Tuesday, May 11, 2010

Understanding the Gainful Employment Proposal

You may have heard that the U.S. Department of Education is considering strengthening its rule on “gainful employment,” a requirement that has been in place for some time. According to Insider Higher Ed, the requirement states, in part, that vocational or career programs must "prepare students for gainful employment in a recognized occupation" to be eligible for federal grants and loans. Arne Duncan, Secretary of the Department of Education, wrote that the current gainful employment rule has come under scrutiny as more students are attending more colleges, universities, and career schools with more federal student aid dollars—$115 billion in federal student aid last year. The purpose of changing the requirements for gainful employment, according to Duncan, would be “to ensure that taxpayer funds are used appropriately, and that consumers receive a quality education and training worthy of this unprecedented federal investment.”

The changes in the definition and rule of gainful employment would:
  • Affect non-degree programs less than 2 years in length
  • Cause institutions to meet additional requirements to remain eligible for Title IV federal student aid
  • Use the ratio of student loan debt to income as an indicator of gainful employment

According to the National Association of Student Financial Aid Administrators (NASFAA), the question in consideration is, “Are graduates with typical student debt able to repay their loans in ten years without taking more than 8 percent of the expected earnings in the occupation?”

The idea of setting stricter requirements for the gainful employment rule is supported by students who feel they were “enticed into programs that did not deliver,” coming out of school with large debts and insufficient training to enter the intended career. However, there are many students who feel that their vocational or career program gave them excellent training and preparation for their career; “they were well served by the institutions they attended and the federal aid they received. The programs delivered what they expected—and the training helped them to prepare for a better job.”

Duncan has opened the door to discussion from the public to gather ideas for the gainful employment proposal. Faculty, students, and public who want to make suggestions are encouraged to take part in the rule-making.

Emily Howard, TestOut

1 comment:

  1. I taught at an evening business school in the San Fernando Vally some time back. Part of our definition for placement was ability to repay
    timely the student loans ($3500 for 15 weeks of 16-hour weeks). At one point our placement officer reported 95% placement within two weeks of non-smoking students in graduating classes since he took over. Our placement rate of smoking students was quite low and we said so up front. Fortunately the vast majority of students were willing to take positions in companies and corporations that did not allow smoking on site. Our students were predominantly Hispanic graduates of local high schools, which did not require basic written literacy in English and would not allow the Hispanic students to take Spanish grammar and composition, thereby condemning many to bilingual illiteracy--despite the spoken fluency in both English and Spanish.