Ed Dept chides career training programs for debt:earnings ratio

Dive Brief:

  • The U.S. Department of Education this week released its annual debt-to-earning rates for career training programs offered at colleges and universities and identified more than 800 programs currently falling below federal standards of success.
  • The release reveals 98% of programs falling below the federal earning benchmarks of student debt holders repaying less than 30% of discretionary income, or more than 12% of total earnings, are offered by for-profit institutions.
  • Lawmakers specifically cited for-profit schools as a culprit in setting back American workers' chances for economic prosperity. “Too many for-profit colleges have misled students, leaving them unable to find jobs that earn enough to pay off their crushing debt,” said U.S. Senator Sherrod Brown (D-OH). “The Department of Education’s gainful employment rule is critical in holding for-profit schools accountable and we must continue fighting to make sure students come before profits.”

Dive Insight:

As for-profits continue to draw the ire of federal policymakers in higher education, little-to-no analysis has been provided on how the department continued to provide student aid to individuals enrolling in these schools, and continues to seek repayment from students even whom they have said may be eligible for loan debt forgiveness from predatory institutions.

But more than these inconsistencies is the precedent which could be set for nonprofit schools by standards set to disrupt for-profit influence. What happens to community colleges and institutions with minority-serving missions if a new administration dictates they are predatory by way of bad outcomes in graduation rates and postgraduate earnings? College leaders must watch these trends and make tough decisions about how to adjust enrollment management and academic offerings to avoid similar announcement from future leaders in the agency.

Filed Under: Higher Ed Policy & Regulation