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What the New Gainful Employment Rule Means for College Students

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What the New Gainful Employment Rule Means for College Students

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  1. Education loan in India

  2. What the New Gainful Employment Rule Means for College Students • The gainful employment regulation requires vocational programs at for-profit higher education institutions and no degree programs at community colleges to meet minimum thresholds with respect to the debt-to-income rates of their graduates. • Programs that fail to meet these minimum requirements could lose access to all federal financial aid for a period, putting them at a higher risk of closing.

  3. Gainful Employment's Rocky Road • In 2009, the Department of Education began a negotiated rule-making session with the goal of strengthening federal aid program regulations to better serve students and families. Gainful employment was rooted in the concept that a school should experience consequences for the lack of success of its alumni. • The idea was to try and ensure that programs where students needed to take on debt to attend provided a robust enough education that these students could obtain employment with wages high enough to allow them to successfully repay that debt.

  4. How Gainful Employment Works​ The rule measures a program's graduates' debt-to-income as follows: • Programs whose graduates have annual loan payments less than 8 percent of total earnings or less than 20 percent of discretionary earnings are considered to have passed the requirements. • Programs whose graduates have annual loan payments between 8 percent and 12 percent of total earnings or between 20 percent and 30 percent of discretionary earnings are considered to be "in the warning zone" and at risk of failing the requirements.

  5. Programs whose graduates have annual loan payments greater than 12 percent of total earnings and greater than 30 percent of discretionary earnings have failed the requirements. • Programs that fail in two out of any three consecutive years or are in the zone for four consecutive years are no longer eligible for federal student aid for a minimum of three years.

  6. What This Means for Consumers • Students who attended a school that had to shut down because of gainful employment would be eligible for a discharge of their federal Education loan in India debt However, that's not really an ideal situation, both for the student and the taxpayer who ultimately pays when federal debt is forgiven. A much better turn of events is for students to go into these types of programs with eyes wide open. • Source : (http://bit.ly/1HetiOl)

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  8. Read more on Loan : http://www.avanse.com/avanse-education-loans/ • Thank You..!!!

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