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New Rules Limit Debt for College Graduates

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After years of debate over how to regulate career-training programs, the U.S. Department of Education last week issued "gainful employment" rules that will limit how much debt students can take on if colleges want to receive federal funding.

To qualify for federal student aid, a program must show that the estimated annual loan payment of a typical graduate does not exceed 20 percent of his or her discretionary income or 8 percent of total earnings.

The department projects about 1,400 programs serving 840,000 students won't meet the new benchmark. Nearly 99 percent of those programs are offered by for-profit schools. The regulations take effect July 1.

Vol. 34, Issue 11, Page 4

Published in Print: November 5, 2014, as New Rules Limit Debt for College Graduates
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