Students pursuing education beyond high school have several different paths to choose: attend a trade school, community college, baccalaureate program, or for-profit institution – all of which can either be public, private non-profit or for-profit. Unfortunately, student outcomes and costs vary tremendously depending on the path pursued.
According to the U.S. Department of Education, attending community college is one-fourth the cost of attending two-years at a for-profit institution. This causes 80 percent of students attending for-profit institutions to borrow, while less than 50 percent of students at public institutions have to borrow.
The Obama Administration has announced new regulations that will go into affect on July 1, 2015 to help improve outcomes for students and also protect them from massive amounts of debts. These new regulations will hold colleges accountable as they prepare students for “gainful employment in a recognized occupation.” If colleges are unable to meet these standards, then they will lose access to federal student aid.
The new regulations consider “gainful employment,” to be when a student’s loan payment does not exceed 8 percent of his/her total earnings, or 20 percent of his/her discretionary income. These regulations are geared to meet the following goals:
- Provide transparency about student success
- Improve student outcomes
- Increase accountability standards
The U.S. Department of Education estimates that 1,400 programs will not meet the new accountability standards. Without the financial aid, it will become increasingly difficult for students to afford career training programs and thus pursue attending these programs.
Transform Consulting Group works to stay current with the latest research and policies that impact our clients along the cradle to career continuum. Contact us today for a free consultation about how to align your programs and services with this current information!