California Watch

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.

Ben Miller at the Quick and the Ed did a great, quick calculation to estimate how this would play out for a few specific career fields. Check out his blog post to see his methodology.

The maximum debt for an automotive service technician, for example, would be about $15,000, while the cap for a registered nursing student would be about $28,000.

It’ll be interesting to see how far this goes. The proposal is part of an ongoing effort to draft new rules to prevent abuses of federal financial aid funds.

According to Inside Higher Ed, the federally appointed panel of college officials, consumer advocates and others who are providing input on the rule-making found the debt proposal less “objectionable” than another idea that was discussed – tying tuition costs to graduates’ expected earnings.