Protecting Students from Worthless Degrees Act

Key Points

• Colleges that receive federal student aid for licensed occupations, like nursing or cosmetology, must prove within a year that graduates can actually get licensed and take required exams in the state where they live, or lose funding for that program.
• A program fails the new debt-to-earnings test, and risks losing federal funding, if for two of three years its graduates' loan payments equal or exceed 8 percent of total income or 20 percent of income above the poverty line.
• Once a program is found to fail the standards, schools cannot keep giving out federal student aid to new students in that program.
• Schools cannot simply rename or relaunch a failed program to dodge the rules; they must wait three years after being cut off before trying to reestablish eligibility for the same or a substantially similar program.
• Online and correspondence schools must be legally authorized in every state where their students live, ensuring students can file complaints under their own state's consumer protection laws and that those complaints are made public.
• The bill blocks the Education Department from giving tipped professions, like bartending or cosmetology programs, any special delay or exemption from these accountability rules.