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In a bid to address crippling student debt and ensure a more accountable higher education system, the Biden administration has unveiled a new rule targeting college programs that leave graduates with significant debt and low earning prospects. This rule primarily affects for-profit colleges and certificate programs at traditional universities.

What You Need to Know:

The Basics: This new rule, known as “gainful employment,” is making a comeback after being dismantled during the Trump administration. It aims to evaluate and hold colleges accountable for the value they provide to students.

Accountability : The U.S. Department of Education sees this rule as a crucial step towards making colleges accountable for the quality of education they offer. Education Secretary Miguel Cardona emphasized that higher education should be a valuable investment, not a costly rip-off.

Who’s Affected : The rule mainly affects for-profit colleges and certificate programs at traditional universities. It doesn’t apply to bachelor’s degrees or most graduate programs.

Timing : The rule will take effect in July 2024, and any program that fails to meet the criteria could lose access to federal money as early as 2026.

The Tests : College programs will undergo two tests to determine their effectiveness. First, they will be assessed based on whether their graduates carry significant student debt compared to their earnings. Second, they’ll be checked to see if at least half of their graduates earn more than working adults in their state with only a high school diploma.

Protection for Students : Borrower advocates applaud this rule as a much-needed protection for students, ensuring they aren’t taken advantage of by predatory schools and programs.

Controversy : While the rule has received praise, some for-profit colleges argue that it unfairly penalizes institutions that enroll students who may face wage discrimination in the workforce, including women of color.

Impact on Beauty Schools : According to an Associated Press analysis, beauty school programs could be hit hard by this rule. Nearly two-thirds of cosmetology certificates could be at risk of losing federal funding, along with over a third of programs in massage therapy and dental support services.

Transparency : A separate part of the rule will provide students with a clearer understanding of the true cost of programs, including tuition, fees, and books, along with student debt levels and earnings after graduation.