Two bachelorβs degree programs at a for-profit Tucson university have received failing grades from the federal government because graduates didnβt earn enough to repay their student loans without hardship.
The graphic design and interior design programs at Southwest University of Visual Arts, 2525 N. Country Club Road, did not meet the governmentβs new βgainful employmentβ standards, federal data show.
The rules, which took effect Jan. 1, take aim at career training that leaves graduates with high debt levels compared to their earning power.
βThe regulations are intended to protect students and taxpayers by providing warnings about programs with relatively high loan debt compared to the earnings their students could hope to achieve after graduating,β lawyers for the U.S. Education Department said in a recent court filing.
For a program to pass muster, the student loan payments of a typical graduate cannot exceed 8 percent of total earnings or 20 percent of discretionary income.
At Southwest β which charges $23,000 a year for tuition and fees β a graphic design graduate had median annual earnings of $29,393 after four years of schooling, while interior design graduates had median earnings of $32,046, the data show.
About 140 students in various programs attended Southwest last school year, and nearly 60 percent took out federal student loans, government data show.
Southwest officials could not be reached for comment. The Arizona Daily Star left a phone message with a receptionist Thursday but no one responded by Friday.
A cosmetology program at privately-owned Arizona Academy of Beauty, 5631 E. Speedway, also failed the new standards.
The academy charges $14,500 for its 54-week cosmetology program, and according to federal data, its graduates earn $8,977 a year. The school had a total of 33 students in all programs last school year, the data show.
Carey White, owner of the beauty school, said the annual earnings figure for graduates is artificially low because it only counts income reported to the Internal Revenue Service.
Cosmetologists typically derive much of their income from tips, which they often donβt report for tax purposes, she said.
The Scottsdale-based American Association of Cosmetology Schools made the same argument in a February lawsuit against U.S. Education Secretary Betsy DeVos that seeks to block the new rules.
Education Department lawyers are fighting back in court β to the surprise of some higher education experts who expected the Trump administration to side with the for-profit education industry on the issue.
βThe public interest is served by allowing the (education) department to go forward with implementing the (gainful employment) regulations,β attorneys representing DeVos said in a court filing.
Programs that repeatedly fail the new standards would become ineligible for federal student aid.
