Gainful Employment Rule Closes the Door on Private Higher Education [Department of the Uneducated]

Alliance for Worker Freedom ^ | 2011-06-02 | Christopher Prandoni

[92nina]

The Office of Management and Budget (OMB) today published the now infamous “gainful employment” rule, written by the Department of Education. This new rule, which emerged amidst a cloud of scandal and controversy, places incredible and unfair burdens on the nation’s bustling for-profit higher education sector.

It requires that for-profit schools meet at least one of three criteria for their students to qualify for federal aid: at least 35% of graduates must actively be paying down their loans; graduates must spend less than 30% of their discretionary income on paying off loans; finally, graduates must spend 12% or less of their total income on loan payments. Fail to pass one of these tests three times in four years, and the school must close its doors for good.

Enrollment in for-profit education institutions has skyrocketed nearly 418% since 2000, and for good reason. Tuition averages about $10,000 per year less than private not-for-profit schools. These innovative schools consistently lead the way in online education and cater to the needs of local employment markets in ways that traditional schools do not. Notably, and most importantly, these institutions serve a distinct demographic. Minority students constitute 45% of for-profit colleges’ total enrollment compared to 33% and 27% for public and private non-profit colleges, respectively.

Eliminating choice and competition is hardly an effective way to ensure opportunity for so many that are traditionally shutout of higher education. Colleges enrolling mostly minority students are more likely to demonstrate loan re-payment rates in the new rule’s restricted zone, and would likely be forced to close their doors. Realizing the implications of the new gainful employment rule, 289 members of the House of Representatives, including 58 Democrats, voted in February to block funding for its enforcement. The Senate, however, rejected the plan...

[92nina]

Will the GOP support the Department of education, or try to abolish it again?

Take this article and others I found to the fight to the Libs on their own turf; put the Left on the defensive at at Digg and at Reddit and in Delicious and Stumbleupon

[KarlInOhio]

No for-profit schools for electronics technicians, but you can still go to a public or private non-profit school for your B.A. in Guatemalan art appreciation because McDonalds is still hiring.

[17th Miss Regt]

If a minority gets a skill through these schools and gets a good job, they may just leave the plantation. Since that must not be allowed, these schools must be shut down.

It is simply good policy to keep your slaves ignorant and dependent.

[GeronL]

Does Kaplan (Washington Post) somehow get an exemption??

[Our man in washington]

Personally, I’d get rid of the Federal loans altogether for all universities. If a school is a bad risk, nobody will loan people money to study there.

The schools that train people for real jobs at low tuition rates will prosper. People will still be able to get loans for that.

If your business model is to pay professors $200K a year to teach one class every two years in oppression studies, you might be out of luck, but I’m not going to lose sleep over that.

[BenKenobi]

Wanted to post, saw your post. Now I don’t have to post.

[airbreather]

As far as I can tell, the big problem with these for-profit schools is that their main source of income is government money... their financial aid offices encourage their students to take on a greater proportion of government (and private) debt than their traditional counterparts.

SO they get your tax dollars via some poor student, who’s left picking up the interest on their comparatively worthless degree, asssuming they get one at all. (these schools also have lower graduation rates)