The U.S. Department of Education has asked a federal court to modify part of a recent decision that struck key provisions of the department’s “gainful employment“ regulations. In a motion filed yesterday, the department argued that the court should reinstate the requirement that institutions report information about their students’ loan-repayment rates and debt-to-income ratios.
The gainful employment rule was designed to ensure that federal student-aid dollars flow to programs are good investments–that is, programs that are helping prepare students for jobs that pay well. While the court ruled that the department had the authority to compel vocational programs to disclose their debt-repayment rates and debt-to-income ratios, it said that the department’s threshold for declaring a program failing–a determination that eventually couldl ead to the loss of federal aid—was arbitrary and capricious. The department’s benchmark required that at least 35% of a program’s graduates be actively repaying their student loans to pass the metric.