The U.S. Department of Education has finalized terms of its “gainful employment” rule for higher education programs. If graduates owe too much relative to their income, or too few former students are paying back their tuition loans in a timely manner, school programs will lose access to Pell grants and federal student loans.
Such a loss would seriously crimp schools’ revenue and ability to attract new students.
To maintain access to federal loan dollars, schools must ensure that they meet at least one of the following criteria:
If a school fails all three measures, it must inform potential students.
If a school fails three times within four years, it loses access to federal student aid for at least three years.
Under the new rule, the soonest that a delinquent program would lose eligibility for federal student aid is 2015.
