US education department drafts new gainful-employment rules

September 3, 2013

The US Department of Education has drafted new proposed “gainful-employment” rules that would affect for-profit and community colleges, after a similar 2012 rule was dismissed by a federal court. The rules would set minimum gainful-employment rules for vocational programs to be eligible for federal financial aid. Sector observers say this updated set of rules set higher standards and allow fewer opportunities for failure than the 2012 version that was thrown out because one of the 3 funding thresholds was allegedly set arbitrarily. The new rules also include the caveat that programs would not immediately lose aid eligibility if they fall below thresholds (a failing program would be one with an annual debt-to-income ratio of more than 12% and a debt-to-discretionary-income ratio of more than 30%). The rules will be negotiated by a rule-making committee on September 9. Chronicle of Higher Education | Inside Higher Ed