Posted on 06/01/2014 2:32:22 PM PDT by Libloather
It's decision time for the Obama administration on a major rule designed to crack down on colleges that saddle students with a mountain of debt without preparing them for the job market.
The Education Department is under intense pressure as the agency prepares to finalize its highly anticipated "gainful employment" regulations, aimed squarely at for-profit college programs seen as predatory.
Go too far, business groups warn, and the Obama administration risks denying millions of students a higher education.
Yet the agency’s draft rule, issued in March, has come under fierce criticism by some congressional Democrats and advocates, including former Homeland Security Secretary Janet Napolitano, who say it is too weak.
“In its current form, the proposed rule is meaningless, sets the compliance bar far too low, and will not stem the flow of federal dollars to poorly-performing institutions, even in the most egregious circumstances,” Napolitano, now the president of the University of California system, said Tuesday in a letter to the Education Department.
The missive was part of a deluge of responses to the proposal received by the agency ahead of the close of a formal public comment period. Officials must now sort through the submission as the agency crafts final language.
Regulators have no specific timetable for issuing the rule, according to Education Department spokeswoman Jane Glickman, who said only that it was expected sometime in 2014.
The agency’s balancing act is complicated by federal judge’s decision in 2011 to toss out the agency’s initial attempt at the regulation.
This time around, opponents — including the for-profit college industry and the U.S. Chamber of Commerce — are launching a pre-emptive strike.
The Chamber, in comments submitted to the agency, described the March proposal as overzealous.
“The proposed one-size-fits-all system of higher education where winners and losers are picked by regulatory fiat would not allow for the diversity of educational programs needed to narrow (an) ever-increasing skills gap,” the Chamber argues. “Graduates from ‘traditional’ institutions alone cannot meet employer demand for an educated workforce, which prohibits growth and competitiveness for businesses of all sectors and sizes.”
The regulations, due to take effect by late 2016, would impose a new set of metrics that colleges must meet to be eligible to participate in federal loan and grant programs.
First, the estimated annual loan payments for graduates must not exceed 20 percent of their discretionary earnings. Second, the default rate on loans taken out by former students must not exceed 30 percent.
Institutions would be required to certify that all gainful employment programs are accredited and have the proper state and federal licenses. And they would be subject to new public disclosures to better inform students about the costs of the programs.
Critics say the new rules are unlawful, unfairly target private programs and would ultimately backfire.
The Association of Private Sector Colleges and Universities (APSCU) points to a new study showing the regulations would have an adverse impact on millions of students.
The APSCU-commissioned study, conducted by Northwestern University Economics Professor Jonathan Guryan, estimates that between 2 and 7.5 million students would be denied access to postsecondary education by 2020 under the proposal.
Guryan argues that the Education Department has overestimated the number of students that would be able to enroll in alternative programs.
“Our analysis shows that much fewer reasonable alternatives actually exist for students and that the Department’s assumptions are overly optimistic …,” according to the study.
The concerns were echoed in a letter signed last week by nearly three dozen House members from both sides of the aisle, seeking language in appropriations legislation expressly prohibiting the Education Department from enacting the law.
But other federal lawmakers are urging the administration to go bold on the rule.
Sens. Richard Durbin (D-Ill.), Tom Harkin (D-Iowa) and others have called out schools like the University of Phoenix and Corinthian Colleges, noting while only one in 10 students attend for-profit colleges, they account for almost half the country’s student loan defaults.
“They won’t deny it; they can’t deny it,” Sen. Dick Durbin (D-Ill.) said this month. “When it comes to the facts of the matter, this sector of higher education is disgraceful and scandalous.”
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For starters, state universities should not divert income from tuition payments into their general fund. Such monies should go into the operating expenses of the universities. As greed for that tuition money goes up, the students are saddled with increasing debt that outweighs any income advantage that their degree gives them.
Good to know that the not for profit schools are not loading up students with debt and find all of them jobs when they graduate.
Sorry, I left reality there for a minute. Back now.
