Education Department Signals Possible Changes to Gainful-Employment Rule

In documents released this week ahead of a negotiated rulemaking session on the gainful employment rule, the Department of Education signaled potential limits to Obama era regulation that went into effect last year.

The gainful employment regulation was written to weed out poor-performing career education programs that produce too many graduates with debt they can't repay. To hold programs accountable, it ties access to federal student aid funds to performance on a debt-to-earnings metric.

For-profit colleges sued twice to block the rule, but it went into effect last year and the first set of full data for career programs subject to the rule was released in January. However, Education Secretary Betsy DeVos said in June that she would appoint a rulemaking panel to overhaul the rule, taking account of many of the complaints from colleges. 

Materials provided to negotiators ahead of the first rulemaking session next week signal an interest in applying the regulation in whole or in part to all higher ed programs. That fits the priorities of for-profit groups like Career Education Colleges and Universities. It also wouldn't be possible under current law without making gainful employment simply a transparency measure by removing accountability measures -- another question raised by the materials for negotiators.

Virginia Foxx, the Republican chair of the House Education and the Workforce committee, is a longtime critic of the rule. Legislation expected from her committee this week would prohibit future action on the gainful employment rule by the department, according to reporting by the Wall Street Journal. The legislation, a reauthorization of the Higher Education Act, will instead propose a new tool tracking program-level data on completion, earnings, and average debt, the Journal reported.