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CRL Opposes Rollbacks of Protections That Help For-Profit College Borrowers

Thursday, August 17, 2017
Ashley Harrington

Gainful Employment Rule Should Focus on Students, Not Institutions

WASHINGTON, D.C. – Today, the U.S. Department of Education announced that it would loosen regulatory standards affecting for-profit colleges and other career education programs. Failing institutions will now have until February 2018 to submit alternate earnings appeals and until October 2017 to submit an intent to appeal. Further, in submitting appeals, these institutions also will no longer be required to meet threshold response rates for graduate survey participants or ensure that any state data used is representative of the cohort. This dilutes key indicators of program effectiveness.

Consumer and education advocates point out that this action does not does not bode well for the upcoming new rulemaking on Gainful Employment that the department announced in June.

Center for Responsible Lending (CRL) Counsel and Special Assistant to its President Ashley Harrington released the following statement:

The Gainful Employment rule was originally proposed in response to the thousands of for-profit students who incurred deep student loan debts in pursuit of a career and skills that would provide promised employment and earnings that never materialized. Education and consumer advocates heralded its development and the program-level accountability it was intended to deliver.

Once again what today’s announcement makes clear is that the Department of Education is focused on serving for-profit colleges rather than students. Instead of clear-cut standards for all career training institutions, the Department now proposes a case-by-case review on challenges to the quality of the education received. In addition, students will not be given warnings of pending and prior actions that challenged how well the cost of their education compared to the promises made in marketing and admissions.

A recent and narrow court order solely pertaining to members of the American Association of Cosmetology Schools will not suffice as justification to ignore the pleas of students across the country who have already been harmed financially and educationally. While a small window of opportunity to comment is open, the Center for Responsible Lending urges students and other stakeholders to join us in vocal opposition to this action and any future actions taken by the Department at the expense of students and taxpayers.

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Ricardo Quinto at ricardo.quinto@responsiblelending.org.