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Department of Education: Gainful Employment

In October 2015, the U.S. Department of Education enacted regulations called Gainful Employment (GE). If this legislation remains in place, it will cause approximately 40% of U.S. cosmetology programs to lose Title IV funding programs that help many students achieve their goals of becoming licensed professional stylists. The first set of draft rates have been provided to schools, and final rates are due in January 2017. At that time, schools that fail the metrics will have one year to come into compliance or lose all Title IV programs for their cosmetology students. As we know, there is a high demand for licensed professionals in the salon and spa industry. If GE remains in place, it will create an even greater shortage for one of the fastest growing industries in the U.S. 

As an industry, we need your help to support not only Paul Mitchell Schools but also our future licensed stylists, barbers, and industry professionals by taking action to stop Gainful Employment now!

ACTION STEPS:

  • Schools are required to verify their graduates' employment for their accrediting agencies. Under the Gainful Employment regulations, schools must also track actual wages to demonstrate that graduates can pay back their student loans and support themselves. Please reach out to your local Paul Mitchell School to see how you can help them obtain this critical information for GE.
  • To demonstrate compliance with the Gainful Employment metrics, schools must demonstrate that their graduates earn enough to be considered gainfully employed. As an industry, that means salons and spas must make sure their employees accurately report all wage and tip income to the IRS. Paul Mitchell Schools teach financial literacy and the importance of reporting all income properly; however, we need your help in enforcing that concept because without it, cosmetology programs are likely to lose Title IV funding programs and in turn could close.
  • Please reach out to your congressional leaders today and tell them how Gainful Employment could adversely affect the cosmetology industry by forcing programs and schools to close and endangering the ability of salons to hire qualified licensed graduates.

If you'd like to learn more about Gainful Employment, please visit the U.S. Department of Education’s website at https://ifap.ed.gov/GainfulEmploymentInfo/indexV2.html

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