The U.S. Education Department said Friday it will take more time to finalize new regulations targeting for-profit college job-training programs, but emphasized it was intent on moving forward and holding the sector accountable.
For-profit colleges have campaigned hard against the “gainful employment” rule, which would cut off federal aid to college vocational programs with high student debt levels and poor loan repayment rates. They’ve lobbied Congress, purchased newspaper ads and helped students and others register complaints with the Education Department.
The government was to publish the final rule by Nov. 1, but department officials announced a new timeline Friday, saying sections of it would be ready by Nov. 1 and the remaining portions will be published in early 2011.
The department said it was taking more time to consider comments it received about 91,000 during a 90-day comment period, a record for a proposed higher education regulation and hold several meetings and public hearings in the coming weeks. The department said the schedule allows it to stick to its plan for the rules to go into effect around July 1, 2012.
“Let me be clear: We’re moving forward on gainful employment regulations,” Education Secretary Arne Duncan said in a statement. “While a majority of career colleges play a vital role in training our workforce to be globally competitive, some bad actors are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use.”
Duncan said additional feedback would help the department strike “the right balance” between holding the programs accountable to protect students and taxpayers and “making sure we keep whole those programs that are doing a good job.”
Shares of for-profit education companies, beaten down earlier this year, had moved higher in the past few weeks. Rumors of a delay in the gainful employment rule’s publication had raised investor hopes that the government was considering a softer approach, said Sterne Agee analyst Arvind Bhatia. Those investors were disappointed by the Education Department’s statement Friday, he said. Shares mostly turned lower or trimmed their gains after the announcement.
