It’s time for us to pick up this story again. Late last week, the U.S. Department of Education finally released an 841-page notice of a new proposed final Gainful Employment Rule (GER) aimed at predatory, debt-laden higher education, particularly at for-profit colleges. The for-profits enroll about 13 percent of the total higher education population but account for about 31 percent of all student loans and nearly half of all loan defaults.
The new rule seems to have a better chance of withstanding an inevitable legal challenge than DOE’s 2012 version, and it gets tougher on career colleges in a few ways outlined below, although it's still pretty forgiving to the colleges.
The regulation would apply not just to the for-profits but also to certain non-degree certificate programs at public and non-profit schools, both of which are expected to pass muster under the rule at a higher rate than the for-profit schools. Based on FY 2010, four million students attend all “gainful employment” programs, which receive about $36 billion a year in federal student grant and loan funds, $26 billion of that in loans that students can’t discharge in bankruptcy absent “undue hardship.”