On July 1, 2015, the U.S. Department of Education’s controversial Gainful Employment Rule took effect. While its stated aim is to ensure that students enrolled in certain higher education programs receive a quality education that adequately prepares them for gainful employment, many have questioned the relevance of the metrics the regulation relies on to assess program value, arguing that they are unrealistic and politically biased.
Despite how it has been positioned in the public’s eye, the Gainful Employment Rule will not detect poor performing programs. If it did, well-established academic outcomes, such as graduation rates would be the cornerstone of its metrics. Instead, it relies on untested and narrowly drawn financial measures, such as the correlation between graduate earnings in the first few years after graduation and an artificial “median” debt that provides a broad exemption for many programs at public institutions regardless of their academic performance. Programs that fail the Rule’s performance measurements will quickly lose access to federal student aid programs.
The Federal government’s crusade to regulate the proprietary education sector will result in the closure of predatory for-profit schools, and deservedly so. But it will also result in the collapse of degree-granting proprietary colleges that are producing strong outcomes but don’t “fit” the random yardsticks the government erroneously insists in using to assess program value. The number of students and veterans looking to move on to the next chapter in their lives who will be undeservedly displaced will figure in the hundreds of thousands — one study has suggested millions — and the student debt they will be left saddled with will be monstrously incalculable.
In terms of APC’s next steps, we will be looking quite closely at all options as we continue to advocate on behalf of the thousands of students who attend proprietary colleges and benefit from the valuable educations they provide.
In the interim, we encourage you to explore this special section we’ve put together to facilitate a fair, balanced, practical examination of the GE regulation and to share our knowledge and concerns on its harmful impact on the very students the Department says it seeks to protect. Many voices have weighed in on the complex issues surrounding GE and for-profit education in general, and not all of them are speaking the truth. Here we help set the record straight.
Reporters interested in learning more about APC’s position on the GE Rule are encouraged to call:
Media Liaison: STARKMAN / 212-252-8545
To learn more about APC’s thoughts on Gainful Employment and how we can best serve the interests of impacted students, please view the following documents:
Statement Regarding the Recent Gainful Employment Ruling
“We are disappointed in the Court’s ruling against our lawsuit challenging the validity of the Department of Education’s Gainful Employment Rule. While we agreed with the Department’s goals for this rule from the outset, we remain steadfast in our conviction that this regulation does not achieve those goals. Namely it does not distinguish between successful programs and those that are not. Despite headlines suggesting otherwise, most proprietary colleges are providing strong programs and producing strong outcomes, and the best interests of their students are worth championing. We will be looking quite closely at all options as we continue to advocate on their behalf.”
Gainful Employment Blog
Gainful Employment and APC’s Position
The national debate about the Gainful Employment Rule and related issues and challenges is quite complicated. We’ve put together the following set of FAQs to address some of the more common questions.
Lawsuit Parade: APC vs. Secretary Arne Duncan and the Department of Education
In early November 2014, APC filed suit in the Southern District of New York, challenging the validity of the Department of Education’s Gainful Employment (GE) Rules. As we have pointed out through various blog posts and as formally outlined in that complaint, the Rules are unconstitutional, violate the plain language of the Higher Education Act, and are arbitrary and capricious.
At A Glance: Shortcomings of the Proposed Gainful Employment Rule
On October 31, 2014, the Department of Education released its controversial Gainful Employment (GE) Rule, with the stated intent to ensure that students studying in certain higher education programs receive a quality education that adequately prepares them for gainful employment. Programs that failed the Rule’s performance metrics would quickly lose access to federal student aid programs.
To understand how the Gainful Employment (GE) measures the Department proposed do not advance their intended goals, please view our overview here.
Submitted Comments on Gainful Employment Regulations
Following publication of the draft GE regulation, the public was invited to submit feedback or comments on the proposal. A copy of our full comments, along with those submitted by APC members, can be accessed below:
- Association of Proprietary Colleges Comments on Gainful Employment (3 MB)
- Bryant & Stratton Comments on Gainful Employment (10MB)
- College of Westchester Comments on Gainful Employment (<1 MB)
- Jamestown Business College Comments on Gainful Employment (<1 MB)
- LIM College Comments on Gainful Employment (8 MB)
- Monroe College Comments on Gainful Employment (6 MB)
- School of Visual Arts Comments on Gainful Employment (<1 MB)
A number of independent research reports have been published that provide evidence against the rationality of the Department of Education’s GE proposal:
- Nov. 2014: The Hamilton Project/The Brookings Institution study: “Major Decisions: Graduates’ Earnings Growth and Debt Repayment”
- Sept. 2014: The State Council of Higher Education for Virginia (SCHEV) study: “Mid-Career Outcomes of Graduates of Virginia Institutions of Higher Education”
- Sept. 2, 2014: Federal Reserve Board of New York blog posts by research analysts Jaison Abel and Richard Deitz: “The Value of a College Degree”
- May 14, 2014: American Enterprise Institute study: “Are Graduates From Public Universities Gainfully Employed? Analyzing Student Loan Debt and Gainful Employment”
- May 2011: Nexus Research & Policy Center and American Institutes for Research study: “Who Wins? Who Pays? The Economic Returns and Costs of a Bachelor’s Degree”
- Parthenon Report (1 MB)
- Compass Lexicon Report #1 (<1 MB)
- Compass Lexicon Report #2 (<1 MB)
- Compass Lexicon Report #3 (<1 MB)
- Bettinger Report (<1 MB)
Recent Gainful Employment Articles
“Gainful Employment Rule Could Harm Law Schools” – The Hill, March 13, 2015
In this blog, legal professional Martha Walters Barnett outlines the impact that the Gainful Employment Rule will likely have on proprietary law schools, underscoring the fact that it would prevent many low-income, minority students from receiving an education.
