Organizations urge President Obama to issue Gainful Employment regulations

A group of 50 organizations, including the American Federation of Teachers,  has written a letter to president Obama and .S. Department of Education officials to "urge the administration to issue promptly a stronger, more effective" set of gainful employment regulations. The group includes higher-education associations, faculty unions, consumer advocates and veterans organizations.

In December a panel of department-appointed negotiators failed to reach consensus on the proposed rules, which would affect vocational programs at for-profit institutions and community colleges. The department is expected to issue its final draft standards in coming months. A period of public comment will follow their release.

The letter began:

Our organizations—which work on behalf of students and college access, veterans, consumers, and civil rights—were heartened by your (President Obama's) remarks last August when you so effectively summed up the problems in the for-profit college industry:

[T]here have been some schools that are notorious for getting students in, getting a bunch of grant money, having those students take out a lot of loans, making big profits, but having really low graduation rates. Students aren’t getting what they need to be prepared for a particular field. They get out of these for-profit schools loaded down with enormous debt. They can’t find a job. They default. The taxpayer ends up holding the bag. Their credit is ruined, and the for-profit institution is making out like a bandit.That’s a problem.

Your administration now has an opportunity to better protect taxpayers and students, including our nation’s veterans, service members and their families, from predatory career education programs. The Education Department is developing draft regulations to enforce the statutory requirement that all career education programs that receive federal funding, whether at for-profit, public or nonprofit colleges, “prepare students for gainful employment in a recognized occupation.” The negotiated rulemaking panel convened last year by the Department to develop the draft regulations was unable to reach consensus. Even after the Department made multiple changes requested by the for-profit college industry representatives that dramatically weakened the draft regulation, the for-profit college industry representatives objected to it. The changes would have made the regulation so weak on predatory colleges and so hard on low-cost, high-performing colleges that not a single negotiator voiced support for the Department’s last proposal.

We urge the Administration to issue promptly a stronger, more effective proposed regulation so that the urgently needed rules can be finalized by November 1, 2014, and go into effect by July 1, 2015.

The organizations wrote that a gainful employment regualtion must include:

1. A repayment rate or another metric to effectively prevent programs with high borrowing and high dropout rates from receiving federal funding;

2. A meaningful approval process to weed out programs that will not prepare students for gainful employment in the specified occupations before they harm students;

3. Borrower relief that is fair and provides a greater incentive to improve weak programs;

4. Meaningful debt-to-earnings standards;

5. Protection for schools offering low-cost programs in which most students do not borrow..

The entire letter is linked here.