Protecting Americans from Predatory and Poor-Performing Career Training Programs

Students at for-profit colleges represent only about 13 percent of the total higher education population, but about 31 percent of all student loans and nearly half of all loan defaults. Of the for-profit gainful employment programs analyzed by the Department of Education, the majority—72 percent—produced graduates who on average earned less than high school dropouts.

Debt Graphic

The Obama Administration announced new steps on Friday to address growing concerns about burdensome student loan debt.

In an effort to reduce the number of American families with enormous debt loads, and to encourage responsible actions by colleges and programs, the Obama Administration announced new steps on Friday to address growing concerns about burdensome student loan debt by requiring career training programs to do a better job of preparing students for gainful employment.

The regulation proposed by the Department will help to strengthen students’ options for higher education by giving all career training programs an opportunity to improve, while stopping the flow of federal funding to the lowest-performing programs where the debt of former students in comparison to their earnings or the rate at which they default on their student loans consistently fail to meet minimum standards. Institutions will also be required to make public disclosures regarding the performance and outcomes of their career training programs.  The disclosures include information on costs, earnings, debt, loan repayment rates, and completion rates.

While this proposal applies equally to public, private and for-profit programs, students at for-profit colleges have had particularly concerning outcomes.

After the proposal released last week publishes in the Federal Register, the public will have 60 days to comment on the draft regulations. The Department will take that feedback and finalize the rule in the following months.

Read more about the gainful employment announcement.

Cameron Brenchley is director of digital strategy at the U.S. Department of Education