“Some Owners of Private Colleges Turn a Tidy Profit by Going Nonprofit” – The New York Times, March 2, 2015
This article explores the benefits that previously for-profit schools have enjoyed as a result of shifting to nonprofit status, ultimately shedding light on the paradoxical nature of the Gainful Employment regulation and the inherent bias against for-profit colleges.
“The Promise and Failure of Community Colleges” – The New York Times, February 17, 2015
In this piece, education reporter Eduardo Porter considers whether President Obama’s much-heralded community colleges, which largely yield subpar graduations rates, can deliver on their promise and serve large volumes of students who are often unprepared for secondary education. Most community colleges are granted amnesty under Gainful Employment, despite such performance outcomes.
“Counting Students Equally?” – Inside Higher Ed, January 30, 2015
This article reports that, as part of President Obama’s college ratings system, the Department of Education is considering adjusting a college’s outcomes based on the demographics of the students – an approach it has previously rejected when it comes to holding for-profit colleges accountable via Gainful Employment.
“Low-Income Adults Not Served By Punishing For-Profit Colleges” – The Oklahoman, January 20, 2015
In this piece, The Oklahoman Editorial Board criticizes the attack on for-profit schools, noting that, while they are not without flaws, they have proven to be a viable way for low-income adults to earn degrees and secure employment.
“The Problem With Obama’s ‘Free Community College’ Proposal” – TIME, January 20, 2015
This piece by researchers at the Community College Research Center within Columbia University’s Teachers College highlights the shortcomings of President Obama’s proposed plan to offer tuition-free admission to community colleges, focusing their analysis on weak program outcomes and quality issues.
“The ObamaCollege Plan” (subscription required) – The Wall Street Journal, January 11, 2015
This Wall Street Journal editorial criticizes President Obama’s free community college proposal, pointing to their weak outcomes and calling attention to the fact that such schools, along with nonprofits, are exempt from the administration’s Gainful Employment Rule.
“Higher Education Issues: 15 for ‘15” – Forbes, January 6, 2015
Forbes contributor John Ebersole, president of the Albany-based, private, nonprofit Excelsior College, questions the benefits of the Gainful Employment regulation, suggesting that it is one of the most “pressing issues” the higher education sector will face in 2015.
“Real Problem. Wrong Solution. Go Back to School” – Arizona Republic, December 5, 2014
This editorial from Arizona Republic highlights the flaws of the Gainful Employment Rule, arguing that accountability for federal financial aid dollars and student outcomes should not be limited to for-profit colleges.
“Regulation for Profit” (subscription required) – The Wall Street Journal, November 30, 2014
This Wall Street Journal editorial sheds light on the Department of Education’s continued hypocrisy and unsound reasoning when it comes to the regulation of the higher education sector, most notably in its oversight of the sale of Corinthian Colleges schools to Zenith Education Group, a non-profit student loan agency with little relevant experience as a higher education provider.
“For-Profit Colleges Fight New Federal Rule” – USA Today, November 29, 2014
This article underscores how critics of the Gainful Employment Rule are not solely those within the proprietary college sector, but include professionals in the broader higher education landscape who are recognizing the rule’s devastating impact on the students it’s supposed to protect.
“Correcting the Falsehoods About For-Profit Colleges” – The Washington Post, November 11, 2014
In this editorial, author Lanny Davis, a D.C.-based lawyer and representative of the career college sector, debunks the common misconceptions of for-profit colleges, countering three falsehoods when performance by for-profit colleges is compared to community colleges.
“Private and Successful Grades, Too” – Albany Times Union, October 27, 2014
In this commentary, APC president Donna Stelling-Gurnett responds to a piece in the Washington Post, which was reprinted in the Albany Times Union, to highlight how many proprietary colleges in New York state boast high completion rates – largely due to the state’s stringent higher education regulatory standards – thereby defying the widely held public misperceptions about the sector.
“Public-College Leaders Rail Against Education Dept.’s ‘Regulatory Culture’” – Chronicle of Higher Education, October 20, 2014
This piece sheds light on the frustrations of many leaders in the higher education space – including those from non-profit, public colleges and institutions – over the Department’s policy proposals and regulatory actions, including its Gainful Employment Rule that they deemed as having a “negative impact on all sectors of higher education.”
“5 Flaws in the High-Stakes ‘Gainful Employment’ Rule” – Chronicle of Higher Education, October 9, 2014
Here Chief Washington reporter Kelly Field provides a comprehensive analysis of the Gainful Employment rule and how its metrics render it incapable of achieving its intended goal.
“In Defense of For-Profit Colleges” – National Review, October 7, 2014
In this guest column, association director of the Center for Educational Freedom at the Public Policy research organization The Cato Institute, outlines various reasons why attacks on for-profit colleges are biased and misguided, particularly when it comes to program completion rates.
“The Problem With the Administration’s ‘Good Intentions’ in Education” – The Hill, October 1, 2014
This blog, written by the president and CEO of the National Black Chamber of Commerce, leverages a study by the Parthenon Group to explain how the Gainful Employment Rule would unfairly penalize institutions that provide opportunities to students who might not have otherwise had the chance to receive an education.
“A Federal Anti-Education Plan” – The Wall Street Journal, November 19, 2013
In this op-ed, former Nebraska senator Bob Kerrey and Leeds Equity Partners’ Jeffrey T. Leeds examine the arbitrary metrics behind the gainful employment rule, the impact it will have on low-income students, and the Obama administration’s inherent bias against proprietary schools.