Feds will make college pay — or else

For now, proposed “gainful employment” regulations are aimed at for-profit colleges and career programs at nonprofits. If too many students in a program default on loans or pile up too much debt relative to income, the feds will cut off student aid. Once the bills start coming in for income-based repayment of student loans, “the government is just going to have to shut down the free money fountain” for all of higher ed, predicts EduBubble.

‘Gainful employment’ rules are ‘awful’

 New “gainful employment” rules for student loans are “awful,” ”unfair and discriminatory,” writes Richard Vedder, director of the Center for College Affordability and Productivity.  The regulations apply to vocational programs at career colleges (primarily for-profit) and community colleges. If the goal is to stop wasting government money,”why not scrutinize students majoring in, for example, sociology, from Wayne State University?” he asks.

I-BEST: Job training that works

If adults have to master basic skills before they start job training, most won’t make it. In Washington state, they can do both at the same time. Integrated Basic Education and Skills Training, known as I-BEST, is getting adult students into the workforce quickly.

The Obama administration has proposed new gainful employment regulations that try to ensure career programs don’t leave students jobless and in debt.

Rating colleges by grads’ pay isn’t easy

If colleges and universities are judged by former students’ earnings, community colleges will look bad, a dean writes. When community college students go on to a bachelor’s degree, the two-year school gets no credit for their success.

Negotiators are trying to reach consensus on “gainful employment” regulations. The federal rules will deny student aid to job training programs whose graduates don’t earn enough to pay back their loans.

From Hamburger U to a degree

At McDonald’s Hamburger University, Jiffy Lube University, the University of Farmer’s and other corporate training programs, employees can learn business skills and earn college credits that start them on the path to a degree.

Gainful employment” regulations will be revised, after being thrown out last year in court. The U.S. Education Department has announced plans to use the regulatory process — not legislation — to advance its college aid and affordability agenda.

Judge strikes ‘gainful employment’ rule

Parts of the Education Department’s “gainful employment” rule are invalid, a federal judge has ruled. The for-profit colleges’ trade association had challenged the rule, which could cut off student loan eligibility to vocational programs whose graduates don’t earn enough to pay off their loans.

Also on Community College Spotlight: High school graduates and their parents are increasingly wary of high college costs, guidance counselors say. More students are starting at community college or living at home to save money.

College for some?

Do too many young people go to college? If so, who shouldn’t go?

Also on Community College Spotlight:  Five percent of job-training programs, all at for-profit colleges, have failed the Education Department’s new “gainful employment” rules. Eventually, students won’t be able to use federal grants or loans to attend career colleges whose graduates have high default rates and low earnings.

Obama: Raise tuition and lose federal aid

College affordability was the theme of President Obama’s speech at the University of Michigan yesterday. He called for spending more on Perkins loans and work-study programs — going from $3 billion now to $10 billion  – but only at colleges and universities that provide “value.” Students at colleges that raise tuition could lose access to loans and work-study jobs.

In addition, the president’s plan (pdf) includes a $1 billion “Race to the Top for college affordability” and a $55 million “First in the World” competition to encourage productivity innovations, reports the Washington Post.

Higher education — including community colleges and lifelong learning for workers — is “an economic imperative,” Obama said. While he proposed increasing tuition tax credits and keeping interest rates low on student loans, he said that’s not enough. “Look, we can’t just keep on subsidizing skyrocketing tuition.”

So from now on, I’m telling Congress we should steer federal campus-based aid to those colleges that keep tuition affordable, provide good value, serve their students well.  (Applause.)  . . . If you can’t stop tuition from going up, then the funding you get from taxpayers each year will go down.

If “provide good value” and “serve their students well” means anything, it means the federal government will monitor graduation rates and employment outcomes, as well as tuition, for the entire higher education sector. Currently, “gainful employment” rules, which monitor former students’ earnings and ability to pay back loans, cover only for-profit colleges and community college vocational programs.

 Following the speech, Molly Corbett Broad, president of the American Council on Education, issued a statement saying there’s concern that the proposal would “move decision-making in higher education from college campuses to Washington, D.C.”

Sen. Lamar Alexander, R-Tenn., a former education secretary, said the autonomy of U.S. higher education is what makes it the best in the world, and he’s questioned whether Obama can enforce any plan that shifts federal aid away from colleges and universities without hurting students.

“It’s hard to do without hurting students, and it’s not appropriate to do,” Alexander said. “The federal government has no business doing this.”

President Obama also touted college “report cards” showing college costs and how well graduates do in the job market.

The U.S. Education Department and the Consumer Financial Protection Bureau are working on Know Before You Owe, a financial aid shopping sheet that will let future students estimate their debt, monthly payment and likely ability to repay loans. Parents and students also have requested a breakdown of college costs and information on repayment rates for graduates at each college.

Public college requires student drug tests

Every new student at a Missouri technical college must take a drug test. This appears to be most sweeping drug-testing policy at any public college or university in the U.S.  It’s undoubtedly headed for court.

Also on Community College Spotlight: In redefining success for community colleges should graduates’ “gainful employment” be considered?

A compromise on student loans

A compromise on student loan rules for career colleges is pleasing nobody.  For-profit colleges complain “gainful employment” rules unfairly restrict access to federal loans, while the industry’s critics say the rule has been watered down in response to heavy lobbying. Only 35 percent of borrowers need to repay loans to keep a career college eligible for more aid. That doesn’t seem unreasonable.