What's Happening?
The Department of Education and an advisory committee are in the final stages of negotiating new rules for a college earnings test called 'Do No Harm.' This test applies to all degree programs and aims to align with the existing gainful-employment rule,
which currently applies only to certificate programs and for-profit institutions. The proposed changes would require all college programs, except undergraduate certificates, to demonstrate that their graduates earn more than individuals with only a high school diploma to maintain access to federal loans. The committee, consisting of state officials, think tank researchers, and higher education lawyers, has struggled to reach a consensus on these changes. Key issues include the debt-to-earnings ratio and the Pell Grant penalty. If consensus is not reached, the Department of Education may proceed with its own regulatory changes, potentially eliminating the gainful employment rule entirely.
Why It's Important?
The outcome of these negotiations could significantly impact the accountability standards for higher education institutions across the United States. The proposed rules aim to create a level playing field by holding all programs to the same standards, which could lead to more consistent accountability measures. However, there is concern among consumer protection advocates that the changes might dilute existing standards, potentially putting students at risk. The decision could affect the distribution of federal student aid, including Pell Grants, and influence the financial viability of certain educational programs. Institutions that fail to meet the new standards could lose access to federal funding, which would have significant financial implications for both the institutions and their students.
What's Next?
The Department of Education plans to continue discussions with committee members to try to reach a consensus. If no agreement is reached, the department may implement its proposed changes independently. This could lead to legal challenges from consumer protection groups and other stakeholders who oppose the changes. The department has indicated it will work on new language to address some of the concerns raised during negotiations, but it remains uncertain whether these efforts will be sufficient to achieve consensus.
