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Published: August 2010

Students need protection from schools that don’t deliver “gainful employment”

Coalition: Federal Student Loan Fairness

Consumer Action signed onto a letter asking the U.S. Secretary of Education Arne Duncan and the former Director of the Office of Management and Budget Peter Orszag to issue a clear definition of the "gainful employment" provision in student loan regulations in order to ensure students, and taxpayers, are getting what they pay for from colleges and universities.

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Below is the full text of the letter:

Thank you for proposing important new regulations aimed at ensuring that taxpayer dollars are spent appropriately and effectively on federal student aid. However, as organizations representing students, higher education, consumers and civil rights, we write to urge the Obama Administration to issue draft regulations defining “gainful employment” in time to be finalized by November 1 and go into effect in July 2011, along with rules on the other Title IV program integrity issues addressed in the June 18, 2010 Notice of Proposed Rulemaking.

Each year, students borrow and taxpayers spend billions of dollars to subsidize attendance at programs required by law to “prepare students for gainful employment in a recognized occupation.” Yet current regulations include no definition of “gainful employment.” It is critical that regulations with a strong definition of gainful employment go into effect next year. To be effective, the definition must be measurable, enforceable, not overly burdensome to schools, inclusive of all debt incurred at affiliated schools, based on accurate, consistent and independently verified data, and avoid loopholes.

In the next year alone, taxpayers will likely underwrite more than $30 billion in loans to students attending programs that are required to prepare them for gainful employment. Students and taxpayers shouldn’t have to wait yet another year to be protected from career education programs that over-charge and under-deliver. Your prompt action will demonstrate the Obama Administration’s commitment to invest in education, cut wasteful spending and strengthen our economy.

Lead Organization

The Institute for College Access and Success

Other Organizations

American Association of Collegiate Registrars and Admissions Officers | American Association of University Women | American Federation of Teachers | American Federation of State, County, and Municipal Employees International | American Federation of State, County, and Municipal Employees Local 3299 | Campaign for America’s Future | Campaign for College Affordability | Campus Progress Action | Community College League of California | Crittenton Women’s Union | Dem!s: A Network for Ideas and Action | Florida Council of Presidents | Florida State College at Jacksonville | The Greenlining Institute | The Institute for College Access & Success and its Project on Student Debt | National Consumer Law Center (on behalf of its low-income clients) | Neighborhood Economic Development Advocacy Project (NEDAP) | Public Advocates Inc. | Rainbow PUSH Coalition | U.S. PIRG | United States Student Association | Young Invincibles

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