More Programs Would Fail Under New 'Gainful Employment' Proposal
"A full 13 percent of programs subject to the Education Department's latest 'gainful employment' proposal would fail its two-part test, putting them at risk of losing access to federal student aid, according to an analysis released by the department late Wednesday," The Chronicle of Higher Education reports. "That's significantly higher than the 6 percent of programs that were expected to fail the department's 2011 rule or its original 2013 proposal. An additional 7 percent of programs would fall into the danger zone, three percentage points fewer than were projected to be in that category under the original 2013 proposal. Under the department's revised rule, also released on Wednesday, programs would be evaluated based on their graduates' debt-to-income and debt-to-discretionary-income ratios and their borrowers' cohort default rates. Programs that failed both debt-to-income tests in two out of three years or the cohort-default-rate benchmark in three consecutive years would become ineligible to award federal student aid, as would programs that failed to pass either debt-to-income measure for four years. Failing programs would also face enrollment caps, and both failing programs and those in the danger zone would have to warn students when they were at risk of losing eligibility at the end of the year."
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