In a move certain to create additional controversy, the Education Dept. released its ‘gainful employment’ final regulations that establish measures for determining whether certain for-profit colleges and universities prepare students for well-paying jobs in recognized occupations. Effective: July 1
Additionally, the regulations set the conditions under which the for-profit educational programs remain eligible to participate in federal student aid programs.
The gainful employment regulations are the White House’s preferred method to curtail burdensome student loan debt, targeting institutions offering curriculums not leading to gainful employment, mainly at for-profit institutions.
Republicans, especially the House leadership, have been especially active in attempts to end the gainful employment regulations, including sending a letter to ED Secretary Arne Duncan to curtail the practice and holding hearings to tout alternatives.
“Instead of helping us address problems in postsecondary education through the reauthorization of the Higher Education Act, the Obama administration continues to push for shortsighted mandates and federal price controls that will limit innovation and levy new regulatory burdens on colleges and universities,” House Education and the Workforce Committee Chairman John Kline (R-MN) said at a recent hearing.
Agency already curtailing sub-par for-profit activities
The Education Dept. is already cracking down on for-profit higher education institutions with inferior track records in helping their graduates secure quality jobs, a cornerstone of the proposed regulations.
Corinthian Colleges Inc. is the recent for-profit institution to attract attention from ED. The agency and for-profit company have agreed to an operating plan to either sell or close all Corinthian campuses across the country in the next six months, including Everest, Heald and Wyotech campuses. Corinthian enrolls 72,000 students nationwide, who receive $1.4 billion in federal financial aid annually to support their educations and prepare them for careers.
“We have accepted an operating plan for Corinthian Colleges Inc. that will protect students’ futures and fulfill ED’s responsibilities to taxpayers moving forward,” says ED Undersecretary Ted Mitchell. “Ensuring that Corinthian students are served well remains our first and most important priority, and we will continue to work with Corinthian officials and the independent monitor on behalf of the best interests of students and taxpayers.”
The plan comes after ED’s Federal Student Aid office placed Corinthian on an increased level of financial oversight on June 12. At that time, the company had failed to provide records concerning enrollment and job placement data required by federal law and to fully address concerns about its practices, including faulty job placement data used in marketing claims to prospective students and allegations of altered grades and attendance.
To ensure Corinthian can still provide classes for its current students, ED has agreed to release $35 million in student aid to be used solely for education activities — all of which must be approved by ED.
Contact: John Kolotos, 202/502-7762; e-mail, firstname.lastname@example.org.