A compromise on ‘gainful employment’
Compromises tend to please nobody: Critics of for-profit higher education say the Education Department’s “gainful employment” rule, announced yesterday, is too weak, while the industry complains it unfairly cuts off access to student loans.
Under the new regulation (pdf), career training programs will have to show that at least 35 percent of former students are repaying their loans (reducing the loan balance by at least $1 a year) or that the typical graduate’s annual loan payment does not exceed 30 percent of discretionary income or that the typical grad’s payment does not exceed 12 percent of total earnings.
“We’re asking companies that get up to 90 percent of their profits from taxpayer dollars to be at least 35 percent effective,” Education Secretary Arne Duncan said.
Career colleges will get more time to comply: Those that miss the targets in the first year must report the data and write an improvement plan. After two years, they must warn students of high debt to
