The Latest: Gainful Employment Regulation Needs to be Strengthened

Coalition Letter Urging Education Department to Take Immediate Actions for Former Students of Closed Corinthian Schools (May 2015)

Letter from 35 organizations that work on behalf of students, consumers, veterans, faculty and staff, civil rights, and college access urging the Department of Education to take immediate actions to ensure that former students of closed Corinthian Colleges are getting complete, correct, timely, and accessible information about their right to federal loan discharges and other options.

Coalition Letter Opposing the “Supporting Academic Freedom through Regulatory Relief Act”

Letter from more than 45 organizations working on behalf of students, consumers, veterans, faculty and staff, civil rights, and college access expressing strong opposition to House and Senate legislation that would repeal the gainful employment rule and create new loopholes in the statutory ban on incentive compensation (commissioned sales).

28 Groups Urge Court to Protect Students and Taxpayers, Uphold Department of Education ‘Gainful Employment’ Rule

In a friend-of-the-court brief filed March 6 with the U.S. District Court for the District of Columbia, 28 organizations urged the court to reject a legal challenge by the Association of Private Sector Colleges and Universities (APSCU) to the “gainful employment” rule. The groups advocate for students and college access, civil rights, veterans and consumers.

Nearly all of the groups also filed a brief on March 2 in the U.S. District Court for the Southern District of New York, where another industry group – the Association of Proprietary Colleges – launched a similar challenge to the rule.

Read a news release and find the briefs here.

Coalition Statement on the Report of the Task Force on Federal Regulation of Higher Education

14 organizations that advocate for students, taxpayers, and access to quality higher education issued a joint statement expressing concerns about the Report of the Task Force on Federal Regulation of Higher Education. The report does not represent the views of students or consumers, and it appears to be at odds with the views of 19 higher education associations that are on record strongly supporting gainful employment regulations.

Coalition Letter on Proposed Sale of Corinthian Colleges Campuses to ECMC Group

50 organizations that advocate for students, consumers, veterans, service members, college access, and civil rights sent a letter expressing grave concerns about the proposed sale of 56 Corinthian Colleges campuses to ECMC Group, a debt collector and loan servicer. The letter opposes waiving liability for any prospective buyer of Corinthian campuses unless the sale ensures significant relief for current and former students and contains enforceable safeguards to protect students and taxpayers from future abuse.  Read the letter here.

Final Gainful Employment Regulation Released
The Administration released its final gainful employment regulation on Thursday, October 30, 2014. The news release and final regulation can be found here.

Several organizations released statements on the final regulation, including:

American Federation of Teachers (AFT)
AFT’s Weingarten on Gainful Employment Regulations

Center for American Progress
STATEMENT: CAP Vice President for Postsecondary Education David A. Bergeron Applauds Final Gainful Employment Rule from the U.S. Department of Education

Center for Responsible Lending
The Weakened Gainful Employment Rule is a Step Forward, but Fails to Fully Protect Students

Consumers Union
Consumers Union: Dept of Ed’s new rules for career college programs are first step, more reform needed

Generation Progress
STATEMENT: Generation Progress on the Department of Education’s Gainful Employment Rule

The Institute for College Access & Success (TICAS)
Statement on Final Gainful Employment Regulation

League of United Latin American Citizens (LULAC)
Gainful Employment Rule Language Provides Important Accountability to Ensure Quality Higher Education

The Leadership Conference on Civil and Human Rights
Civil and Human Rights Coalition Calls New Gainful Employment Standards a Step Forward

Mississippi Center for Justice
Advocacy Group Issues Statement On Revised Department Of Education Rules Governing For-Profits

National Association for College Admission Counseling (NACAC)
NACAC Comments on Education Department’s New Gainful Employment Rule

New Regs on For-Profit Just A Start in Reforms needed to Protect Students

United States Student Association (USSA)
Department of Education Falls Short on Final Rule
Final proposed Gainful Employment fails to fully protect students at predatory for-profit institutions

Woodstock Institute
New federal rules on for-profit colleges fail to stop poor practices

Young Invincibles
Weak Gainful Employment Rule Leaves Students Vulnerable

National Civil and Human Rights Groups Urge Administration to Release Strong Gainful Employment Rule

A coalition of eight civil rights organizations released a policy brief today, October 29, 2014, urging the U.S. Department of Education to release a strong gainful employment regulation to protect students, particularly African-American and Latino students, from substandard career education programs.

The brief, “Gainful Employment: A Civil Rights Perspective,” documents the adverse outcomes that African-American and Latino students experience as a result of policies and practices implemented at for-profit colleges. Students at for-profit colleges are much less likely to graduate, more likely to default, and more likely to incur debt than students at public and non-profit schools. The brief details how a strong gainful employment rule will provide much needed protections to both students and taxpayers.

“Stronger oversight is desperately needed to tackle the problems of poor outcomes and high debt within career education programs,” the brief urges. “Currently, even when better and lower cost options are available, African-American and Latino students are disproportionately enrolled in schools where they are both likely to borrow and unlikely to succeed, and there are few incentives for schools to improve poorly performing programs.”

Click here to download the brief

The brief was released by The Leadership Conference on Civil and Human Rights, the Center for Responsible Lending, the Children’s Defense Fund, the Lawyers’ Committee for Civil Rights Under the Law, MALDEF, the NAACP, the NAACP Legal Defense and Educational Fund, and the National Council of La Raza.

