Gainful Employment

On July 1, 2015, the U.S. Department of Education’s controversial Gainful Employment Rule took effect. While our membership has always agreed with its stated aim – to ensure that students enrolled in certain higher education programs receive a quality education that adequately prepares them for gainful employment – we have questioned the relevance of the metrics the regulation relies on to assess program value, arguing that they are unrealistic and politically biased.

As the two attached four-minute videos succinctly explain, the way in which the Gainful Employment Rule metrics were designed doesn’t really distinguish between poor- and strong-performing programs by measures that you would expect. For example:  There’s a well-respected, highly competitive fine arts college in New York City that happens to be a for-profit. It has a high graduation rate (66%) and a low student loan default rate (7%), which are undeniably exemplary outcomes. However, because its graduates pursue creative and fine art careers that simply do not pay a lot in the first few years after graduation, its programs won’t pass the regulation. The metrics don’t consider student outcomes; they focus solely on loan metrics. So, although nearly every fine arts program in the country would fail the GE Rule, only for-profit college programs will fail and be shut down because they are the only institutions subject to the GE Rule.

Quality programs with strong academics, exceptional graduation rates, and enviable job placement outcomes should not face closure. After watching these videos, we hope we can count on you to support our efforts to persuade the Department of Education to reassess its approach. Proprietary colleges doing right by their students must have the opportunity to make program adjustments to meet the new Gainful Employment loan metric mandates.