Proposed Changes to Higher Education Policy in Congressional Republicans' Tax and Spending Bill Raise Concerns

Proposed changes to the tax and spending package in the U.S. House Republicans' bill could weaken protections for student borrowers, exacerbate the affordability crisis in higher education, and allow for-profit colleges to continue operating with minimal oversight, advocacy groups warn. The bill, now headed to the Senate, includes sweeping changes to education policy that would repeal the 90/10 rule governing for-profit schools, eliminate "gainful employment" as a goal for colleges receiving federal funds, and hinder consumer protections for borrowers defrauded or facing school closures.

Key Takeaways:

• The bill would repeal the 90/10 rule, which requires that at least 10% of the money for-profit institutions receive from non-federal sources, potentially allowing these institutions to rely heavily on federal funds to prop up their operations.
• The bill would strike the phrase "gainful employment" from the Higher Education Act, potentially setting the stage for the Education Department to rescind the Gainful Employment rule, which helps ensure that career education programs prepare students for gainful employment.
• The bill would repeal the 2022 versions of the Closed School Discharge and Borrower Defense to Repayment rules, reverting back to 2019 rules that made it more difficult for borrowers to receive relief.
• The proposed changes would weaken accountability for for-profit colleges and undermine the ability of the Education Department to hold these institutions accountable for preparing students for gainful employment.
• Student advocates and congressional Democrats have opposed the bill, emphasizing the impact of the proposed changes on higher education affordability and access as well as the weakening of protections for defrauded borrowers.
• Kyle Southern, associate vice president for higher education quality at the Institute for College Access & Success, stated that the bill would "put higher education further out of reach for low-income students, students of color, and many first-generation students."
• Carrie Wofford, president of Veterans Education Success, opposed the repeal of the 90/10 rule, saying it would "stop federal funds from being used to prop up otherwise failing college companies."
• Sarah Austin, a policy analyst at the National Association of Student Financial Aid Administrators, noted that striking the phrase "gainful employment" from the Higher Education Act could lead to the Education Department rescinding the Gainful Employment rule.

Statistics:

• The bill would potentially allow for-profit colleges to operate with minimal oversight, with the majority of their funding coming from federal sources.
• The Gainful Employment rule has been in place since 2014, with 1,600 programs across the country subject to review based on graduation rates, debt, and job placement rates.
• Under the proposed changes, borrowers would face more barriers in receiving relief from closed schools or institutions that defrauded them.
• The Institute for College Access & Success has reported that since 2019, over 50,000 students have graduated from programs that failed to meet the Gainful Employment rule's requirements.

Sources:

• "U.S. House Republicans Push Through Massive Tax and Spending Bill Slashing Medicaid"
• "What to Know About the U.S. House GOP's Student Loan Overhaul"
• "Say No to Cutting Post-9/11 GI Bill Benefits: Wasting $1.6 Billion"
• Institute for College Access & Success fact sheet on Gainful Employment
• National Association of Student Financial Aid Administrators statement on Gainful Employment rule
• Veterans Education Success letter to the Senate Committee on Health, Education, Labor, and Pensions opposing the repeal of the 90/10 rule