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Ministry of Education delays paid employment proposal until 2023

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Diving brief:

  • The U.S. Department of Education has pushed back the timeline for releasing its proposed revised paid employment rule to next year, meaning it could go into effect no earlier than mid-2024.
  • The gainful employment rule aims to ensure that students who complete career education programs can find work and pay off their student debt. The Biden administration was originally supposed to release its paid job offer in July, but it pushed that date back to April 2023 in a regulatory calendar published on Tuesday.
  • Representatives of the for-profit sector applauded the delay. They have previously criticized the Biden administration’s ideas for a paid employment rule – which looked at students’ debt levels and how their incomes compare to those of high school graduates – arguing they unfairly target the for-profit sector.

Overview of the dive:

Due to the delay, the Paid Employment Regulations will miss a key November 1 deadline for the rule to come into effect next year. The rule can now take effect no earlier than July 1, 2024.

Policy experts have warned that the delay could allow underperforming colleges to continue to receive federal funding and hurt students.

“Ultimately, it can be devastating for students who enroll in these programs,” said Michael Itzkowitz, senior fellow at Third Way, a left-leaning think tank. “It is important that the Department of Education works to implement this rule as soon as possible.”

Delaying the rule will also likely push back the time frame in which colleges could face sanctions. Previous proposals would require colleges to fail to meet the rule’s standards for two out of three years before risking losing access to federal student aid.

β€œThe Department may not require anything to happen or punish schools or make changes until 2025, 2026,” said Nathan Arnold, senior policy adviser at EducationCounsel, a consulting firm and former staffer. of the Department of Education. “Each additional year that bad schools are allowed to operate without corrective action means thousands more students are left worse off.”

A spokesperson for the Department of Education called the gainful employment rule a “cornerstone of our ambitious regulatory agenda,” in an email Wednesday.

“We look forward to issuing a notice of proposed rulemaking in the spring of 2023 to produce the best and most enduring rule possible to protect students and borrowers,” the spokesperson said.

The administration plans to release a list of other new rule proposals in June 2022, consistent with the regulatory agenda. This includes an update to the Borrower’s Defense Against Repayment, which seeks to forgive federal student loans that have been defrauded by their institutions.

The gainful employment rule has had a checkered history. The Obama administration initially created the regulations out of concern that students would enroll in vocational education programs that would not lead to jobs with incomes high enough to repay their loans. Under the rule, colleges whose graduates had too high a debt-to-equity ratio could be cut off from their federal financial aid.

But this version of paid employment regulation was short-lived. The Trump administration repealed the rule in 2019 after delaying key elements from taking effect. Then-Education Secretary Betsy DeVos argued that the rule unfairly singled out for-profit collegeswho represented the majority of schools who have not reached the debt to rule earnings threshold.

In March, the Biden administration floated a new version of the rule during negotiated rulemaking, a process in which the Department of Education convenes representatives from different higher education contingents to discuss proposed regulatory changes. As part of this project, the Department of Education proposed using two metrics to evaluate career education programs: a debt-to-income ratio and a new metric to compare student income to graduate income. high school in their states.

The rule would cover programs at for-profit colleges as well as non-degree programs at nonprofit institutions.

According to the proposal, nearly 44% of for-profit programs subject to the rule would not meet the high school income threshold, according to an analysis from june conducted by The Institute for College Access & Success, a research and advocacy group. This compares to 33% of programs at private nonprofit organizations and 18% of programs at public colleges.

However, the Ed department failed to reach consensus with negotiators on the settlement, several representatives opposing the agency’s proposal, including those from community colleges, private nonprofits and for-profits. The Department of Education now has broad authority to retain or modify the language it came up with during the process of developing the negotiated rules.

Department spokesman Ed called the March proposal “our vision to create a strong paid employment rule” in Wednesday’s email.

Career colleges and universities, which represent for-profit institutions, welcomed the delay on Tuesday.

“CECU is pleased that the Department of Education is taking the time necessary to reconsider its ill-conceived plans to come up with an accountability measure that exempts the vast majority of higher education institutions,” said CECU President Jason Altmire. , in a press release.

Nicholas Kent, CECU’s policy director, said the organization met with Ed Department officials after the negotiated rulemaking sessions to discuss its issues with the gainful employment proposal. Kent also argued that the Education Department did not give negotiators enough time to consider how its proposal would affect the higher education sector.

He argued that the paid employment rule should apply equally across all sectors, although other policy experts say the Department of Education does not have the power to make this change without change federal law.

β€œWe hope that a good, strong, fair and equitable accountability framework can last beyond jurisdictions,” Kent said.

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