The U.S. Department of Education has released the final version of its “gainful employment” rule, which evaluates whether colleges are burdening their students with too much debt. The new rule will no longer look at the percentage of borrowers from each college who default on their loans; it will only examine graduates’ debt-to-income ratios. In order to pass, this ratio must be less than 8 percent; any higher and the school is at risk of no longer receiving federal funding for student aid.
Advocacy groups for student borrowers are unhappy with the change, arguing the gainful employment rule has always been too lenient and now is even more lacking. The amount of students who default on their loans is important data, especially since that number is increasing. Colleges need to be held responsible for weighing their students down with more debt than they can handle.
Advocacy groups have also argued students who drop out should somehow be considered in this equation. Under the current and new rules, a college could strap many of its students with an unreasonable amount of debt, but still pass the gainful employment test if the few students who graduate only have minimal amounts of debt. These scenarios are especially important to consider since low-income students are less likely to graduate than their wealthier peers.
The gainful employment rule should also take into account how many students colleges enroll from each income bracket, to prevent colleges from passing the test only because they enroll mostly wealthy students who are more capable of paying back their loans.
Community colleges are satisfied with the new rule, because they think strict gainful employment standards are an unfair assessment of their programs’ success or failure, since not many community college students take out loans. It is true that a small sample size may not yield accurate results about a college program’s success. But it is possible for the gainful employment rule can take into account the number of students who do not have to borrow as a measure of success, as long as it also keeps track of the number of low-income students enrolled.
In order to conduct a meaningful assessment, many different data measures must go into a college’s gainful employment score. This is not just a question of which colleges do the best job limiting student debt, but which colleges do the best job acting as rungs on the social mobility ladder. In a country which is supposed to be founded on the basis of equal opportunity, the federal government must assess whether its institutions of higher education are facilitating that goal.
For-profit colleges, which will be impacted most by the gainful employment rule, have argued the Department of Education is arbitrarily changing regulations to favor some types of institutions over others. But the gainful employment rule is not meant to target colleges; it is meant to protect students. The federal government must not be afraid of adding more teeth to gainful employment, because stricter standards will ensure students have the best opportunities for success.
Read More
EDITORIAL: Celebrating and reflecting on The Cavalier Daily’s independence
By Editorial Board | 6 days agoOur independence grants us the ability to ask the hard questions and to say what University representatives cannot.
ARRAS: U.Va. must revise the Sexual Assault Prevention Training module
By Aoife Arras | April 17, 2024In addition to its failures in interactivity, the module lacks details specific to the University and discusses key concepts in universal terms.
EDITORIAL: Pedestrian safety is an institutional imperative
By Editorial Board | April 15, 2024Amid a national crisis of pedestrian safety, Charlottesville and the University are also struggling to properly maintain pedestrian safety.
