Pauline Abernathy, vice president of the Institute for College Access and Success, said the federal regulations were nothing more than a starting point for how the government should protect college students who attend for-profit colleges.

Abernathy said the “gainful employment” rule was “a first step in preventing federal taxpayer dollars from being wasted on career education programs that leave students with nothing but insurmountable debt.”

“Unfortunately the final rule will allow many programs that over-charge and under-deliver to continue to receive federal student aid,” she said.

Delaying implementation of the rules means it will “take longer to protect students and taxpayers from the worst of the worst programs,” Abernathy said.

Giving colleges a four-year window before ED’s three regulations take effect was necessary for institutions that will have to provide reams of new data proving federal compliance, said Andrew Magda, a senior analyst for Eduventures, a higher-education consulting service based in Boston.

“The department has realized that with what they are asking the schools to assemble and what they are asking government agencies to examine, a window of compliance was needed,” he said.

There are three new ED requirements for for-profit colleges to receive federal loan money:

  • Students must be spending 12 percent or less of their total income on loan repayment after they’ve graduated.
  • Graduates must be spending 30 percent or less of their discretionary income on loan repayment.
  • Thirty-five percent of former students must be paying down their loans by at least one dollar every year.


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