The U.S. Department of Education on Friday reduced the amount of information career-training programs must disclose to students under an Obama-era rule the Trump administration plans to rewrite.
The rule, known as gainful employment, threatens to withhold student aid from vocational programs that have graduates who consistently end up with more debt than they can repay. It requires schools to let students know about costs, graduate earnings, job placement and graduation rates to help them make informed decisions. Schools are supposed to also let people know if a program is at risk of becoming ineligible to receive federal student aid, but guidance issued by the department gives institutions more leeway.
Under Friday’s action, schools are no longer required to disclose median earnings data or room and board charges. They can also use job placement data provided by more than one source, which critics say could confuse students. Schools appealing the agency’s review of their programs will also get a temporary reprieve from informing students about the review.
Education Secretary Betsy DeVos has criticized the employment regulation for being burdensome and announced plans to rewrite it in June. The department did not immediately respond to request for comment on the changes announced Friday.
“The gainful employment rule is designed for career education programs, and what more relevant information is there for these students than earnings and job placement rates?” said Debbie Cochrane, vice president at the Institute for College Access and Success, an education nonprofit. “Yet the department’s changes to the disclosure form allow colleges to hide graduates’ earnings, and obfuscate their job placement rates.”
A program is considered to lead to “gainful employment” if the annual loan payment of a typical graduate does not exceed 20 percent of their discretionary income or 8 percent of their total earnings. Exceeding those debt-to-earnings rates means possible expulsion from the federal student aid program. Eight-hundred of the 8,700 programs reviewed by education officials at the end of 2016 failed to meet the thresholds. Ninety-eight percent of those programs are offered by for-profit colleges, while the remaining 2 percent are at private nonprofit schools, such as Harvard University.
As the rule is written, the government is supposed to cut off federal student aid to any program that fails twice in a three-year period or teeters on the line for failure for four consecutive years. Failing programs are supposed to notify students they are at risk of losing access to federal loans and grants.
But since March, the department has given schools more time to appeal the review of their debt-to-earnings data, comply with disclosure requirements and create a list of students who have completed their programs as outlined in the rule. The delays led a coalition of 18 Democratic state attorneys general to sue DeVos and the department in October, with the aim of forcing the agency to implement the rule as written.