- The Department of Education is stepping back from two Obama era policies intended to make for-profit colleges more accountable for how they treat students. For one, it is completely withdrawing from the borrower-defense-to-repayment regulation, which provided relief to students who feel they were misled or defrauded by their institution. And, it is rolling back the gainful employment regulation, which holds institutions responsible for whether graduates find work, reports the Chronicle of Higher Education.
- U.S. Secretary of Education Betsy DeVos is establishing a rulemaking committee to rework the gainful-employment rule, because "it became clear that, as written, it is overly burdensome and confusing for institutions of higher education," according to the Department's press release yesterday. The document makes it clear, however, that the 16,000 borrower defense claims already in the system will be processed.
- Administrators will have to consider how the changes to loan forgiveness programs may affect student enrollment, but a rolling back of the regulations will offer greater flexibility to institutions, without feeling as though they are being constantly watched.
The gainful employment regulation was passed in 2010 to restrict mostly for-profit institutions from receiving financial aid if they didn't meet minimum thresholds for graduation rates, a policy which was intended to weed out programs that unfairly saddled students with debt and did little to actually help them get a job to pay back their loans, according to US News. But many across higher ed were concerned about how the policies would eventually impact the rest of the sector, particularly institutions which serve a high number of students from minority or low-income backgrounds.
But at the same time, for-profit institutions, particularly those that are actually dedicated to filling a gap in school choice options or providing students with specific skills, have felt limited by the rules and unfairly targeted more so than other schools for poor graduation rates. These institutions can expect to see some more leniency coming their way. The press release from the Department of Education indicates that while the rules will be improved to "protect individual borrowers from fraud, ensure accountability across institutions of higher education, and protect taxpayers," they will also account for complaints from postsecondary institutions that are concerned about "the excessively broad definitions of substantial misrepresentation and breach of contract, the lack of meaningful due process protections for institutions and 'financial triggers.'"