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DeVos Issues Final Repeal of Gainful Employment

July 2, 2019
 
 

Education Secretary Betsy DeVos on Friday issued the final repeal of regulations crafted by the Obama administration to hold low-quality career education programs accountable.

The rule, known as gainful employment, was heavily criticized by the for-profit college sector and Republicans in Congress. In the first gainful-employment ratings released in 2017, 98 percent of programs that failed the standards were operated by for-profit institutions.

The Education Department estimated that repealing the rule would cost $6.2 billion over 10 years in payments for Pell Grants and student loans for programs that otherwise would have been cut off from federal aid.

Critics complained that gainful employment, which sought to penalize programs that produced too many graduates with unmanageable student debt, discriminated against programs based on their tax status. DeVos said overhauling the rule was one of her first priorities as secretary. Eventually she proposed repealing the rule entirely, but that process has been delayed by bureaucratic hurdles at the department.

DeVos was required to convene a negotiated rule-making panel, including industry representatives and consumer groups, which failed to produce a new rule. After she subsequently issued a proposal to rescind gainful employment entirely, the department received tens of thousands of public comments it had to review before final repeal. A Trump administration official subsequently said the department would fail to meet a deadline to repeal the rule last November. That meant the earliest the rule could be repealed is July 2020.

The Education Department has taken few steps to enforce the rule since 2017. And consumer groups and Democrats in Congress were quick to criticize the latest step by DeVos to roll back higher ed regulations. Representative Bobby Scott, the chairman of the House education committee, said in a statement that repealing rather than revising the regulations "will prop up low-quality for-profit colleges at the expense of students and taxpayers."

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