According to Department of Education data, large percentages of business administration, culinary arts, interior design, and other programs would be deemed failing or at-risk under the Obama administration’s new guidelines.
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.
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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%.