Slashdot Mirror
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.
"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.
This is the billboard with neon flashing lights we've all been waiting for: the college degree is the new high school diploma.
You got all their money, now make senior classes impossible to pass except for only the best and brightest.
Finally we are coming to some sort of sense when it comes to education in this country. I feel for the college students that don't know any better and major in something only to find themselves working a minimum wage job with a hefty loan to repay. At least we have a check and balance now and hopefully colleges will alter their programs to provide more marketable skills in the future.
Why the emphasis on "for-profit" schools. Are non-profit and/or state-sponsored schools immune from irresponsible and predatory behavior, in the authors opinion? Is a 100K student loan and a useless degree in Whatever-Studies from Big-State-U any less of a swindle than a 100K student loan and a Whatever-Tech degree from DeVry?
And just how many graduates from "non-profit" state schools are given degrees in unemployable fields?
No boom today. Boom tomorrow. There's always a boom tomorrow. - Cmdr. Susan Ivanova
In your haste to make a "communism" reference, you missed: 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"
A liberal arts or pure science education is not meant to be a professional degree. It's a way to learn a lot about a particular topic, independently of whether that directly helps your employment chances or not.
Historically, there was a fairly sharp delineation between universities and vocational schools--even "white collar" vocational schools like engineering were at separate institutions (often A&T or A&M schools), and lawyers and doctors were primarily apprenticed. At some point doctors, and later lawyers, became highly skilled professions that needed more formal training. To a degree it made sense to combine medical schools with pure sciences under one university, since some of the basics overlap.
But it had the unfortunate side effect of starting the thought in people's minds that universities are vocational institutions, rather than institutions of higher learning. I certainly don't mean to insinuate that a liberal arts degree has no application in the real world--quite the contrary. But it's intentionally targeted at longer-term learning rather than particular vocations per se, and not everyone who pursues a higher degree does so as a job entree.
Nonetheless, the law schools and med schools were followed by a spate of mergers between technical institutes and universities. Suddenly non-university vocational institutes were looked on as crappy and inferior, and it became a mantra (for no good reason) that you needed a 4-year college/university degree to succeed at jobs that historically had been done quite successfully without it. Even a shorter professional program started to become more prestigious if allied with a 4-year college, for no good reason (e.g. nursing schools at universities being, generally, valued more highly than independent nursing colleges).
The result was a massive spike in the number of people going to 4-year colleges--that number has sextupled or so over the past 60ish years--and a massive decline in the number of people going to vocational and technical schools. The latter have become a joke to the point where vocational school brings to mind TV commercials for Devry or Andover tractor trailer driving or dental hygeniest schools.
The downfalls of this are manifold. University prices skyrocket as everyone seeks to get in, whether they are really interested in a university degree or not. Vocational schools fold and a large percentage of the people who'd have attended them are forced into universities, exacerbating #1. Jobs see more and more college degrees, and start expecting them, making people start viewing colleges and universities as professional/career prep schools.
And universities become disincentivized to teach pure liberal arts or even theoretical mathematics, as they start being judged based on how good they are as job factories rather than as educational institutions; the result is a short-term focus that harms long-term research and eventually job opportunities (much akin to eliminating R&D budgets, but on a national scale).
rage, rage against the dying of the light
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
In theory restricting by college is a good idea, but it's complex and doesn't hit the root cause.
What allows availability to loans to go nuts is the fact that you can't use bankruptcy to get out of loans. If bankruptcy were an option, lenders would be significantly more careful about who they lend to, and we wouldn't need an extra law aimed at specific questionable institutions.
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.
My ex-roommate took out $25,000 in loans to study automotive industrial design on the West Coast because... he likes cars. Never mind that the only kind of jobs he ever had were logistic positions for warehouses. Until Telsa set up shop in Silicon Valley, it's a fairly useless degree.
If you go to university to get job training you are doing it wrong. That is not what university is meant to be.
I think that's hardly the college's fault. It's one thing if they don't give you practical knowledge in the field, but a different thing if YOU CHOOSE a field with poor job prospects. I don't understand why people don't do a little research into the job prospects for their major. Yeh the market fluctuates, but in 2 years its not going to change that much. (you spend two years on course class work, and can change your major without a lot of trouble and do the final 2 years) There's tons of sites that give you an idea of what potential salary would be.
