March 18, 2014 by Clarise McCants
The U.S. Department of Education released its proposed regulation last week to take federal aid dollars away from predatory career education programs (like this one) that leave students with tons of debt and a worthless degree (or no degree). Many of the programs that will be impacted by this rule are housed at for-profit companies.
In 2010-11, for-profit colleges collected $32 billion from the federal government, and on average, 70 percent of their revenue comes from federal student aid sources. Too many students go to schools like these in hopes of getting the training needed for their dream jobs, but instead leave, feeling cheated and used for their financial aid dollars. We’ve stressed before the importance of a strong rule to protect students. But while still helpful, the proposal falls short of what students really need, and it doesn’t ensure taxpayer dollars aren’t wasted on these dangerous programs.
Let’s start with the positive: By releasing this proposed rule, the department has stayed committed to bringing some form of accountability to these programs that have gotten away with taking advantage of students for years. The rule provides greater transparency, allowing students to be notified a year in advance of when an institution fails to meet its requirements and will stop receiving federal financial aid. It also requires that the institution ensure that its programs meet basic accreditation requirements for state or federal licensure, so that students won’t graduate unable to enter the career they studied for. However, there are some key areas where the rule backs away from the things students and advocates have determined necessary for it to have any real impact.
Even though students who are stuck in predatory schools will be informed if their school loses eligibility under this rule, they wouldn’t get relief from the student loan debt they’ve racked up while attending. And, likely, they would need to leave that school (whose credits might not transfer) and start all over again someplace else. Students shouldn’t have to pay back student loans from an institution deemed by the federal government to be poorly run.
Moreover, the regulation doesn’t protect the schools that are providing a high-quality education at a low cost (i.e. community colleges). The proposal also let schools, where students leave with no degree, off the hook. As currently written, the rule would allow colleges to operate even if 99 percent of its students dropped out.
In the coming weeks, as the department begins its 60-day comment period, we (along with other advocacy organizations) will raise the student voice to push for a stronger regulation. We need this rule to protect students from dangerous career education programs and to provide relief to those who have fallen prey. Stay tuned.