Biden delays employment, pushes student loan debt protection

  • Biden pushes the implementation of the “gain labor rule” back into his regulatory agenda.
  • The rule would prevent student loan borrowers from taking on too much unpayable debt after college.
  • Biden has resisted efforts by proponents to reintroduce the rule repealed under Trump.

President Joe Biden’s to-do list for the coming year includes many things, and a rule that prevents for-profit student debt from growing is not one of them.

In 2014, then-President Barack Obama instituted what he called the “gained employment rule,” which restricted state aid to schools offering career and certificate programs that left their students with a large amount of tuition debt compared to their likely post-graduation earnings. The regulation was intended to prevent students from taking out too much credit that they would no longer be able to pay off after graduation due to their career prospects.

Former Secretary of Education Betsy DeVos repealed the rule in 2019, and despite proponents’ calls for Biden to reintroduce it, the president’s recent regulatory agenda pushed it back to July 2024 at the earliest.

A spokesman for the Department of Education told Insider that “the government is committed to preventing a future student debt crisis by holding colleges and universities accountable for leaving students in debt or without good jobs.”

“That vision included strengthening standards for professional training programs and requiring that graduates of the programs earn more than those who never went to college, a move that would ensure students were getting value for their tuition,” said the spokesman. “The gainful employment rule is a cornerstone of our ambitious regulatory agenda. We look forward to issuing a notice of proposed rulemaking in Spring 2023 to create the best possible and enduring rule to protect students and borrowers.”

The administration usually publishes a list of proposed regulatory actions for federal agencies twice a year. However, prioritizing for the Department of Education can be a year-long process that involves negotiated rulemaking meetings where experts come together to discuss higher education policies that the Department would like to implement.

The salaried work rule is one of the issues discussed, and while student loan advocates are pushing for the rule to be reintroduced, representatives of the for-profit education industry wanted it to be slower. For now, it looks like the latter has won and the administration is hitting the brakes.

Jason Altmire, the president and CEO of Career Education Colleges and Universities, which represents for-profit institutions, said in a statement he was “pleased that the Department of Education is taking the time necessary to consider their ill-conceived plans to propose an accountability.” , which excludes the vast majority of colleges.

“We look forward to working with the Department over the coming months to develop a meaningful and fair rule that applies to all institutions in all sectors,” Altmire said.

Leaders in the for-profit education industry have criticized the earn-work rule for segregating for-profit schools, even though the rule applies to almost all programs offered by for-profit schools and non-graduate programs in public and non-profit schools for which students can earn certifications in cosmetology, medical or legal assistant and vehicle repair and maintenance, among others.

But proponents are puzzled that the rule is being postponed — especially since Biden’s Secretary of Education James Kvaal, who helped shape the rule as assistant secretary of state under Obama, called the failure to implement it under former President Donald Trump in 2018 “negligent.” when he was President of the Institute for College Access and Success.

“It’s one thing to say we’re struggling to execute,” Kvaal said at the time. “But to say that we will ignore this regulation because we have encountered logistical problems, I believe to be negligent and a failure to fulfill their responsibilities.”

Biden has dismissed efforts by attorneys in court to reinstate the rule

The Department of Education released data on employment accountability measures in 2017 – essentially a comparison of post-certification earnings to student debt – and found that more than 800 programs would not meet the rule, 98% of them for-profit colleges. After the rule was officially repealed, advocates went to court to reinstate it to prevent bad outcomes for student loan borrowers.

Student Defense, a group that advocates for borrower rights, filed a lawsuit in 2020 on behalf of the American Federation of Teachers, the California Federation of Teachers and individual members, demanding the Department of Education reinstate the Obama-era wage-earning rule to introduce

“This error-ridden cancellation would be comical if the stakes weren’t so high, but for borrowers who have faced a lifetime of debt and bad deals, their lives are literally on the line,” said Randi Weingarten, president of AFT, in a statement at the time. “We are confident that the court will reject this illegal move and support the students that DeVos has smuggled over and over again.”

But Biden’s attorneys filed a brief opposing the request in October, and alongside the brief, Kvaal filed an affidavit saying the reinstatement of the rule would “cause significant disruption and a diversion of resources from the department’s priorities, which includes restoring student protection in this rule. “

Certainly, Biden took a number of steps to help borrowers who attended for-profit schools and were scammed by them. His Department of Education has granted over billions of dollars in relief to cheated borrowers, and improving that process is on the department’s regulatory agenda. Nevertheless, the department is delaying the implementation of the employment rule and is initially going back to the rule-making process with the potential to come into force in July 2024 at the earliest.

“In the past few weeks, the department has announced more than $11 billion in debt relief for cheated students,” Dan Zibel, vice president of the chief counsel of student defense, told Insider. “This is great news and long overdue for those who have been scammed. At the same time, the ministry has now delayed proceeding with its signature proposal to ensure students and taxpayers don’t pay that price again. That’s disappointing and could prove expensive.”

Leave a Reply

Your email address will not be published.