Some people make the choice fully knowing of the poor job prospects. You want a burger with peanut butter and pineapple on it? fine, that's what you get, but you eat and don't blame the cook if it's gross. That's a calculated risk you are taking. Investment firms have no responsibility to prevent you from buying stocks that will do poorly.
On the other hand, if you want to make an argument on the basis of public universities being partially funded by tax dollars, and they have an obligation to this or that to contribute meaningful skills to the community etc., then that might be a valid train of though.
I started looking into my major interests while I was in high school. Between then and the first two years of college I changed my mind 4 times on what I wanted to do.
1. Should be something you don't hate to do all the time. It doesn't have to be something you love, but at minimum not hate.
2. Should be something that can make money. Doesn't have to be alot, just enough that you aren't constantly struggling.
3. Should be something you are somewhat good at. You don't have to be the greatest, but if it is something you struggle at then you may have trouble keeping jobs.
Those are the three simple things that guided me. I love my job. I make plenty of money. I feel I do a good job.
Anything like game design, art, or music is going to have more people competing for fewer jobs because it is something people really want to do. Doesn't mean you shouldn't do it, but maybe if it's what you really want to do you should apply some of that passion to finding alternative learning resources, because you are taking a risk going down that path and a huge debt isn't something you should be accumulating if you are uncertain of your employability. Maybe get a computer science degree, get a job, and stretch your game design muscles in your free time.
Tell that to HR will you?
Great post. One point you missed, though:
Suddenly non-university vocational institutes were looked on as crappy and inferior, and it became a mantra (for no good reason) that you needed a 4-year college/university degree
It's the "no good reason" part that's the real problem - because there are reasons and they are good for some people, if not most.
First, there's an oversupply of workers for an undersupply of jobs, so why not be picky with your applicants if you're an employer? A stupid regulation like "4-year degree required" gets rid of more potential bad employees than it excludes potential good employees for many jobs. Part of this is that high school diplomas are merely attendance certificates now, but that's only a tiny part. A bigger part is a slowing of the economy, in real terms, since the early 70's, and a lack of real, good jobs. Stagflation was papered over with sheets of hundred dollar bills - the structural issues were never "solved" and still aren't. We're about twelve miles up on the structural Jenga stack at this point.
The result was a massive spike in the number of people going to 4-year colleges--that number has sextupled or so over the past 60ish years
Yes! There's your oversupply.
and a massive decline in the number of people going to vocational and technical schools
and there's definitely an undersupply there. Why? One is heavily subsidized and one is not. The one that gets the massive subsidies (grants, student loan programs below market rates, etc.) gets two things - an influx of demand, and a concomitant increase in price. It used to be 4-year students could work during the summers to pay for their tuition - but they didn't get Pell Grants, so that was awful.
Tech school prices are nowhere near as inflated, at least yet. People can still afford to go to tech school, and they're, in large numbers, starting to wise up about that. Let's hope nobody starts trying to heavily subsidize it.
But why did the US go full-on socialism with the 4-year student loan program, in particular? There's an assumption that if only the US can produce a huge number of university brainiacs then it can maintain its economic leadership position in the world, maintain its high tax base despite the competition from cheaper labor doing the same work, and therefore maintain its World Police stance. Because if it can't, China is going to eat the US's lunch, and that would be bad for the people in power. People in Power who have lots of university degrees and are, upon self-reflection, smarter than everybody else in the room, so the degrees must be causal.
Dirty secret: populations are, on average, just as smart from generation to generation, no matter how diplomas are being hung on walls.
Second dirty secret: a China-dominated world will cause the citizens of the US to be as miserable as the citizens of Luxembourg and Denmark are today. I'm just hoping the death throes of the Empire don't include firing shots at the new guy. I'm sure some school offers a degree in how starting unwinnable wars is good for an economy.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
from the summary:
A secret about those private "not for profit" colleges which the Department of Education exempted from that regulation. They are for profit. Huge profits. The distinction is not that these institutions do not earn profits, but rather that they are exempt from business taxes on those profits and the income accrues to the administration and faculty instead of to business owners.
So I had a friend in college who worked part-time in the payroll office and had access to the campus salary database. From her dorm room. So one evening she asks if I want to know what any of my professors make. Looked them all up. In 2014 dollars the mid-level salary for recently-tenured faculty was about $300,000 / year. Deans, provosts and presidents made much more.
