Education Dept. to Repeal 'Gainful' Rules

The Department of Education plans to repeal the Obama administration’s gainful employment rule, it announced Friday.

The rule sought to hold all career education and certificate programs -- the vast majority at for-profit institutions -- accountable for producing graduates with debt they couldn’t repay. Programs that repeatedly failed the metrics risked losing access to federal student aid.

The rule was contested heavily by the for-profit college sector but eventually went into effect in 2014. Education Secretary Betsy DeVos said she would suspend the rule last year though pending the outcome of a negotiated rule-making process, which finished earlier this year without producing a new regulation.

In place of the rule, the department plans to expand program-level outcomes data available from the College Scorecard but without any measures that punish those programs with poor outcomes. More program level data has long been a goal of advocates for higher ed transparency but will do nothing to placate advocates of more accountability for poor performing programs.

The department argues in an unofficial notice of proposed rule-making document that research results undermine the use of debt-to-earnings rates for graduates to determine programs' eligibility for federal student aid. And the department notice says public disclosure requirements for institutions were more burdensome than anticipated. 

The department will have to seek public comment on the proposed repeal after its publication in The Federal Register.

The for-profit college sector had long called for the same rule for all higher ed programs. But Congress would have to rewrite current law to apply such a provision uniformly. The proposal accomplishes that by applying the same transparency measure to all programs.

A tenth of all programs assessed under the gainful employment rule in 2017 failed the federal standards. Of those, 98 percent were at for-profit institutions.