Gainful Employment Rules for Education Programs

Federal education officials issued final rules this week to ensure vocational programs lead to jobs. The effort caps four years of debate and legal challenges and was initially spurred by reports of high student loan default rates and poor job outcomes among students attending some for-profit postsecondary institutions. An estimated 1,400 programs--nearly all for-profits--are expected to fail to meet these standards, which puts them at risk of losing access to federal student loan funds, according to Arne Duncan, education secretary. The federal government provides $16 billion in loans and $6 billion in Pell Grants each year toward employment programs, according to a report in Inside Higher Ed. Students attending for-profit and community college workforce programs use these forms of funding. The for-profit industry is expected to challenge these rules too. According to a fact sheet, programs must certify that their vocational programs' graduates are paying below a certain threshold of their post-graduation/credentialing annual earnings toward loans. They have up to 3-4 years to improve the outcomes to avoid ineligibility. The new rules are scheduled to go into effect July 1, 2015.