U.S. Department of Education Proposal to ‘Hold Colleges and Universities Accountable’

The United States Department of Education’s proposal aims to address student loan debt that totals nearly $1.7 trillion.

On April 17, the department said in a press release, “If the typical graduate of an undergraduate program does not earn as much as a high school graduate, the program will no longer be eligible for federal student loans.”

The Department of Education did not respond to messages seeking comment. 

“The reason for this is that there has been a handful of for-profit institutions that got a lot of money from students, granting them degrees that basically had little value,” said James Powers, senior director of financial services and operations in enrollment management.

“Many of those institutions no longer exist.”

According to the Federal Reserve, the probability of obtaining a loan is higher for individuals with a bachelor’s or graduate degree. 54% of individuals with a graduate degree borrowed a loan for their education. 

Powers said the department will be using IRS data to measure income. However, he said he has not seen specific numbers detailing what comprises the minimum.

He said losing loans would be devastating due to how heavily graduate students rely on them. Additionally, there would be a loss in enrollment if a program can no longer receive loans, he said.

To view the full Notice of Proposed Rulemaking, visit the Federal Register for more information.