This bill, called the Protecting Students from Worthless Degrees Act, adds new consumer protections for students and changes parts of the Higher Education Act. It defines terms and sets rules for programs that prepare students for jobs that require state licenses. Programs must ensure that completing the program lets a student take required licensure exams and meet academic prerequisites in the metropolitan area and States where the student lives or where the program is advertised. Schools must provide timely placements for clinicals, internships, or apprenticeships needed for licensure.
The bill creates a new debt-to-earnings test (section 498C) for ‘‘gainful employment’’ programs. It defines how to calculate median loan debt, annual loan payments, median earnings, discretionary earnings, cohort periods, and interest and amortization rules for different credential levels. A program fails the standards if, for 2 of any 3 consecutive years, the cohort has a discretionary debt-to-earnings rate of at least 20% and an annual debt-to-earnings rate of at least 8%.
Federal agencies (including IRS and SSA) must match earnings data with Education Department data each year. The Secretary of Education must calculate and publish the rates, notify institutions of results, require warnings to enrolled and prospective students when a program fails or risks failure, and enforce consequences for failing programs. Consequences include blocking Title IV federal student aid disbursements for failed programs and preventing reestablishing eligibility for at least 3 years. The bill requires equal treatment of all professions, including tipped professions, and requires the Secretary to issue regulations within one year.
The bill also updates institutional participation rules. Institutions must certify that their gainful employment programs meet the new standards and are not substantially similar to recently failed or discontinued programs. It extends earnings-outcomes requirements to undergraduate certificate or diploma programs. For distance education, the bill requires institutions to be legally authorized in each State where their enrolled students live, though State reciprocity agreements can apply if they include complaint and enforcement processes.
No publicly available information.
The bill is presented "to provide consumer protections for students." Supporters describe measures that require programs to show they prepare students for licensure and meet debt-to-earnings standards, and require institutions to certify compliance and warn students. The bill also aims to protect federal funds by denying aid to programs that repeatedly fail earnings and debt tests.
No publicly available information.