A federal judge struck down the “gainful employment regulation” in an Obama administration education bill. This regulation was conceived to penalize for-profit colleges that cause graduates to pay for degrees which have low job prospects. Many of these college programs are career training programs that offer limited employment opportunities. Because these colleges offering such programs are for–profit, the same graduates often earn their degrees after incurring large debt.
The regulation required schools to meet three criteria:
Loan payments for the typical student could not exceed 12% of their earnings after graduation
Loan payments could not exceed 30% of their discretionary income,
35% of the school’s graduates must be repaying their loans after graduating.
These requirements of the regulation protected both students from high debt and taxpayers from delinquent student loan payments of federally subsidized loans.
The regulation was struck down because it singled out a specific sector of higher education.