Gainful Employment Rulemaking on Career Education Programs: CRL Memo to Negotiators
The Department is drafting a Gainful Employment rule to ensure that career education programs eligible for federal financial aid do not saddle students with loans they cannot repay. Under this proposal, programs that repeatedly leave students with high debt and few employment prospects would be cut off from federal funding. This rule would replace a 2011 rule that was not implemented.
Excerpt from CRL memo to negotiators of a new 2013 rule:
The 2011 gainful employment final rule consisted of three accountability metrics that covered both graduates and non-completers: (1) a repayment rate, which took into account all attendees of a given career education program (both graduates and non-completers) and (2) two debt-to-earnings ratios for graduates only. Programs that repeatedly failed all three metrics could become ineligible for Federal financial aid. The threshold for failing the repayment rate metric was successfully challenged in court, which led to most of the rule being vacated.
The Department of Education has re-started the negotiated rulemaking process, and is now proposing to drop the repayment rate metric and include only the debt-to-earnings ratios. The effect of this change is that non-completers are no longer taken into account. CRL believes it is a priority to consider the outcomes of all attendees—in some way—in any gainful employment rule.
(Click on link above for full memo.)
Published: September 9, 2013