How New Rules for Online Colleges Benefit Students

By Celeste Stewart

The new government rules for online colleges are forcing colleges to prove that their programs result in gainful employment or risk losing federal financial aid. The “gainful employment” rule is designed to ensure that graduates of career colleges find good jobs and are ultimately able to pay off their tuition bills. While access to financial aid is crucial for many students, these new rules offer additional benefits. Though the rules don’t go into effect until July 2012, colleges have already begun to respond with programs designed to help students make informed choices.

What to Expect with the New Online College Regulations

Some of the advantages students can expect once the new rules are fully implemented include:

  1. Better information about the programs they’re considering
  2. Increased program quality
  3. Improved transparency and accountability
  4. More robust job placement programs

In fact, some benefits are already being felt by online students. For example, students of the University of Phoenix now have access to PhoenixConnect, a social network for students and over 600,000 Phoenix alumni who could potentially help with job searches.

Another program by this same for-profit college is a three-week, pass or fail orientation program designed to increase transparency and encourage students to make better decisions as to whether the college is the right one for them. This free program is required of all prospective students with 24 college credits or less. Students who don’t pass cannot continue with the college. Requiring students to demonstrate commitment and an understanding of the institution’s teaching methods can improve the overall quality of graduates, potentially improving employment rates as a result.

Assessing Online Degree Program Quality

The new rules require upfront disclosures detailing total program costs, student loan repayment rates, graduates’ debt-to-earnings ratio and other information. In addition to these standard disclosures, if a school fails to meet a debt measure, this must be disclosed to students along with why it failed and how it will be addressed. Schools that fail to meet the debt measure three times in a four-year period will no longer be eligible to participate in federal student aid programs.

Prospective students will be better able to assess a college program’s quality based on these required measures and disclosures. For example, when evaluating two comparable programs and finding that one is successful at placing graduates in good jobs while another leaves graduates saddled with excessive student debt, which one is more attractive?

Few career colleges can afford to risk federal student aid eligibility. Under the new rules for online colleges, career colleges have two choices: fight the rules or improve quality. In the long run, whether the law goes into effect as currently written or not, schools that focus on the ultimate success of their students will be most likely to succeed.

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