Federal Rule Would Cut Funding to Some Career-Training Programs
- Duration: 4:55
- Updated: 31 Oct 2014
Career-training programs with more than 800,000 students face a threat to their survival under a new federal rule measuring whether graduates earn enough to pay off , the latest move by the Obama administration against . The government would cut off funding to programs that consistently fall short under the “gainful employment” rule, to be published Thursday — effectively a death sentence for the programs, because a majority of their revenue comes from federal student loans and Pell grants. The rule is to go into effect in mid-2015, and if it survives expected legal challenges, it could begin to strip programs of funding in late 2017 or early 2018. The Obama administration has tried before to impose a similar rule, but it was struck down by a federal judge in 2012. The administration proposed a new standard last year, designed in part to avoid the same legal obstacle. Officials said that proposed standard would have hit far more schools than the original one, but the final rule being unveiled is somewhat watered down. Of about 5,500 career-training programs covered by the rule, some award college degrees, but most award certificates. Most of the affected schools have multiple programs, so a single program could be forced to shut down while others at the same school continued to operate. Administration officials said about 200 programs would have failed under the original rule, 1,900 under the rule as it stood last spring, and 1,400 in its final form — though that number could decline if schools improve their performance in the next few years. “While some are strong, today too many of these programs fail to provide students with the training they need,” Arne Duncan, the education secretary, said in a conference call with reporters. “Our primary goal in this effort is to make sure that all programs funded by taxpayers provide quality training to all students. ”The rule applies to some nonprofits, but is clearly aimed at for-profit schools and colleges, which administration officials say would account for 99 percent of failing programs. They frequently note that as a whole, for-profit schools have low graduation rates and charge more than nonprofit schools. Their students tend to borrow more money, and former students are far more likely to default on their loans. For-profit schools also disproportionately serve low-income and minority students. The industry contends that it fills an important need for people who are underserved by traditional schools. Consumer advocacy groups say the schools simply prey on unsophisticated consumers. “The regulation will hurt the very students it is intended to help by restricting educational access for millions of students and unfairly targeting certain institutions,” said Steve Gunderson, president and chief executive of the Association of Private Sector Colleges and Universities. He vowed to “vigorously contest” the rule. A training program would comply with the new rule if its graduates’ annual loan p
http://wn.com/Federal_Rule_Would_Cut_Funding_to_Some_Career-Training_Programs
Career-training programs with more than 800,000 students face a threat to their survival under a new federal rule measuring whether graduates earn enough to pay off , the latest move by the Obama administration against . The government would cut off funding to programs that consistently fall short under the “gainful employment” rule, to be published Thursday — effectively a death sentence for the programs, because a majority of their revenue comes from federal student loans and Pell grants. The rule is to go into effect in mid-2015, and if it survives expected legal challenges, it could begin to strip programs of funding in late 2017 or early 2018. The Obama administration has tried before to impose a similar rule, but it was struck down by a federal judge in 2012. The administration proposed a new standard last year, designed in part to avoid the same legal obstacle. Officials said that proposed standard would have hit far more schools than the original one, but the final rule being unveiled is somewhat watered down. Of about 5,500 career-training programs covered by the rule, some award college degrees, but most award certificates. Most of the affected schools have multiple programs, so a single program could be forced to shut down while others at the same school continued to operate. Administration officials said about 200 programs would have failed under the original rule, 1,900 under the rule as it stood last spring, and 1,400 in its final form — though that number could decline if schools improve their performance in the next few years. “While some are strong, today too many of these programs fail to provide students with the training they need,” Arne Duncan, the education secretary, said in a conference call with reporters. “Our primary goal in this effort is to make sure that all programs funded by taxpayers provide quality training to all students. ”The rule applies to some nonprofits, but is clearly aimed at for-profit schools and colleges, which administration officials say would account for 99 percent of failing programs. They frequently note that as a whole, for-profit schools have low graduation rates and charge more than nonprofit schools. Their students tend to borrow more money, and former students are far more likely to default on their loans. For-profit schools also disproportionately serve low-income and minority students. The industry contends that it fills an important need for people who are underserved by traditional schools. Consumer advocacy groups say the schools simply prey on unsophisticated consumers. “The regulation will hurt the very students it is intended to help by restricting educational access for millions of students and unfairly targeting certain institutions,” said Steve Gunderson, president and chief executive of the Association of Private Sector Colleges and Universities. He vowed to “vigorously contest” the rule. A training program would comply with the new rule if its graduates’ annual loan p
- published: 31 Oct 2014
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