Gainful Employment Will Put Many Schools Out of Business – Know Your Odds

The new Gainful Employment Regulation will put about 1/3 of private for profit schools out of business,  including cosmetology schools.  The regulation has passed and is in the books.  Each school has supplied data for their graduates who have borrowed loans (federal and private) to finance their education from 2008 – 2013.  The data from 2013-2014 education year will be due Oct 4, 2015.

In summary, the federal government will take a look at the 2014 actual earning, as reported on your student’s income tax returns, for students who attended your school from 2010-2011 and 2011-2012 school years.  The median annual loan repayment cannot be more than 8% of the median gross earnings reported to the IRS by your students.  If so, you fail to meet the gainful employment regulations.

If you want to project whether or not your school will pass follow the guidance given at this link:

http://www.thompsoncoburn.com/news-and-information/regucation/blog/14-12-16/new-desk-guide-how-to-project-gainful-employment-rates.aspx

One of the most important things we can do is lower our required hours to reduce the cost of our programs to the students according to Thompson Coburn

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