But advocates for students say the regulations are not going far enough.
Some of the people who might be affected are ones that want a "leg up," like the programs claim to give — including veterans and single moms, said Jennifer Wang, spokeswoman for Young Invincibles, an advocacy group for students.
“We know what ends up happening at programs that are underperforming is that young people take out all of this debt and then attend a program that really doesn’t offer them the skills or training that they were promised and isn’t respected in the job market or by employers,” she said.
But Wang said she was hoping the Department of Education would go further, because some of the metrics the department set can be manipulated by programs. She said some institutions will tell their students to forbear their loans rather than default on them, lowering the percentage of students who default on loans.
“That doesn’t really solve the problem of the loan. It prevents default but doesn’t take care of the loan," she said. "We’ve heard that tactic is something that particularly bad actors will use to get their default rates down."
If programs fail the metrics outlined for three years, the program would be ineligible for Title IV funding. A program could also be put in a zone between passing and failing. These programs would be required to give debt warnings to students but would not lose funding.
According to a report published by BMO Capital Market, 16 percent of higher education programs in 2012 would be classified as failing.
“The regulation contains a number of arbitrary metrics," said Noah Black, spokesman for the Association of Private Sector Colleges and Universities. "By eliminating access to federal financial aid based on early year earnings, the department will make it difficult for students seeking a credential in a field with a lower starting salary to obtain federal financial aid and ultimately limit access to education with a career focus."
UNC would not be affected if the regulations are approved, said Shirley Ort, associate provost and director of scholarships and student aid at UNC-CH.
But Black said these regulations should also be applied to public institutions like UNC.
The public will have 60 days to comment on the regulations. The department will take all comments into consideration and then publish its official policy, but there is no deadline for when that policy will be published, Glickman said.
Wang said it is important that students and their families tell their stories and give feedback about attending underperforming programs so that policymakers can design effective regulations.
"It's important to get at the point that it's taxpayer dollars, in addition to the pain and debt of students and families, it's really tax dollars," she said. "We want to open doors, not close them."