Career colleges are getting ready for Gainful Employment. As institutional and program effectiveness specialist Amanda Opperman describes, schools will soon be required to submit an avalanche of student data for the years 2008 to 2015.1 But this is just preliminary to the larger task of achieving compliance with minimum requirements for student loan repayment rates and debt-to-income ratios. Facing this challenge will require implementing effective strategies to ensure that institutional performance is in compliance with Gainful Employment standards.

Optimizing the Enrollment Pipeline

Financial aid expert Mark Kantrowitz divides strategies for achieving Gainful Employment compliance into three main categories.2 The first involves enhancing student enrollment pipelines to increase the odds that students are predisposed to complete graduation.

To begin implementing this, colleges should identify predictors of graduation completion, post-graduation employment, and debt repayment. These can then be used to identify at-risk students and take appropriate measures. For instance, single parents have higher drop-out and loan default rates and can be offered opportunities for academic and career guidance, along with supportive services such as child care.

Prequalifying enrollees is another tactic. Colleges can review their minimum GPA and standardized test requirements or use their own tests, including emotional IQ tests measuring psychological disposition to complete college.

Colleges can also stop accepting ability-to-benefit tests and focus on recruiting graduates and GED students, who are more likely to graduate and repay loans than ATB applicants. Working with programs such as Penn Foster's online high school completion program can support outreach to students who are making the extra effort to finish high school.3 Other tactics include orientation programs; trial enrollments; reducing program length; proactive intervention with high-risk students; and reaching out to near-graduate drop-outs and extending incentives to finish.

Reducing Student Debt

Minimizing debt accumulation is a second strategy. The Gainful Employment guidelines give colleges the option of capping student debt based on institutional costs, but institutions can take additional measures.

Statistics show Pell Grant recipients, private student loan borrowers, and Parent PLUS loan recipients are heavier borrows. Steering these students towards counseling may deter debt. For students who need to borrow, promoting Parent PLUS and Stafford loan options instead of private loans will help Gainful Employment debt-to-income ratios.

Part-time students are bigger borrowers and should be provided with more active counseling. Raising debt awareness in aid award letters and follow-up communication can discourage debt. Other strategies include financial literacy orientation, tuition reduction - particularly for low-income students, substituting gift aid, installment plans, and savings plans for loans, increasing FAFSA completion rate, offering loan assistance repayment programs that meet Gainful Employment restrictions, requiring signed loan repayment pledges, requiring students seeking increased aid to submit a budget and document expenses above minimal cost of attendance, and encouraging student part-time employment and employer-paid tuition.

Increasing Graduate Income

A third strategy is increasing the income of alumni. Due to the way Gainful Employment calculates debt-to-income ratio, efforts here will be most effective when concentrated on students with greatest potential for greatest increase in income level, regardless of debt.

One method that can be used is offering graduates free or low-cost programs to increase their marketability to employers, such as certification programs. Career counseling and job placement services can provide further assistance. Working with local employers and gearing programs towards their needs can also help increase student marketability and income.

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Resources: Photo Credit (1) Hope for the Best, Prepare for the Worst, (2) Strategies for Complying with Gainful Employment by Reducing Debt and Improving College Completion Rates (3) Program Overview: High School Diploma Online