The Higher Education Act (HEA) requires career education programs at for-profit schools and community colleges to “prepare students for gainful employment in a recognized occupation” in order to participate in federal student aid programs. As a reminder, gainful employment regulations apply to allied or advanced dental education programs that terminate with the awarding of a certificate but not a degree. Last month, negotiators failed to reach consensus during the last of three rulemaking sessions.
Inside Higher Ed reports that representatives of both for-profit and public institutions took issue with the draft proposed regulations. The publication reported that representatives of for-profit programs praised the most recent revisions but criticized the rules overall. According to the article, groups representing for-profit and public institutions also disagreed on how the rules should handle borrowing for expenses other than tuition and fees, such as the cost of books and other academic supplies. Also at issue is whether low-cost programs at community colleges should be exempt from the regulations since few students incur any debt to attend low-cost programs.
New regulatory language released in November 2013 reintroduced a standard for loan repayment that would have measured the amount of all outstanding principal owed on federal student loans at the end of each year and penalized schools if their principal balances rose over time. This elicited complaints from the for-profit sector, and this more stringent formula was eventually dropped from the standards, provoking harsh criticism from consumer advocates.
Data prepared by the U.S. Department of Education estimated that under the most recent version of the proposed rules, 13% of the existing 11,735 programs would fail to meet the standards. Next steps, it will be up to the U.S. Department of Education to draft final regulations and submit those for public comment.