Wednesday in a conference call with reporters. 'There have been some absolute superstars. And there have been some players whose intentions, quite frankly, we doubt.'
The 3 million students in for-profit schools have already felt an impact. In anticipation of the rule, large for-profit providers have slowed enrollment, tightened entry standards and warned students against excessive debt."
Students at for-profit colleges make up 12% of the total college population, but commit half of the student loan defaults. Something had to change here.
For-profit colleges must now pass three tests in order for their qualified students to become eligible for federal grants and student loans, which is how the bulk of students at these colleges get the money to enroll. At least 35% of former students must be actively paying down their loans. Graduates must be spending less than 30% of their discretionary income on loan payments. And they must spend less than 12% of total income on loan payments.
The main concession to the industry in the rule is a multi-year grace period for the colleges before they lose access to federal funding through loans and grants. Previously, the for-profits would have lost this power immediately after failing the three tests; now they get until 2015 to improve their programs, and could only lose funding after that if they fail the test three times in four years.
I don't think they need a grace period. But at the root, this is about an industry propped up with government money (90% of their profits come from federal aid) preying on a vulnerable population: poor and minority students who trust that they will benefit from matriculating. They mainly end up with a lot of debt, financed by the government, funneled from them into the bank accounts of the for-profit colleges. The Administration faced a lot of pressure from Congress - members of both parties - not to promulgate this rule, and they had to put up with a lot of silly scandalmongering from allegedly liberal activists bought off by the indudstry. I'm glad they stood relatively strong and protected students who were getting ripped off.
The New York Times has more.
The Department of Education advanced their gainful employment rule that targets for-profit colleges and vocational programs who have successfully used public money through grants and student loans to increase their business, while delivering little of value to students.
"The rule effectively would shut down for-profit programs that repeatedly fail to show, through certain measures, that graduates are earning enough to pay down the loans taken out to attend those programs. Advocates say it addresses the chief complaint against for-profit schools, that students emerge from them with too much debt and too little earning power.
'The quality here has been very uneven,' Education Secretary Arne Duncan said of the industry Wednesday in a conference call with reporters. 'There have been some absolute superstars. And there have been some players whose intentions, quite frankly, we doubt.'
The 3 million students in for-profit schools have already felt an impact. In anticipation of the rule, large for-profit providers have slowed enrollment, tightened entry standards and warned students against excessive debt."
Students at for-profit colleges make up 12% of the total college population, but commit half of the student loan defaults. Something had to change here.
For-profit colleges must now pass three tests in order for their qualified students to become eligible for federal grants and student loans, which is how the bulk of students at these colleges get the money to enroll. At least 35% of former students must be actively paying down their loans. Graduates must be spending less than 30% of their discretionary income on loan payments. And they must spend less than 12% of total income on loan payments.
The main concession to the industry in the rule is a multi-year grace period for the colleges before they lose access to federal funding through loans and grants. Previously, the for-profits would have lost this power immediately after failing the three tests; now they get until 2015 to improve their programs, and could only lose funding after that if they fail the test three times in four years.
I don't think they need a grace period. But at the root, this is about an industry propped up with government money (90% of their profits come from federal aid) preying on a vulnerable population: poor and minority students who trust that they will benefit from matriculating. They mainly end up with a lot of debt, financed by the government, funneled from them into the bank accounts of the for-profit colleges. The Administration faced a lot of pressure from Congress - members of both parties - not to promulgate this rule, and they had to put up with a lot of silly scandalmongering from allegedly liberal activists bought off by the indudstry. I'm glad they stood relatively strong and protected students who were getting ripped off.
The New York Times has more.
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.