Gainful Employment Failures Cluster in 10 States

September 28, 2017

An analysis from Third Way finds a high concentration of graduates who attended programs that failed the gainful-employment rule in just a handful of states.

The Obama administration crafted the gainful-employment rule to hold career education programs accountable based on graduates' ability to pay off their student loan debt. Nearly one in 10 of the programs assessed under the rule failed to meet passing criteria, according to data released by the U.S. Department of Education in January.

Third Way found that three-quarters of graduates who attended failing programs were concentrated in 10 states. And six states -- Alabama, Idaho, Indiana, Missouri, Nebraska and Oregon -- had a significantly higher proportion of graduates attending failing programs than the national average, the group found. Third Way argues the large variation in outcome by states is evidence that strong national standards are needed for higher education programs.

After announcing in June that she would pursue a regulatory overhaul of the gainful-employment rule, Education Secretary Betsy DeVos has taken multiple steps to weaken or delay existing gainful-employment regulations.

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