Dept. of Education Removes Aid from Vocational Colleges

Obama Government Rule Cracks Down on For-Profit Colleges

After months of political wrangling, the U.S. Department of Education finalized on Thursday its highly contentious “gainful employment” rule, a crucial element of the Obama Administration’s crackdown on the rapidly growing for-profit career-college industry.

The rule will strip federal financial aid dollars from vocational programs that load students with more debt than they can realistically repay.


Under the gainful-employment rule, to qualify for federal financial aid, a program must meet one of three requirements: at least 35% of former students are repaying their loans; the estimated annual loan payment of a graduate does not exceed 30% of his or her discretionary income; or the estimated annual loan payment does not exceed 12% of his or her total earnings.


Senator Tom Harkin, chairman of the Senate’s Health, Education, Labor and Pensions Committee, who has been leading an extensive inquiry into the industry over the past year, voiced his support for the finalization, calling it an important step in protecting students and taxpayers against “subprime” academic programs.

“At a time when Congress is concerned about the growing deficit, we should not turn a blind eye to the waste, fraud and abuse of taxpayer dollars,” Harkin said in a statement.

Waste?? – we just spent two years redoing the food pyramid to a food plate. And where is the reform for traditional four year public universities?

Now are they separating vocational for-profit schools by definition or through the terms of the regulation? We continue to make regulation after regulation when we should be enforcing common sense rules to those who do not repay their loans.

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