No Viable Job, No Education, A New Regulation Threatens

Certain for-profit colleges and universities have come under state and federal scrutiny in response to student complaints, and a series of tighter regulations that affect all of these institutions are expected to go into effect in July of next year. The U.S. Department of Education proposed many of these tighter regulations to protect students from what some have described as misleading recruitment practices and to protect students from unwittingly taking on mountains of debt. Other regulations will require for-profit schools to level with prospective students about the school’s graduation rates and job placement rates, as well as how much student loan debt and future income they can expect after graduation.

Many of the new regulations have spurred significant debate. However, supporters of for-profit institutions are speaking out fervently against one particular provision of those regulations, according to the New York Times. The regulation that has come under criticism has been dubbed the "gainful employment" proposal. This proposal would reportedly require any new program that seeks federal aid to demonstrate that its training actually prepares students for viable, in-demand jobs.

For-profit universities have spoken out against this, claiming such a provision limits a student’s ability to choose a school or academic program best suited to their needs. Instead, the provision in effect lets the government decide what programs lead to a viable job by withholding financial aid to programs that don’t fit the bill, critics said. Other critics put forth that neither the government nor employers had any business controlling what programs schools may offer and that doing so would curb program innovation and growth. Students have complained that loans would dry up for them if they chose a program that did not meet the federal government’s definition of a path of study that leads to a viable job.

These regulations could hurt for-profit schools because certain provisions would stake a school’s eligibility for federal aid on students’ loan repayment history and the ability of graduates to land a job, according to the Jackson Clarion-Ledger. These are both factors that schools have little control over, critics of the regulations say. One opponent of such regulations said in the article that the government appeared to be assuming that just because a graduate has a high debt-to-income ratio, there must be a problem with the academic program and that no facts to support such a belief.

Because the "gainful employment" regulation has drawn so much criticism, the USDE recently announced it would put off issuing final guidelines pertaining to this particular regulation until early 2011, according to the Clarion-Ledger. This will give the USDE time to further examine complaints about the regulation and adapt it if necessary.

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