A penalty for college programs that trap students in debt
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Photo Credit: Brooke Cagle
Starting in July 2024, career training programs could lose federal funding if their graduates leave with lots of student debt relative to their earnings — or if the typical graduate earns roughly less than $25,000. A similar concept would also apply to many colleges and universities that receive federal aid: Schools would have to warn students if they fail Biden’s new debt and earnings metrics — though only low-rated career programs would face a loss of funding.
The Education Department has estimated that nearly 1,700 programs would fail to meet the administration’s new standards. Another 400 graduate programs at nonprofit and public universities would also be forced to notify their students that they failed. More than 800,000 students are collectively enrolled in these programs. The department also estimates the policy will save federal taxpayers nearly $14 billion over the next decade by reducing defaults on federally backed student loans.
Cosmetology schools, truck-driving programs and top-flight graduate institutions could soon be held publicly accountable for how their students fare in the workforce. But angry conservatives and for-profit colleges despise this looming Biden administration policy, and could launch a legal challenge to stop the rule from taking effect.
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