Gainful Employment Rule CTA
The business of for-profit career colleges is in jeopardy as the United States Department of Education has proposed new rules that would impact the ability of these schools to offer their students financial aid including loans and grants. These new rules are based on a debt to earnings ratio which gathers annual income of graduates from for-profit career schools and assesses loan payment debt. The rules are saying that the student loan debt should be no more than 20% of their discretionary income annually.
These new rules will affect massage, cosmetology and skincare schools by removing their ability to offer government student financial aid, which 80% of their students utilize. The issue is these types of careers are typically part time, self-employed and accounts for not just hourly pay but also percentage compensation and tips (which workers don’t always claim) so the debt to earnings ratio calculations simply don’t apply equitably to these professions.
Why should ISPA members care? If the Department of Education randomly – without appropriate data and input – imposes rules such as these, it will dramatically reduce the number of licensed massage therapists, estheticians, nail techs and hair stylists in the coming years which will be detrimental to all ISPA members – Spas, Vendors, Associations, Supply Chains, Consultants, etc.
The deadline to submit comment letters opposing these new rules is June 20. AACS has put together a simple script outlining how to submit a comment letter which you can access here.