'Regulatory reset' on for-profit colleges now in effect
- Following a roll-back of Obama-era regulations — the gainful employment rule and borrower defense to repayment rule — intended to protect student borrowers from less-than-legitimate or predatory for-profit institutions, the Department of Education asked stakeholders at public hearings this week in both D.C. and Dallas to restart the "negotiated rulemaking" process in a regulatory reset, reports NPR.
- Both critics and supporters of Department's recent move attended the hearing. Some, such as Barmak Nassirian of the American Association of State Colleges and Universities, who was also one of the principal negotiators of the gainful employment rule, said to NPR that the reset will hurt students and "cost us, the American people, $1.3 billion over 10 years."
- Others, including David Baime from the American Association of Community Colleges, claimed that a reset was necessary because the cost of compliance with the rules was becoming a great burden for two-year institutions. Still, stakeholders expressed a general "weariness" at the reopening of a negotiation process that took several years to close out with the Obama-era regulations.
The two regulations on for-profit institutions that came out of the Obama administration were developed with students in mind, but as a result of this intended protection, many of these institutions believe they are being saddled with a costly financial burden and unfairly policed for being considered predatory, even if they actually are trying to provide a legitimate, specialized service for students. The borrower-defense-to-repayment regulation is a rule that provided financial relief to students who had been misled by their institutions, and the gainful employment regulation is the rule which holds for-profits accountable for ensuring their graduates actually find work. The Department of Education, observing these concerns and stating in a press release that the rules had become "overly burdensome and confusing for institutions of higher education," decided to address the issue.
While stakeholders in the industry are well aware of both the advantages and the setbacks of such regulations, their reactions to the Department's request of a "regulatory reset" and complete do-over for the negotiated rulemaking process, highlights just how long and difficult the process of coming to a conclusion will be. It also adds to a recent swing of negative reactions around the Department's decision overall — 18 states and the District of Columbia decided to sue Education Secretary Betsy DeVos just a week after she announced plans on rolling back the regulations, reports Vice.
Attorneys general in these states argue that renegotiating process could result in a "wholesale reevaluation" for these institutions, which may leave them less accountable for how students fare. But as the reopening of the rulemaking process has already gone into effect, administrators and leaders, as well as stakeholders in the industry, ought to take steps to voice their concerns over how the rules are being made, in order to make sure that there financial and moral considerations are being addressed equally.
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