One in every three “career colleges” have been found to leave their graduates with too low of an earning potential to cover their student debts. However, many criticize the method in which this statistic was derived, as it doesn’t account for some important details.

The Finding

According to recent findings, 1 of every 10 graduates from “career colleges” end up with post-graduation salaries too low to pay for their student loans.

Some education advocates have raised the concern that this figure may jump during the Trump era.

“Career colleges” are for-profit institutions that specifically boast about their particular ability to give their students the knowledge and skill required for gainful employment as a way of justifying such high tuitions and fees. Such colleges have been obligated to follow what is called the 2014 “gainful employment rule,” an Obama-era rule, which compares their earning potential to their debts in order to determine the benefit of attending such schools. The rule aimed to hold for-profit institutions accountable for the amounts they ask from their students.

Earlier in the year, the Education Department released data showing that 10 percent of the 1.1 million career college graduates attended schools that failed the “gainful employment rule,” and 20 percent them fell into what is called the “warning zone” with regards to their salaries versus their debts.

It found that almost 33 percent of graduates took part in gainful employment programs that have been flagged for offering limited earning potential with unmanageable debt.

Comments on the Findings

“Gainful employment is one of the only tools that we have right now at the federal level that even comes close to warning students of outcomes for poor programs and then holds schools accountable for the programs that are making kids worse off,” said Tamara Hiler, a higher-education campaigning manager and senior policy advisor at “Third Way”- a Washington-based non-partisan policy “think tank.”

“These are real students that we’re talking about that are going to these programs that are actively making their graduates worse off,” Hiler said. “These are students who played by the rules, they took the classes they were supposed to take, they got the degrees that were told would be worth something and they’re still not able to get jobs and pay off their loans. If we were to include the outcomes for students who did not graduate, these numbers would be significantly worse.”

Some have argued that the employment rule is burdensome, unfair, confusing and inapplicable to some schools. Some criticisms include that it doesn’t take into account certain careers that have low paying salaries to start with, but rises in the long term, such as commission-based or client-based careers. Another is that it doesn’t account for jobs that offer low salaries but cover expenses such as food and housing, such as cruise ship jobs.

“While students should have protections from predatory practices, schools and taxpayers should also be treated fairly as well,” said Education Secretary Betsy DeVos on Friday. “Under the previous rules, all one had to do was raise his or her hands to be entitled to so-called free money.”


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