Judge overturns "gainful employment" rules

this relates to the financial aid the schools are able to accept

http://www.nytimes.com/2012/07/02/education/judge-strikes-a-for-profit-college-regulation.html?_r=1&ref=education

 

Here are the regulations that were struck down:

And this is who was affected:

The judge ruled that there was "no basis" for using the 35% debt-repayment rate as a factor for maintaining eligibility for federal aid.

The decision is a clear win for the for-profit education sector, which has been strongly opposed to these regulations.

 

The for-profits didn't get everything they wanted, though, because the disclosure rules were upheld:

 

The department of education needs to be abolished.

 

And exactly why?

 

There is an incredible amount of red tape that is directly related to the department of education. It's probably worst from k-12. State education did just fine before the feds began forcefully sticking their nose into it at a national level. Can you name some reasons why the department of education should exist?

 

There is, among some political conservatives the notion that the federal department of education serves no useful purpose. I believe that they would describe the DOE as a large organization that costs the taxpayer a lot of money while accomplishing very little and what it succeeds in accomplishing is not especially desirable. They would probably point to the "no child left behind" law which has proven to be a mistake and many states are currently in the process of wiggling out of it. Of course it's interesting that this law was introduced by George Bush (this first one) and was co-authored by John Boehner but, in any case, I think that would be the general argument against the DOE. How did I do me again?

 

Could that possibly be both DOEs, maybe?:scool:
DOE - Energy.gov | Department of Energy
DOE - U.S. Department of Education

 

Personally, I don't know enough about either DOE to have what I would consider to be an informed opinion but in general political conservatives believe in small government and so some might agree with you. I think that the issue of nuclear power, safe, consistent standards and the transportation of nuclear waste across state lines might be sufficient cause for the existence of a federal dept. of energy.

 

Your analysis fits within a majority perception.

Even if Ronald Reagan or George Bush or the most staunch Republican endorsed a federal department of education, I would not.

 

I really don't have an opinion either - at this time! Just asking……since we seem to have some stink from all sides.:biggrin:

 

Full disclosure is good for ALL schools and students!

Back to regular programing……I do think full disclosure is good for public, private, profit and not profit schools - at any level of education. :lew:

 

How does a school have any idea of their students median debt load? I have never provided any financial information to my schools and never will. I understand that some people fill out the FAFSA but I don't and many people like me don't either.
Both of those departments should be reevaluated for their effectiveness in achieving their original missions. The energy department was created to ween us off of foreign oil and to lower gas prices. We now consume more and gas is expensive. The dept of education was supposed to improve educational outcomes. I doubt that it has since we are falling behind other countries in math and science.
The country existed and prospered for 200 years before these departments were created.

 

I believe I've seen some positives out of "no child left behind"-- the local schools in my area are pushing harder to ensure the kids are actually getting educated, even if there is a little too much emphasis on passing exams. I think the law had some good ideas, it just may not be focused properly.

As to the DOE in general-- I think the DOE still can serve some useful purposes, but it has to be administered properly and kept focused on clear goals.

 

Tell me it isn’t so…….mission creep happens in big anything? Shocked I tell you!:eek1:

 

The judge left two parts of "gainful employment" and struck down the third (loan default rate of graduates) because it the prescribed level for Title IV denial were arbitrary and were not based on any solid research to justify its existence. Although the other two parts were determined to be based on reliable measures, they were so intimately tied to the loan default rate that they were invalidated as well.

The fatal flaw of gainful employment has been the idea that a school can somehow control what its graduates do with their loans years after they graduate. If a student borrows money to buy a car and then, three years later, stops making payments on the loan, does anyone suggest punishing the car dealership? Does anyone suggest pulling the license from a realtor who sells a home to someone who later stops making mortgage payments?

The "logic" behind "gainful employment" is that graduates stop making payments on their student loans because they did not receive a good enough education, however, people stop paying on their debts for many reasons, including health, divorce, job loss and the desire to apply the debt to other priorities. Colleges and universities simply cannot control for these (and other) reasons why students would default on their loans.

 

Suppose I lend money to borrowers who buy cars or houses. As a lender, I face the risk of financial loss if those borrowers default on their loans. Suppose I notice that there are unusually high default rates from loans originating with certain car dealers or with certain realtors.

Would I suggest punishing the car dealerships? No. Would I suggest pulling the realtor's license? No.

But here's what I would do: I would consider loans originating with those car dealers or realtors to be unusually high risk, based on that history of unusually high default rates. And I would either stop making those loans entirely, or else I would demand higher interest. Any rational lender would do the same.

Why shouldn't the federal government, as an education lender, do exactly the same thing? Why should any lender -- whether lending money for cars, real estate, education, or whatever -- offer the same terms in both low-risk and high-risk situations?

If the loans originating with a particular car dealer or realtor or school have high default rates, that may or may not be fault of the dealer or realtor or school. But from a lender's perspective, it doesn't matter. The point is that those loans are costing too much.

 

That is why we have credit history and these guys. It all comes down to how reliable - money or other ways - you are.