They're making money, too.
That pretty much describes every social science college in the United States. Does anyone think they will question the $160,000 in tuition/room/board that public universities get in exchange for handing out degrees in feminist studies and other nonsense?
Most of the leftists I know hate Kaplan University and University of Phoenix and any other place that is not a haven for leftist thought. Sounds like Hussein is paying back his base.
If the estimated annual loan payment is not to exceed 20 percent of students' 'discretionary' earnings, does this mean that there will be stricter qualification for loan amounts? What is discretionary? What if a student decides to marry and become a homemaker and has no personal income? What about students who become professional students? Will universities become collection agencies for the federal government? How does this replace personal responsibility for not researching a career path and/or taking a loan in the first place? And lastly, how much did Obama pay for his education and can he get a refund?
It wouldn't be a problem if the gov would get out of the student loan business. Then, if these colleges gave the students a payment plan they'd be more accountable for turning out employable students.....if they wanted their money back.
Instead, Obama wants the feds to choose the winners and losers in the college game. And what about state colleges and universities who take a percentage of students (and their loan money) knowing full well they aren't qualified for college?
The problem is that too many students go to college. The enabler is the federal gov.
Better to have the colleges in deep debt so government can bail them out whereby they tell what those colleges can or cannot teach. And how to.
“It’s decision time for the Obama administration on a major rule designed to crack down on colleges that saddle students with a mountain of debt without preparing them for the job market.”
So the adults that sign up for these loans voluntarily, and take these classes voluntarily is totally lost on these idiots?
I think student loans should be regulated more heavily, in the sense of making them comply with NORMAL rules for loans - collateral, expectation of payment, default rates, bankruptcy, etc. Many of the places giving loans would shut down ASAP if they had to show WHY they expected someone with C grades in high school to pass an RN program, or why they think loaning someone $100K for feminist studies was a good idea.
And if former students could get rid of their debt using standard bankruptcy, then many loan agencies would again shut down.
Once the money spigot was turned off, all universities would have to become realistic about their cost structure.
“Most of the leftists I know hate Kaplan University and University of Phoenix and any other place that is not a haven for leftist thought. Sounds like Hussein is paying back his base.”
The online places have to be watched because some are simply diploma mills to drive up the earnings of public school teachers; under their work rules they get thousands upon thousands in pay increases for additional degrees (regardless of need or subject matter), and some schools and teachers have been caught in the scam. The teachers do no real course work, receive the degree and accompanying wage increases, and happily part with thousands of dollars (a fraction of their first year’s raise) for the “diploma”...
“So the adults that sign up for these loans voluntarily, and take these classes voluntarily is totally lost on these idiots?”
How many 18 year old adults are prepared to make decisions affecting their finances for the next 30 years? As a parent, I can refuse to loan them money or to co-sign a loan. But I cannot prevent an 18 or 19 year old from taking out a loan on their own, without telling me.
My son did that. In his case, he borrowed about $30K, did not pass, and then spent a year in Iraq to make the money to pay off his debt right away. It was a good life lesson, but not one I think should be encouraged by government policy.
Anything Obama proposes is wrong. However I did note this statement “Second, the default rate on loans taken out by former students must not exceed 30 percent.”
30%?? Why would anyone loan money at such a high rate and why would anyone accept such a ridiculous loan? Not sure why the feds have to police it but anyone dishing out 30% loans needs to have their ass kicked
“So the adults that sign up for these loans voluntarily, and take these classes voluntarily is totally lost on these idiots?”
I’m all for holding people accountable for their actions, but the amount of misinformation and outright lies swirling about make it nearly impossible to make a truly informed decision. Our government can’t be honest with people about how bleak the future is for many Americans because they would have a revolution; they maintain the illusion that higher education will provide everyone with a worthwhile job to obscure the reality while keeping the education industry employed. In fact, there just isn’t enough work left for many Americans, and that won’t be changing any time soon without massive decreases in taxation and regulation.
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