The U.S. Department of Education released draft language on Friday for a proposed new “gainful employment” rule that in some ways would be stronger than an earlier version that was thrown out by a federal court in June 2012, but in others ways would be weaker.
The draft regulation, which will be subject to three days of formal negotiation beginning on September 9, could cover more than 11,000 programs at for-profit and nonprofit colleges—nearly twice as many as the old rule would have covered. That’s because the draft calls for including programs with as few as 10 students; the earlier rule counted only career-focused programs with 30 or more students. (See a comparison of the two versions prepared by the Education Department.)
The old rule also would have cut off federal student aid to programs where too few students were repaying their loans or where graduates’ debt-to-earnings ratios, based on two measures, were too high. In blocking the earlier rule, the court said that the thresholds for the student-loan-repayment criteria were “arbitrary and capricious” because the department had not shown a reasoned basis for them.
The new rule would omit the loan-repayment criteria altogether. <Read more.>