NORTH BAY -- A provision put forward by the Federal Department of Education and slated to go into effect in 2011 is alarming career colleges with the possibility that government-backed student loans will be unavailable for certain programs.
Called “Gainful Employment” and just past its Negotiated Rulemaking Public Comment (NRPC) period, the provision attempts to address students coming out of accredited educational training programs with heavy debt and no immediate way to pay it down through employment opportunities available to them.
The University of Phoenix, with 500,000 students and learning centers in San Francisco and Novato, is the largest for-profit school in the country and has been the target of critics who say students are being unfairly burdened with debt.
For-profit school enrollment has surged during the past few years as unemployed people retrain themselves for new work or obtain a degree while waiting for the economy to rebound.
“Gainful Employment” would determine whether students can receive loans for educational programs by measuring the percentage of debt they can pay down immediately upon leaving the program and entering the job market.