Education Department seeks to ease new program approval process
Sept 28 (Reuters) - The U.S. Department of Education on Tuesday proposed to make approval procedure for new programs easier under the 'gainful employment' education rules, which was finalized last October, to make for-profit education companies more accountable for federal aid.
These set of rules, that go in effect from July 2013, were drafted after for-profit colleges were criticized for burdening students with unpayable debt but no jobs.
Under the current set of gainful employment rules, for-profit colleges are required to follow a stringent notification process to get approvals to introduce new programs.
The department's new proposal seeks to ease the process by limiting it to only those programs that are either same or similar to those that were discontinued or failed to comply with the gainful employment rules, according to a notice on Federal Register.
"While this change could make it easier for schools to introduce new programs, we believe current gainful employment rules will be in effect as the proposed change works its way through the rule-making process," BMO Capital analyst Jeff Silber said in a note.
The S&P education index was down slightly at $70.78 on Wednesday morning. Shares of industry leader Apollo Group were down at $42.15 on Nasdaq in morning trade.
(Reporting by Megha Mandavia in Bangalore; Editing by Supriya Kurane)