DeVos to redo two Obama-era rules on for-profit schools
BY LYDIA WHEELER - 06/14/17 04:51 PM EDT
The Trump administration is planning to redo two Obama-era rules aimed at ensuring students at for-profit colleges get the education they pay for. ... Education Secretary Betsy DeVos said Wednesday the department is establishing rulemaking committees to rework the gainful employment and the borrow defense to repayment rules.
The gainful employment rule requires schools to ensure their career training programs actually prepare students for good-paying jobs that allow them to pay for their student loans. ... Under the rule, which went into effect in 2015, the estimated annual loan payment of a typical graduate has to be at or below 20 percent of his or her discretionary income or 8 percent of his or her total earnings or an institution risks losing its ability to participate in taxpayer-funded federal student aid programs.
The borrower defense to repayment rule set out to better protect student borrowers against misleading and predatory practices by giving creating consistent, clear, fair and transparent processes to file claims.
Due to pending litigation the Education Department said it’s delaying the borrower defense to repayment rule, which was set to take effect on July 1. ... For-profits have slammed the rule as unfairly punitive because it establishes automatic triggers that would require a school to put up a letter of credit — a large sum of money — every time a lawsuit is filed against it to protect taxpayers if the institution fails.
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