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Colleges Face New 'Gainful Employment' Regulations For Student Loans
HughPickens.com writes: Education Secretary Arne Duncan says the Education Department wants to make sure loan programs that prey on students don't continue their abusive practices. Now Kimberly Hefling reports that for-profit colleges who are not producing graduates capable of paying off their student loans could soon stand to lose access to federal student-aid programs. In order to receive federal student aid, the law requires that most for-profit programs, regardless of credential level, and most non-degree programs at non-profit and public institutions, including community colleges, prepare students for "gainful employment in a recognized occupation" (PDF). To meet these "gainful employment" standards, a program will have to show that the estimated annual loan payment of a typical graduate does not exceed 20 percent of his or her discretionary income or 8 percent of total earnings.
"Career colleges must be a stepping stone to the middle class. But too many hard-working students find themselves buried in debt with little to show for it. That is simply unacceptable," says Duncan. "These regulations are a necessary step to ensure that colleges accepting federal funds protect students, cut costs and improve outcomes. We will continue to take action as needed."
But not everyone is convinced the rules go far enough. "The rule is far too weak to address the grave misconduct of predatory for-profit colleges," writes David Halperin. "The administration missed an opportunity to issue a strong rule, to take strong executive action and provide real leadership on this issue." The final gainful employment regulations follow an extensive rulemaking process involving public hearings, negotiations and about 95,000 public comments and will go into effect on July 1, 2015.
"Career colleges must be a stepping stone to the middle class. But too many hard-working students find themselves buried in debt with little to show for it. That is simply unacceptable," says Duncan. "These regulations are a necessary step to ensure that colleges accepting federal funds protect students, cut costs and improve outcomes. We will continue to take action as needed."
But not everyone is convinced the rules go far enough. "The rule is far too weak to address the grave misconduct of predatory for-profit colleges," writes David Halperin. "The administration missed an opportunity to issue a strong rule, to take strong executive action and provide real leadership on this issue." The final gainful employment regulations follow an extensive rulemaking process involving public hearings, negotiations and about 95,000 public comments and will go into effect on July 1, 2015.
well its a start in the right direction. I blame the idea of federal loans for the high cost to begin with
,and it always costs us avg americans the most
lets face it, college is not for everyone. but since the failure known as the dept of ed, and the student loans for all, the colleges have little incentive to ensure their students do well, their only goal is to ensure the students can pay. and if the government is footing the bill, its in their best interest to enroll as many people as possible, as they will get paid regardless by the feds (the tax payers)
unintended consequences seem to sneak up everytime the feds try and do anything
have you seen my sig? there are many others like it but none that are the same
What I find disturbing is that at age 18, we're allowed to go to war, vote, enter contracts and do just about anything (except drink alcohol... that's another weird one). Yet, we still seem to treat these same 18-year-olds like children when it comes to them understanding the loans that they voluntarily enter into. I never found loans to be a difficult concept. You borrow money now, you pay it back later with interest.
If you don't want massive loans, pick a state school. There's a lot of state schools that offer in-state tuition rates to out-of-state students, in addition to your own state's schools. There are a lot of choices without picking private for-profit schools. Now, there might be some more niche degrees only offered by a limited number of colleges, but those are much, much more fewer than the number of students who claim to be victimized by student loans.
I'm not saying that *no* colleges have predatory loan practices, or that *no* students are victimized. I'm just saying that a great deal of students who claim to be victimized are experiencing something closer to buyer's remorse at the first major, adult decision. Some of the blame for the student loan situation *should* sit with the students who entered into these agreements.
Well, if someone comes from a wealthy family and can afford it, sure they can take nothing but philosophy and underwater basket weaving all they want.
But it makes sense that if loans that need to be paid back are being given out, it makes sense that you lower the risk of default (or misery of lifetime debt) by loaning to those that are studying something with real potential to go on in life and repay the loans.
It doesn't make sense to give $120K in loans to someone taking Medieval Lesbian Literature studies as a major, does it? How the hell will they ever pay that back with their glorious career as a burger flipper at McD's?
Most people go to college to get a degree to get them a foot in the door at a good job at the end. It makes sense to loan out in amounts equitable to what they likely will make at the end of their degree run.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
Every high school counselor in the country as well as a fuckton of parents believe otherwise. College is the new high school. Try getting a so-called "entry-level job" without a degree and without multiple years of experience you can't get without already having the job. Granted, it can happen, but there's a reason that lots of people have been unemployed for months or even years. Employers want employees that require zero training, despite the harsh reality that employees can't do the job from day one without having already received training from an employer anyway.
It doesn't make sense to give $120K in loans to someone taking Medieval Lesbian Literature studies as a major, does it?
It makes even less sense to take out $120k in loans to study Medieval Lesbian Literature. Let's put some of the blame where it belongs -- on the students who take out ridiculous loans to study financially worthless subjects.
If you tie government funding of colleges to the salaries of the graduates, you pretty much eliminate the option for someone to take Medieval yada yada because the college won't be able to afford to offer it. This will be just one more step into turning colleges and Universities into trade schools.
How the hell will they ever pay that back with their glorious career as a burger flipper at McD's?
By arbitrarily raising the minimum wage, of course.
It makes sense to loan out in amounts equitable to what they likely will make at the end of their degree run.
It makes more sense to take out loans only "equitable" to what you expect to make in income.
Well, if someone comes from a wealthy family and can afford it, sure they can take nothing but philosophy and underwater basket weaving all they want.
"I'm sorry, but the philosophy and basket weaving departments are being eliminated because there is insufficient funding to hire the professors that teach those topics."
That someone made bad choices in no way entitles Mickey Dee to be effectively subsidized by tax money in their quest to give as many people as possible various horrible metabological illnesses. Minimum wage needs to be high enough that the employee doesn't need any kind of additional support, otherwise you're simply building a corporate welfare state.
Also, I'm not entirely certain what you mean by "deserving" here. Are bad - by which I presume you mean economically unsuccesfull - choices some kind of sin that needs to be punished?
An intelligent human should also realize that a society where people can't afford to have children is doomed. A Mensa member might comprehend that it's not possible to know your economic fortunes for two decades or so it takes to rise a kid. And a once-in-a-century genius could even hypothesize it's cheaper to ensure children have a stable and safe environment to grow up in than to deal with the consequences if they don't, even after we factor in the horrendous consequence of poor single mothers not having maximally miserable lives.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.