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June 27, 2012 12:20 PM The Gainful Employment List

By Daniel Luzer

Like fireworks to close out the for-profit college organization’s annual conference in Las Vegas, the Obama administration earlier this week released data about the colleges likely to encounter trouble due to the administration’s controversial Gainful Employment provisions.

The Gainful Employment rules, officially released a year ago, specify that in order to continue to receive federal funding America’s vocational schools must make sure that at least 35 percent of former students are paying down their loans, former students must not have to pay more than 30 percent of their discretionary income on loan payments, and former students must not spend more than 12 percent of their total income on loan payments. According to a piece in the New York Times:

The Department of Education… issued data on Tuesday showing that 5 percent of career-training programs — all of them at for-profit institutions — failed all three requirements of the department’s new gainful-employment regulations. Starting next fall, schools that fail all three tests for three of four consecutive years will lose their access to federal aid.

This will, however, not result in actual punishment. This was just for information. Libby Nelson at Inside Higher Ed has helpfully compiled a list of all institutions impacted by the rule limiting student debt.

Companies with the most programs failing in all three areas were Corinthian Colleges Inc., Career Education Corp. and Education Management Corp.

In response, the Wall Street Journal reports that,

Shares of Apollo, which operates the University of Phoenix, led the industry’s gains Tuesday to trade recently 9.5% higher at $35.54. DeVry Inc. (DV), Grand Canyon Education Inc. (LOPE) and Strayer Education Inc. (STRA) were also up sharply. Shares of Corinthian Colleges Inc. (COCO), however, badly lagged after the data showed elevated failure rates at its Everest and Heald schools.

Very few programs operated by either Apollo or DeVry appeared on the list of Gainful Employment problem schools.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer