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THURSDAY BUZZ: Education Department Releases Final Gainful Employment Rule

October 30, 2014

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​The Department of Education today released the final rule on gainful employment, an effort to ensure that individuals who enroll in career training programs will earn enough money to repay their student loans. The full version will be published in tomorrow’s Federal Register.

The rule, which will take effect in July 2015, will not use a student loan default rate, which was one of two standards for evaluating colleges when draft regulations were released in March.

The remaining criteria, unchanged from the draft rules, hinges on graduates’ debt-to-earnings ratios.

ACE Senior Vice President Terry Hartle told The Washington Post that he suspects the administration jettisoned the student loan default rate to make the rule “legally bulletproof” because a previous attempt at gainful employment regulations was killed by the courts in 2012.

“The rule is more streamlined, less strict, and the controversy surrounding it will continue,” he said.

Gainful employment applies to vocational programs, including most for-profit institutions. Non-degree programs at community colleges must also comply with the rules, along with some non-degree programs at four-year nonprofit institutions, both public and private.

ACE and 17 higher education groups submitted comments on the proposed rule in May.

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