Blog Post
January 22, 2010
A new rule proposed this week by the U.S. Department of Education aims to make sure students who go to vocational schools take on only as much debt as they can reasonably afford considering their earnings after graduation, Inside Higher Ed reports.
The rule takes aim at some for-profit schools that take advantage of students by charging high prices for low results:
The result of implementing a debt-to-income limit could be to weed out (or at least cut tuition at) vocational programs and institutions that don't yield their recent graduates in-field jobs that pay well enough for them to repay their student loan debt on a 10-year schedule.
Under this proposed rule, the average debt repayment for a program's graduates could be no more than 8 percent of the expected earnings of someone working in the occupation that the program prepares students to enter.
Programs that don’t meet the 8 percent rule would risk losing their federal student aid funding.
