A new set of regulations proposed Friday by the Obama administration will measure whether thousands of individual career-prep programs in areas like business administration, culinary arts, and graphic design are adequately preparing their students for “gainful employment.”
The regulations will judge programs by the ratio of student debt to average earnings and the rate at which students default on loans. Degree programs that fail to meet the administration’s new requirements, which would go into effect in 2016, will lose access to federal loan and grant money — essentially forcing the programs to shut down, since they rely almost exclusively on federal student aid.
At for-profit colleges such as the University of Phoenix, DeVry, and Everest College, students are far more likely to be enrolled in low-performing programs. Department of Education estimates found that 20 percent of eligible programs at for-profit universities would fail, and another 11% would be “in the zone,” or at risk for failing.
Some areas of study were much more likely to have low-performing programs. Almost a quarter of massage therapy certificate programs at for-profit universities, for example, would be labeled low-performing. The average loan default rate of students in massage therapy programs is 22%; students earn $16,000 annually but must make loan payments of almost $1,000.
2. Percentage of programs in popular vocational studies areas that would be deemed failing or at-risk under the proposed new federal guidelines:
3. Cosmetology: 28%
Despite being one of the most popular certificate programs at for-profit universities nationwide, 28% of cosmetology programs could be labeled failing. The average default rate for cosmetology certificate students at for-profit universities is 17%.
5. Business Administration: 42%
Forty-two percent of business administration associate degree programs at for-profits are low-performing. Students enrolled have default rates of 28%, and though they earn $27,000 on average, they have annual loan payments of $1,700.
6. Medical/Clinical Assistant: 48%
Forty-eight percent of medical and clinical assistant associate degree programs at for-profit universities would be labeled failing or at-risk. That’s more than 50,000 students. A quarter of students in the programs default on their student loans. They earn $15,000 a year on average, with annual loan payments exceeding $1,000.
8. Criminal Justice: 66%
Two-thirds of associate degree programs in criminal justice or “safety studies” at for-profit universities are in danger of shutting down under the new regulations. A quarter of students default on their student loans, and with average salaries of $33,000, their annual loan payments top $,2800.
10. Legal assistant/paralegal: 63%
Students studying to become paralegals have some of the highest annual loan payments of for-profit students: more than $2,200, despite annual earnings of less than $23,000. Forty percent of for-profit paralegal programs are underperforming.
Bachelor’s degree programs in interior design are at a high risk of being labeled as underperforming — almost three quarters of programs at for-profits would be failing or close to failing.
13. Culinary Arts/Chef Training: 89%
Almost 90 percent of culinary arts programs at for-profit universities are either failing or “in the zone.” Failing and at-risk culinary arts programs enroll almost 25,000 students.