Education Department Vows For-Profit College Rules On Track Despite Delay

Although the U.S. Department of Education recently delayed issuing a final rule that will govern for-profit colleges, it clarified on Friday that it plans to implement the regulation on the same timeline as initially planned. Nonetheless, the delay is a reminder of the importance of submitting comments to proposed rules that would negatively impact an institution of higher education.

Last week, the Department of Education indicated that a final rule on the highly controversial "gainful employment" proposal could be expected in early 2011, rather than on November 1, 2010, as originally planned. Despite the delay in issuing the final rule, the Department clarified in a news release that it intends for the regulations to go into effect on or around July 1, 2012, as previously planned.

The Department attributed the delay to the nearly 80,000 comments it received during the "notice and comment" period for the proposed regulation. After a rule is proposed, any person or organization may comment on it in writing within a proscribed period of time. In this case, supporters of the rule argue that it will ensure that federal funds are only given to schools that equip students with the ability to repay their student loans upon graduation. Opponents maintain that the rule among other things (1) will limit access to higher education by possibly eliminating federal financial aid for programs where high proportions of students are not repaying the principle on their student loans or end up with excessive debt loads for the salaries they can earn, (2) is based on incomplete data and (3) unfairly singles out only one sector of higher education.

The gainful employment rule, as proposed in July, would limit federal funding for for-profit colleges to those schools that can demonstrate their students are gainfully employed after graduation. Gainful employment would be defined based on debt-to-income ratios and loan repayment rates for graduated students.

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