The Trump administration has released a proposal to gut an Obama-era rule that punished colleges for career programs that caused students to amass too much debt.
The Obama administration put the rule, known as “gainful employment,” in place in 2014 as part of a crackdown on for-profit schools, on the basis that the government needed to protect students from expensive career programs that don’t make them more attractive to employers and that don’t result in decent salaries. Students had complained about chains such as ITT Tech and Corinthian Colleges, which they said defrauded them and left them with degrees that were worthless to their job prospects.
Department of Education Secretary Betsy DeVos said in a statement that the overhaul of the rule would “improve accountability.”
“Students deserve useful and relevant data when making important decisions about their education post-high school,” she said. “That’s why instead of targeting schools simply by their tax status, this administration is working to ensure students have transparent, meaningful information about all colleges and all programs.”
Previously, the rule capped the amount of debt that students have in relation to their income after leaving college, and applied mostly to for-profit schools. The rule required that students’ debt not exceed 8 percent their total earnings.
Programs that went past the limit for several years are punished by being shut out of federal funding and financial aid.
The Trump administration has proposed undoing the penalties, a move that is expected to add $5.3 billion in federal costs over the next decade. Instead, it will require schools to disclose information on their websites such as details about a program’s size, how many people complete it, how much it costs, whether it is accredited, and whether it is licensed by the state.
Shady #4profit colleges scam students out of their futures, & @BetsyDeVosED is their biggest accomplice. She just issued a new rule that would ensure for-profits face NO consequences for graduating students with huge debts & no job prospects. Another big favor for industry hacks. https://t.co/69Lnlrl4rm
— Elizabeth Warren (@SenWarren) August 10, 2018
The requirements would extend to all institutions, not just those with gainful employment programs. The Department of Education said the new approach would help students understand what earnings they should expect after pursuing the programs and said that it would be more difficult for institutions to misrepresent their programs.
Outside groups have 30 days to weigh in on the proposal, and the previous rule is slated to be eliminated July 1, 2019.
