Depends on What a Problem Is


The Department of Education will soon issue new rules about for-profit schools. At issue is the infamous “gainful employment” rule. The rule, if instituted, would make for-profit schools ineligible for federal financial aid if average graduates need to spend more than 8 percent of starting salaries to pay off student loans.

According to an article by Tamar Lewin in the New York Times, for-profit schools are fighting hard to prevent this. As Lewin explains:

“Shouldn’t the Department of Education have to present some facts and figures showing that there’s really a problem with students who have debt-income ratios above 8 percent?” said Harris Miller, president of the [Career College Association]. “They haven’t shown any evidence. And our own research shows that students with high debt-income ratios actually default less than students with low debt-income ratios.”

What? Now I have no particular stake in this issue and eight percent does seem like a more or less arbitrary figure but the Miller explanation seems pretty weak. Isn’t having a high debt-income ratio a financial problem by definition? [Image via]

Washington Monthly - Donate Today and your gift will be doubled!

Support Nonprofit Journalism

If you enjoyed this article, consider making a donation to help us produce more like it. The Washington Monthly was founded in 1969 to tell the stories of how government really works—and how to make it work better. Fifty years later, the need for incisive analysis and new, progressive policy ideas is clearer than ever. As a nonprofit, we rely on support from readers like you.

Yes, I’ll make a donation

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer