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Measuring the employment rates of for-profit grads

Graduates attend the 2012 George Washington University Commencement at National Mall in Washington, D.C.

The Obama Administration is taking another crack at reining in for-profit colleges. Some schools have come under fire for saddling students with heavy debt loads and light-weight credentials. After a federal court threw out new regulations last summer, negotiators are back at the table today.

The original “gainful employment” rules would have punished career colleges if more than 35 percent of their former students were not repaying their loans. The idea was to weed out expensive programs that don’t lead to good-paying jobs. A U.S. district judge threw out the 35 percent rule, calling it an arbitrary threshold.

“The judge has been very clear this entire time that the department has the legal authority to regulate this area if it chooses to do so,” says Ben Miller, a policy analyst with the New America Foundation who worked on the regulation while at the Education Department. “The issue with the courts is really just where you drew the line on one threshold.”

A new, tougher draft proposal would focus instead on the amount of debt graduates have, compared to what they earn.

There are better ways to measure student success, says Steve Gunderson, president of the Association of Private Sector Colleges and Universities. “Do you get placement in the area of your study, and did you actually complete your study? Did you graduate?”

Gunderson’s group wants the Obama Administration to hold off on new rules until Congress takes up the Higher Education Act, which is due for reauthorization this year.

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.

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