The Education Department will release on Thursday the final version of its “gainful employment” rule—the subject of years of intense debate,revision, and litigation. When it does so, it will add one last twist to the rule’s winding plot: One of two metrics for judging career programs has disappeared altogether.
Under the revised rule, programs will no longer be held accountable for their cohort default rates, which describe the percentage of borrowers who are defaulting on their student loans. Instead, the programs will be evaluated based solely on their graduates’ debt-to-earnings ratios.
The change is a win for community colleges, which had urged the department to scrap the default-rate metric. But student and consumer advocates say the change weakens the rule, allowing programs to saddle some students with unmanageable debt. And for-profit colleges say it does nothing to fix a proposal they say is “fundamentally flawed.”
The elimination of the default measure is expected to spare 500 programs, most of them at for-profit institutions, that would have failed the two-part test laid out in a draft rule issued in March. <Read more.>