Feds take steps to safeguard students from unaffordable for-profit colleges – NPR

Last Updated on September 28, 2023 by Robert C. Hoopes

The Biden administration is cracking down on for-profit colleges with new federal regulations aimed at holding these institutions accountable for student outcomes. The announcement of the gainful employment rule is a significant step towards safeguarding students from making a bad investment in for-profit schools and non-degree certificate programs.

Under the gainful employment rule, programs will now be required to demonstrate that graduates can not only afford their student debt payments but also make more money than an adult in their state who didn’t attend college. This rule serves as a warning for students contemplating federal student loans, ensuring that they are aware of the potential risks associated with enrolling in a program that fails to meet these metrics.

To further enforce accountability, any program that fails the metrics twice within a three-year period will lose its eligibility to collect federal student aid money from students. This penalty will undoubtedly provide incentives for these programs to prioritize student outcomes.

Scheduled to take effect in the next school year, starting on July 1, 2024, the rule is expected to impact approximately 1,700 programs, predominantly at for-profit schools. According to data from the Education Department, these programs are projected to fall short of the thresholds set forth in the rule.

While the gainful employment rule has garnered support for its efforts to protect students, critics argue that it unfairly excludes bachelor’s degrees and most graduate programs at traditional public and nonprofit colleges. These critics believe that all programs, regardless of institution type, should be subject to the same scrutiny.

Interestingly, the gainful employment rule is not entirely new. It was initially implemented under the Obama administration in 2014 but was subsequently delayed and ultimately scrapped by the Trump administration. However, the Biden administration listened to concerns and revived the rule with an updated proposal, which received significant feedback, particularly from organizations in the cosmetology industry.

Despite the momentum behind the rule, its implementation timeline may face challenges. The outcome of the next presidential election could potentially impact the rule’s fate, considering that a Republican winning the White House could reconsider its enforcement.

The final rule is set to be published in the Federal Register on October 10, signifying a crucial step towards the realization of much-needed reform for for-profit colleges and non-degree programs. Students across the country eagerly await the positive changes that will come with increased accountability in their pursuit of higher education.