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New rules hope to make universities more accountable for getting students jobs
In a battle of two culinary schools, the rules single out for-profits but ignore worse outcomes at a local community college. - photo by Eric Schulzke
Tough new federal rules regulating for-profit colleges apply a double standard when they ignore community colleges, argues an administrator at a New York City-based career college.

The "gainful employment" rules developed by the U.S. Department of Education in 2009 were held up by lawsuits until they finally went into effect this past summer.

Under the new rules, "a program would be considered to lead to gainful employment if the estimated annual loan payment of a typical graduate does not exceed 20 percent of his or her discretionary income or 8 percent of his or her total earnings," the Department of Education states on its website.

The rules were held up by a pair of lawsuits filed by trade associations representing for-profit colleges, which had argued all along that the rules should apply equally to nonprofits as well.

It wasn't until June that the second of these suits was dismissed by a federal judge, paving the way for the rules to take effect.

Its a resounding win for the Department of Education, said Maura Dundon, senior policy counsel at the Center for Responsible Lending, to Inside Higher Ed at the time. Its a very strong review of both the departments authority to regulate for-profit colleges the way it has using the statutory hook of gainful employment to create debt metrics as well as the way the department developed the metrics.

In a column posted by the Pope Center for Higher Education, Marc Jerome, an executive vice president at Monroe College, points to Monroe's award-winning culinary program as a potential victim of the new double standard, comparing his school's program with a competing culinary program at a local community college that is exempt from the gainful-employment rule.

Jerome does not contest the substance of the rule at all, focusing only on the double standard of its application. This, he argues, leads to perverse results when a competing program at a community college that produces significantly inferior results gets a pass.

"Looking broadly across all programs at the two colleges," Jerome argues, "Monroe has a 53 percent graduation rate, compared to 11 percent at the nonprofit college. We also have a 5.7 percent student loan default rate, versus 17 percent at the nonprofit college. Yet, if our program fails under GE (gainful employment), we would be required to post a warning notice to prospective students that, among other things, directs them to information on competing programs like the one where the outcomes clearly trail Monroes."

"Here's the irony," Jerome concludes. "As the Department's College Scorecard itself shows, the typical student at that college will finish the program with nearly $5,000 more in student debt and can expect to make less salary than those who went to Monroe's program can."
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