Subsidized college loans have created a glut of education dollars and "not-for-profit" educators are raking them in. They are not opposed to earning huge profits themselves, the just do not want competition from other colleges which are run as business. So they lobbied Arne Duncan to enact a regulation which, for no legitimate rationale, applies only their competition.
Don't believe me? Universities try to keep this information locked away tightly but occasionally it leaks out. Here, for, example, is what Treasury Secretary Jack Lew received as severence pay from New York University:
NYU is a private "non-profit". And, as that link indicates, as such they receive additional benefits from the federal government beyond tax exemption.
Ceci n'est pas une signature.
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.
I went to a state college (twice!) and the graduation rate was bellow 33%
That's a scam... flat out scam. You have to go, they know you have to go, and they abuse you to squeeze as much money out of you as possible.
Yes, there are those that just drink themselves out. But the colleges offer absolutely no help with anything at all.
You're paying a fortune for classes, and the schedules make little to no sense at all. I'd go to a 30min English class, then have to wait an hour and half to take a 4 or philosophy class, then wait 2hrs for my 1 hour programming class. There were thousands of students studying for the same degree I was! What's the point of having these nonsense schedules?? Can't I just get into the 8am-5pm compsci course and be done with it?
On top of that, what's with the books scams? I'm required to buy a book my professor wrote but we never open it in class? Really? I was so broke I'd literally go without eating some days, but my professors ripping me off for $89.95?
Then the campus police... Constant unending harassment. Granted, I was a long hair... but, for example, they decided to raid the door rooms over xmas break and leave me a ticket for underage drinking for having an empty wine bottle in my room. It took me 2 months and 2 visits to court to get it cleared up that I was 23 I had enough going on, I didn't need to be dealing with them.
I will be steering my son towards one of the well established local community colleges we have around here when the time comes. They seem to be the best value, and the least likely to rip you off. I'd stay away from any "online" schools, TV offers and State colleges. They are the worst. The only difference between those and the state collges is the State ones only rip off maybe 80 to 90% of their students as apposed to 100% for the university of Phoenix and the like.
This is a decent idea, but it doesn't go far enough - every non-profit college and university shuld be held to the same standards if they get tax subsidies or federal loan money.
It's popular to bash the for-profit schools, but there are plenty of over-priced, in-effective 2 and 4 year schools that saddle their graduates with mediocre educations and excessive debt loads.
Ken
Your confusing the purpose of federal student loans with the purpose of a university. Lenders are suppose to give loans with a good faith expectation that the loan will be repaid. If schools are lending money out that can't be repaid by students then they should be cut off from federal support. Students can still attend those schools. They just will have to do it with their own money.
Make the school jointly liable for their students' loans. So, if the student defaults, the college is on the hook. R
cite.
you're saying the arts have no value? Thats complete and utter bullshit.
as is the notion that an arts degree will not yeild a return.
further, the purpose of education is to be educated, not to get a job.
an educated populace is good for the nation. but people who only learn in order to work are little more than drones, which may be good for a business that wants wage slaves, but not so good for a free society with a government by, of, and for the people.
The guy who said the election was rigged won the presidency with the second-most votes.
Businesses will need millions of newly-trained, skilled laborers every year; they can't have them if nobody is able to afford college on their own. This causes businesses to hire them from other businesses, and then lose them to other businesses, as salaries run through the roof: $250,000 Web designers, accountants, and programmers.
No, the actual result would be any company which has the option to flee this country would leave within a generation. And businesses which can't move will see their customer base erode as the multinational companies have all moved overseas. And not just move their profits overseas, their employees would be overseas as well. No one is going to pay US-based web designers, accountants, and programmers $250k per year when they have other options in countries that find value in training their workforce. We already face problems with off-shoring when the above professions only make around $80k.
In the above scenario, a business would gain an enormous competitive advantage by hiring entrants, engaging them in on-the-job training, and educating them via funding their college and trade school.
No, they would go out of business while their competition found a crop of well trained entry level employees in Germany, Japan, China, Sweden, Korea, etc.
Every country on this planet is currently in a Jobs War with each other. The countries which provide the best educated workforce and best living conditions are going to win that war.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke