The United States Department of Education (ED) has finalized negotiations on a new college accountability framework that ties federal aid eligibility closer to student earnings outcomes. Released Jan. 9, the proposal would evaluate all postsecondary programs using earnings-based thresholds that would determine whether programs are financially harmful for students. The colleges that consistently fail to meet student outcome standards would have access to the federal direct loans program revoked, and programs that heavily underperform would be at risk of having Pell Grant funding revoked. The goal of this new framework is an attempt to reduce student debt and make sure colleges are held accountable for weak returns on investment for students.
This new college framework will bring an update to the Gainful Employment rules by removing the current debt-to-earnings test, which evaluates whether a college program leaves students with excessive debt compared to their earnings after graduation. In its place, a more unified earnings-based test would be implemented, which evaluates a program exclusively on the earnings of students after they graduate from this program. Programs that fail to meet these earnings thresholds may cause their affiliated colleges to lose access to federal Direct Loans. This adds pressure to colleges, which could force the redesigning or cutting of programs in order to improve student education and reduce post-college debt. “After more than 15 years of regulatory uncertainty under the previous three administrators, we’ve developed an accountability framework that institutions can work with, students will benefit from, and taxpayers can rightfully expect to improve outcomes,” stated Under Secretary of Education Nicholas Kent.
With this updated framework, the WorkForce Pell Grant program would continue on its path to being updated in how it is implemented and applied to students. This program would expand affordability options for students who desire a faster path into the workforce from college. If shorter-term, more workplace-oriented training becomes eligible for the Pell program, this would allow students to pursue and obtain college certifications while reducing the amount of currently associated debt. Providing a more affordable and realistic path to a college certificate would allow students with different needs the opportunity to pursue their education, including students currently working while taking classes, students wanting to switch their career who are already in college, and students who are unable to pursue a traditional four-year degree.
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