Community Colleges Worried About New Student Loan Rules

Most of the institutions likely to be adversely affected by the Department of Education’s new gainful employment rules—under which vocational colleges wouldn’t be eligible for federal financial aid if average graduates need to spend more than 8 percent of starting salaries to service student loans—are for-profit schools.

Not all of them, however. According to a piece in the Chronicle of Higher Education:

The American Association of Community Colleges is urging its members to weigh in on the Education Department’s “gainful employment” proposal, warning that the draft rule could “negatively affect some certificate programs.” [The association] suggests that colleges ask the department to clarify that the rule would not apply to one-year certificate programs that lead to associate degrees and to exempt from the rule programs in which fewer than 35 percent of students borrow federal loans, among other changes.

Community colleges are worried about how the new regulations would impinge on certificate programs that do not result in an academic degree. (Subjecting such programs to the proposed gainful employment rule, it appears, would be bothersome because the certificates themselves don’t really lead to salary increases, though the certificates themselves are often a necessary component of a degree program.)

Community colleges also want to exempt programs in which less than 35 percent of students have federal loans.

Read the American Association of Community Colleges letter here.

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