Could a Gainful-Employment Rule Have Helped Corinthian’s Students?

With the fate of Corinthian Colleges Inc.'s 75,000-plus students now up in the air, a student-advocacy group says that many of them could have been protected from the coming upheaval if a strong “gainful employment” rule had been in effect.

The Institute for College Access and Success had previously identified 114 career-focused programs where more students default on their loans than graduate. This week, in a seize-the-moment move, the organization noted that 25 of those 114 were part of institutions owned by Corinthian.

“These programs are shockingly bad,” said Pauline Abernathy, vice president of the advocacy group, known as Ticas, in a blog post. Some of the company’s programs, she said, had three times as many defaulters as graduates.

As proposed, a gainful-employment rule would cut off federal student aid to programs with high default rates and where levels of student debt are high relative to graduates’ income. Ticas is among 50 organizations, plus several U.S. senators, urging the Education Department to strengthen the latest proposed version of the rule, which is due to be finalized in the fall.

“If a rule with the changes we called for had already been in effect, Corinthian would long ago have had to rapidly improve or close programs in a way that better protected students and taxpayers,” Ms. Abernathy wrote.

Corinthian officials, who were in the final throes of negotiation with the department on Wednesday afternoon, declined to comment.