What the New Gainful Employment Rule Means for College Students

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Education loan in India
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What the New Gainful Employment Rule Means for
College Students

• The gainful employment regulation requires
  vocational programs at for-profit higher
  education institutions and no degree programs at
  community colleges to meet minimum thresholds
  with respect to the debt-to-income rates of their
  graduates.
• Programs that fail to meet these minimum
  requirements could lose access to all federal
  financial aid for a period, putting them at a
  higher risk of closing.

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• Gainful Employment's Rocky Road
• In 2009, the Department of Education began a
  negotiated rule-making session with the goal of
  strengthening federal aid program regulations to
  better serve students and families. Gainful
  employment was rooted in the concept that a
  school should experience consequences for the
  lack of success of its alumni.
• The idea was to try and ensure that programs
  where students needed to take on debt to attend
  provided a robust enough education that these
  students could obtain employment with wages high
  enough to allow them to successfully repay that
  debt.

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• How Gainful Employment Works?
• The rule measures a program's graduates'
  debt-to-income as follows
• Programs whose graduates have annual loan
  payments less than 8 percent of total earnings or
  less than 20 percent of discretionary earnings
  are considered to have passed the requirements.
• Programs whose graduates have annual loan
  payments between 8 percent and 12 percent of
  total earnings or between 20 percent and 30
  percent of discretionary earnings are considered
  to be "in the warning zone" and at risk of
  failing the requirements.

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• Programs whose graduates have annual loan
  payments greater than 12 percent of total
  earnings and greater than 30 percent of
  discretionary earnings have failed the
  requirements.
• Programs that fail in two out of any three
  consecutive years or are in the zone for four
  consecutive years are no longer eligible for
  federal student aid for a minimum of three years.

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• What This Means for Consumers
• Students who attended a school that had to shut
  down because of gainful employment would be
  eligible for a discharge of their federal
  Education loan in India debt However, that's not
  really an ideal situation, both for the student
  and the taxpayer who ultimately pays when federal
  debt is forgiven. A much better turn of events is
  for students to go into these types of programs
  with eyes wide open.
• Source (http//bit.ly/1HetiOl)

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