For-Profit-Colleges to be tested by ‘Gainful-Employment’ Rule

For-Profit-Colleges to be tested by ‘Gainful-Employment’ Rule

6/11/2011

 

Federal education officials are strengthening their oversight powers on the thriving for-profit higher-education sector with its release of a new rule yesterday that will oblige career preparatory programs to produce “gainful employment.”

The action concludes the protracted debate between for-profit college leaders and the Obama administration. A number of concessions that were meant to soften the impact of the new regulation were granted by the government to the industry. One of the vital revisions to the draft is the introduction of a multiyear grace period prior to shutting down programs that are deemed deficient.

This rule is likely to be closely scrutinized by Congress, as well as be subjected to a legal challenge. Republican legislators and a couple of Democrats have indicated their support for the industry.

For-profit programs that continuously fail to show that graduates are earning enough compensation to pay the loans taken out to attend the programs would be shut down by the rule. Advocates say that the rule addresses the main complaint directed against these for-profit schools that students graduate from their programs saddled by too much debt and lesser career opportunities.

Education Secretary Arne Duncan, in a recent conference call with reporters, said, “The quality here has been very uneven. “There have been some absolute superstars. And there have been some players whose intentions, quite frankly, we doubt.”

 

WRITTEN BY:

blakeh@wellsdrew.com