Local For-Profit Schools: Three Programs Fail to Meet Gainful Employment Standards

Two bachelor’s degree programs at the for-profit Southwest University of Visual Arts in Tucson have been deemed non-compliant with federal “gainful employment” standards. This determination comes after federal analysis revealed that graduates struggle to repay their student loans without facing significant financial hardship.

The affected programs include graphic design and interior design, which failed to meet the government’s requirements aimed at ensuring that career training doesn’t leave graduates with untenable debt compared to their earning potential. The new regulations, implemented on January 1, are intended to safeguard both students and taxpayers by highlighting programs that lead to high debt levels.

To meet the standards, the student loan payments of a typical graduate must not surpass 8 percent of total earnings or 20 percent of discretionary income. However, graduates from Southwest University experienced median annual earnings of $29,393 in graphic design and $32,046 in interior design, while the institution charges approximately $23,000 per year in tuition and fees.

Last academic year, about 140 students were enrolled, with nearly 60 percent receiving federal student loans. Attempts to reach Southwest University officials for comments have been unsuccessful, with messages left unreturned.

Similarly, Arizona Academy of Beauty’s cosmetology program at 5631 E. Speedway also failed to comply with the new regulations. The academy, which offers a 54-week program for $14,500, reported that graduates earn a median annual salary of just $8,977. The total student population at the academy last year was 33.

Owner Carey White stated that these earnings figures may be misleading as they predominantly reflect reported income, ignoring tips that cosmetologists frequently receive and often do not declare for tax purposes. The Scottsdale-based American Association of Cosmetology Schools has made similar claims in a pending lawsuit against U.S. Education Secretary Betsy DeVos.

As the Education Department prepares to enforce these regulations, some higher education experts are surprised, as they anticipated the Trump administration would side with the for-profit education sector. Legal representatives assert that upholding the gainful employment regulations serves the public interest, proposing that programs failing the criteria repeatedly risk losing federal student aid.

Contact reporter Carol Ann Alaimo at 573-4138 or calaimo@tucson.com. Follow her on Twitter: @StarHigherEd.