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Feds Easing Rules on For-Profits

Some for-profit career schools have not liked the “gainful employment” rule promulgated by the Obama Administration. The rule—never implemented completely—requires proprietary schools to demonstrate that their students get jobs with salaries or wages high enough to justify loans. Reportedly, many students take on massive debt to train for jobs that barely pay above minimum wage.

Federal funds may be involved, such as with veterans benefits and Pell Grants. In fact, that’s the leverage held by the feds in enforcing any rules. A few for-profits have gone out of business in the wake of impending changes.

Now, two weeks after announcing a regulatory rewrite of the gainful-employment rule for non-degree career education programs, Education Secretary Betsy DeVos has announced that she is delaying key provisions of the existing rule. It’s reported by Andrew Kreighbaum, in Inside Higher Ed.

The field of cosmetology is mentioned in the article as an example. If for-profit cosmetology schools make a comeback during the Trump Administration, it could affect enrollments at local community colleges, where cosmetology is often an important workforce training program. Tuition can be astronomically higher at the propriety school than at a community college.

For-profit schools offering career training programs often recruit students aggressively, with promises of lucrative careers and easy access to financial aid. You can see the ads on TV. As one critic noted a few years ago, it’s certainly possible to get wealthy if you are a cosmetologist—say for Oprah or Ivanka—but the goal for most students, especially in this particular program, is a solid, respected career that pays the bills, including student loans.

For-profit institutions have a place, especially if they offer programs unavailable elsewhere. That should be the standard.

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