New Federal Rules Set on Career Colleges

After receiving 90,000 public comments, and making 82 changes, the Department of Education will release its final rules [today] to require career colleges to disclose graduation and job placement rates, end misleading recruiting practices and ensure that only eligible students or programs receive federal student aid.

The final regulations on these for-profit colleges cover 13 of the 14 program-integrity questions the department has plans to address. The one that remains is the “gainful employment” regulation that would cut off federal student aid to programs whose graduates borrow too much and earn too little to repay their debts. The department will hold hearings next week on the topic, and will meet with interested parties to discuss that regulation, which will be finalized next year, and go into effect in 2012.

On Wednesday, Lanny Davis, a lobbyist for a group of career colleges, held a news call urging the department to delay final rules on approving new vocational programs. He said that the rules were so onerous as to make it impossible for a career college to start a program in, for example, wind energy, unless it could predict the job opportunities in the field years in advance.

The department is issuing the new rules on adding programs this week, as planned. But in a news briefing Wednesday, it explained that most colleges would be required to notify the department only 90 days before opening a new program. It said that only institutions with problematic track records would be asked to go through the full program-approval process, designed to prevent career colleges from skirting the gainful-employment rule by flooding the market with new or restructured programs without the required student-loan repayment data and employment history.

The regulations will be available online on Thursday, published in the Federal Register on Friday and take effect in July. [via New York Times]

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