Report: How Gainful Employment Reduces the Government’s Loan Forgiveness Costs
As the political climate in Washington shifts in favor of deregulation, the gainful employment rule has become one of the most endangered protections for college students. When fully implemented, the rule will terminate federal student aid eligibility for career training programs that leave their graduates with too much debt relative to their earnings.1 Without this rule, hundreds of thousands of students run the risk of paying large sums of money to attend low-quality programs that leave them underemployed and mired in debt. These students would either face a lifetime of financial hardship or rely on payment plans based on their income that have long repayment terms and accumulate great deals of interest before ultimately obtaining taxpayer-supported loan forgiveness. The real winners would be colleges offering these low-value programs that would continue to pad their revenues with government-funded student loans.