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The Education Department will hold another session of negotiated rule making on key rules to govern student aid and other programs this week. Education advocates are expected to talk at length about gainful employment, a rule designed to assure that for-profit colleges and nondegree programs at public and private colleges prepare students for “gainful employment in a recognized occupation.”

But it’s unclear a resolution on that issue—or most others—will be reached. The rules that govern negotiated rule making require a consensus among members. “Consensus means that there is no dissent by any member of the negotiating committee. Thus, no member can be outvoted,” says a memo on the rules governing the process.

If the process doesn’t yield a consensus, the Education Department can simply propose regulations the old-fashioned way. And most expect the department to do so, but that will be after the negotiating sessions.

Gainful Employment

Gainful employment has been the subject of intense debate for more than a decade. The Education Department first proposed rules on the subject in 2011. The rules were based in part on the debt that graduates incurred in attending the program relative to the earnings they received after completion. Programs that were costly and for which students borrowed a lot to pay tuition but generally failed to earn much after completing were punished by eventually losing eligibility for receiving federal student aid payments. For-profit higher education representatives criticized the rules as being too complicated, among other things. The regulation was reissued in 2014 following a court challenge to the original rules, based on a similar debt-to-earnings structure for gainful-employment programs.

When the data were first released in January 2017, over 800 programs, collectively enrolling hundreds of thousands of students, did not meet the department’s standards.

In 2019, the Education Department (during the Trump administration) rescinded the 2014 rule nearly in its entirety.

The Education Department issued a proposed starting point on most of the issues the negotiators will be discussing this week, but not for gainful employment.

The department issued only some “discussion questions,” such as “What metric(s), and what threshold(s) (pass/fail cutoff points) in those metric(s), best distinguish between programs that prepare students for gainful employment versus those that do not, including at different credential levels? For instance, we seek feedback on the use of repayment rates; debt-to-earnings rates; earnings thresholds; and other measures.” And “What are the benefits of allowing institutions multiple consecutive years of failing a metric based on post-college earnings? What are the risks of allowing multiple consecutive years?”

What the Advocates Are Saying

In advance of the sessions this week, a coalition of organizations favoring more regulation of for-profit colleges held a press conference and called for the Biden administration to restore gainful-employment rules.

Amanda Martinez, senior education policy analyst at UnidosUS, said the gainful-employment rules “really impact people.” She said for-profit colleges are frequently located in Black and Latinx communities, where they engage in “predatory recruiting practices.”

Amy Laitinen, director of higher education at New America, said it was important to remember that “the for-profits have fought gainful employment” every step of the way. “It’s very unlikely that we’ll have consensus on this.”

Nicholas Kent, senior vice president of policy and regulatory affairs at Career Education Colleges and Universities (the advocate for the for-profit sector), said in an interview that “many people feel that the current administration” has a “foregone conclusion” in favor of gainful employment.

He said his members would support gainful employment if the rules applied to every kind of college, even liberal arts colleges.

“We represent only 8 percent of students but are a disproportionate amount of the conversation,” he said.

One of the big questions about negotiated rule making for gainful employment concerns community college certificate programs.

David Baime, senior vice president for government relations at the American Association of Community Colleges, didn’t reveal his position, except to say that the issues are extremely important.

“The gainful-employment regulations impact every community college certificate program that is eligible for federal aid, and so it is difficult to overestimate the importance of these rules to campuses,” Baime said. “Most of the affected programs address critical current workforce needs in areas such as health care, cybersecurity, logistics and the construction trades.”

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