Gainful Employment Update; Our Take on the Administration’s Proposed College Ratings System; Other News

Coalition Calls on Administration to Issue Strong Gainful Employment Rule
Our take on the Administration's Proposed College Ratings System
Bipartisan Bill to Improve Net Price Calculators
CFPB Keeps Focus on Students 
CA Budget Proposal Includes Narrow but Important Cal Grant Fix
Thank You for Giving!

Coalition Calls on Administration to Issue Strong Gainful Employment Rule 

More than 50 organizations that advocate for students, consumers, veterans, service members, college access, and civil rights sent a letter to President Obama last week, urging the Administration to promptly issue a strong "gainful employment" rule to protect students and taxpayers from predatory career education programs. The rule would enforce a federal law requiring career education programs — at public, nonprofit, and for-profit colleges — to prepare students for gainful employment in a recognized occupation in order for the programs to receive federal student aid.

The Department of Education is drafting regulations after a negotiated rulemaking panel failed to reach consensus in December. As the letter points out, for-profit college industry representatives won major concessions during negotiations. Yet, not even the industry negotiators voted for the dramatically weakened proposal. Rep. Elijah Cummings attended the December negotiating session in person to underscore congressional support for a strong rule. Rep. Mark Takano of California, Rep. Cummings, and more than 30 other representatives wrote Secretary Duncan in December to express their support for the Department's efforts to develop a new regulation. They wrote that "more than ever, we need a rule that ends federal financial aid for programs that consistently leave students — our veterans, working parents, and other Americans struggling to build new lives — without decent incomes and with insurmountable debt."

Read the coalition letter to President Obama
Read the letter sent by Rep. Takano and 33 other House members.

Our Take on the Administration's Proposed College Ratings System

We recently submitted public comments to the Education Department on President Obama's proposed college ratings system, with five main recommendations:

  • Focus first on designing a system for consumers only rather than attempting to design one system that meets the needs of both consumers and policymakers.

  • Apply the ratings system to institutions that primarily grant bachelor's degrees before expanding it to other types of institutions.

  • Rate colleges separately on several key dimensions, including affordability, success, and student support, rather than providing just one overall rating for each college.

  • Recognize institutions that serve a disproportionate number of low-income students well without adjusting results by institutional or student characteristics

  • Allow users to select comparisons groups but always provide national context so it is clear if there is a large gap between the selected group and colleges nationally.

Read the full comments

Bipartisan Bill to Improve Net Price Calculators

U.S. Reps. Elijah Cummings (D-MD), Darrell Issa (R-CA), and Rubén Hinojosa (D-TX) introduced legislation in December to make net price calculators more useful and accessible for students and families. Net price calculators have been required on almost all college web sites since 2011, but our research has found that many of them are difficult to find, use, and compare.

We strongly support the bipartisan Net Price Calculator Improvement Act (HR 3694), which reflects many of our recommendations for making these online tools more consumer friendly. It builds on existing Department of Education guidance on where the calculators should be located on college web sites, how they incorporate military and veteran benefits, and what results they must provide. The bill also better protects the privacy of students' information, and authorizes the Department to make it much easier to get net price estimates from multiple colleges.

Read the statement from the bill sponsors
For more information about net price calculators, visit our resource page

CFPB Keeps Focus on Students

The Consumer Financial Protection Bureau (CFPB) continues to focus on protecting students from unfair, deceptive, and abusive practices. The agency issued a rule in December that allows it to supervise the largest nonbank student loan servicers.  The covered servicers have more than 49 million borrower accounts, which represent 70 percent of the nonbank servicing market.  The final rule is consistent with two of our recommendations and will bring much-needed increased oversight of the student loan servicing market. This month the CFPB published new findings about how student loan servicers process payments and handle borrowers' attempts to direct payments to particular loans or to pay down principal. The CFPB also created a sample letter to help borrowers request that any overpayments go towards their highest interest loan.

In another matter, the agency called on financial institutions to publicly disclose agreements with colleges and universities to market debit, prepaid, and other products to students. Lenders are currently only required to make such disclosures on credit cards. CFPB Director Richard Cordray noted that "students and their families should know if their school, whether well-intentioned or not, is being compensated to encourage students to use a specific account or card product." In conjunction with the statement, the Bureau released its annual report on college credit card agreements, which showed a 23 percent decline from 2011 to 2012.

CA Budget Proposal Includes Narrow but Important Cal Grant Fix

California Governor Jerry Brown unveiled his budget proposal in January, and it included one narrow but very important improvement to the state Cal Grant program, the largest need-based grant aid program in the nation. The proposal would allow students who lose their grants because their family income rises above Cal Grant thresholds to regain their grants should their income drop again. This modification is very similar to a bill introduced by Assembly Member Sharon Quirk-Silva last year (AB 1287), supported by TICAS and every statewide student group.

Read our blog post in support of the change

Thank You for Giving!

From all of us at TICAS, thanks so much to everyone who made a year-end donation to help support our work in 2014! We're incredibly grateful for your support as we fight to make financial aid work better for students and families and reduce the burden of student debt.