New rule will cut federal money to college programs that leave grads with high debt, low pay

College programs that consistently leave graduates with low pay or unaffordable loans will lose access to federal money under a new rule being finalized by the Biden administration. The policy applies mostly to for-profit colleges, along with certificate programs at traditional universities.

The Education Department says it’s a step toward accountability for America’s higher education system. The rule, known as gainful employment, was proposed in May and revives an Obama-era policy dismantled by the Trump administration.

The department announced Wednesday that the final rule will be published Oct. 10.

“Higher education is supposed to be an invaluable investment in your future. There is nothing valuable about being ripped off or sold on a worthless degree,” Education Secretary Miguel Cardona said at a press briefing.

An association of for-profit colleges denounced the policy as an unfair attack, saying any policy should be applied evenly across all types of schools. The rule applies to all for-profit college programs, but not to bachelor’s degrees and most graduate programs at traditional colleges.

“Once again, the Department has rushed the process, overlooking critical issues, to hastily implement and weaponize a final Gainful Employment rule against for-profit institutions,” said Jason Altmire, president and CEO of Career Education Colleges and Universities.

The rule takes effect in July 2024, and the soonest any program could lose federal money is 2026.

The rule will put college programs through two tests to determine whether they’re helping students.