A broad coalition of more than 50 organizations representing students and college access, veterans, consumers, and civil rights filed public comments calling on the Department to strengthen its proposed gainful employment rule in four specific ways. They include providing financial relief for students in programs that lose eligibility; limiting enrollment in poorly performing programs until they improve; closing loopholes and raising standards; and protecting low-cost programs where most graduates don’t borrow. Read the coalition comments here.

Many others also commented in support of a strong regulation, including Members of Congress, State Attorneys General, and organizations.

Draft Gainful Employment Regulation Released

The Administration released a draft gainful employment regulation on Friday, March 14, 2014. The news release and draft regulation can be found here.

Several organizations released statements on the draft regulation, including:

Center for Responsible Lending

Gainful Employment Rule Gains Little for Students

The Education Trust:

Statement by The Education Trust on the U.S. Department of Education’s Proposed “Gainful Employment” Regulation

The Leadership Conference on Civil and Human Rights

Civil and Human Rights Coalition Responds to Proposed Regulations on For-Profit Colleges


Gainful Employment Regulation Language Provides Important Accountability But Misses the Mark


NAACP Statement on New Obama Administration Proposal to Regulate For-Profit Colleges


Proposed Gainful Employment Rule Must be Strengthened to Protect Students and Taxpayers from Career Education Programs that Over-Charge and Under-Deliver

Young Invincibles:

Dept. of Education’s Draft Gainful Employment Rule Ignores Students and Weakens Consumer Protections

Broad Coalition Calls for Strong Gainful Employment Rule

A broad coalition of more than 50 organizations which work on behalf of students and college access, veterans, consumers, and civil rights sent aletter to President Obama urging a strong gainful employment regulation to protect students, taxpayers and our nation’s economy. Read the letter here.

More than 30 House Democrats Urge Department to Finalize Gainful Employment Rule

Thirty-one House Democrats sent a letter to United States Secretary of Education Arne Duncan supporting the Department’s efforts to finalize gainful employment regulations. In the letter, the signee’s state, “More than ever, we need a rule that ends federal financial aid for programs that consistently leave students – our veterans, working parents, and other Americans struggling to build new lives – without decent incomes and with insurmountable debt.” Read the news release and letter here.

Department of Education Holds Negotiated Rulemaking Committee on Gainful Employment

On June 12, 2013, the Department published a notice in the Federal Register announcing its intention to establish a negotiated rulemaking committee to prepare proposed regulations to establish standards for programs that prepare students for gainful employment in a recognized occupation. The notice set a schedule for the committee meetings and requested nominations for individual negotiators to serve on the negotiating committee. The committee was announced in August and can be found here. The first negotiated rulemaking session was September 9 – 11, 2013. The second was November 18-20, 2013, and a third session was held December 13, 2013. The negotiators did not reach consensus on a draft regulation.

Information about the negotiated rulemaking committee and its work can be found here.

Coalition Letter in Opposition to the Academic Freedom through Regulatory Relief Act

A broad coalition of more than 40 organizations that work on behalf of students, consumers, veterans, faculty and staff, civil rights and college access and affordability sent a letter to the Chairs and Ranking Members of the House Education and Workforce Committee and its subcommittee on Higher Education and Workforce Training voicing strong opposition to the “Academic Freedom through Regulatory Relief Act” (H.R. 2637). The legislation would do nothing to reduce the cost of higher education, would halt collaborative work underway to develop common-sense solutions to protect students and taxpayers from waste, fraud and abuse in higher education, and reward institutions that deceive prospective students and provide low-quality, overpriced educational services.

Coalition letter to House Committee Chairs Opposing H.R. 2637 (pdf)

Public Hearings and Comments on Upcoming Rulemaking Sessions

In May and early June, the Department of Education held four public hearings to accept input on topics to consider in upcoming negotiated rulemaking sessions, and it also accepted written comments. Many organizations and elected officials spoke or submitted comments, in particular encouraging the Department to effectively enforce the statutory “gainful employment” requirement for all career education programs.

Information on the hearings, including lists of presenters and hearing transcripts, can be found here.

Gainful Employment Litigation

In June 2012, a federal judge upheld the Department of Education’s authority to issue regulations to enforce the statutory requirement that career education programs receiving federal funding, whether at for-profit, public or nonprofit colleges, “prepare students for gainful employment in a recognized occupation,” but it also invalidated parts of the gainful employment regulations because the judge concluded that the Department had not offered a sufficient rationale for the rule’s loan repayment rate threshold.  The Department petitioned the judge to uphold the rule’s reporting requirements, which support the rule’s disclosure requirements. The judge issued his ruling in March 2013, denying the Department’s motion to uphold the Gainful Employment reporting requirements, which means only the rule’s disclosure requirements remain in effect. You can read articles about the ruling here and here.

Senate HELP Committee Report on the For-Profit Education Industry

On July 30, 2012, Senator Harkin unveiled a HELP Committee report on the for-profit education industry and the 30 companies that have been the focus of a two-year Committee investigation. The report provides a comprehensive analysis of how the $32 billion annual investment in the sector is serving taxpayers and the students enrolling in the schools.  The report draws on data and documents not previously released including new student outcome data for each of the companies reviewed. Joining Senator Harkin at the press conference were Senator Blumenthal, Congressman Cummings, Amy Wilkins from The Education Trust, Tom Tarantino from Iraq and Afghanistan Veterans of America, and Laura Brozek, a former Director of Recruitment for ITT Technical Institute.

The entire report, For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success, can be found here.    

Gainful Employment Informational Data

On June 26, 2012, the Department of Education released data for career education programs at public, for-profit and non-profit schools subject to the Gainful Employment regulation.  The data show that five percent of the programs—all located at for-profit colleges—do not meet any of the three debt measures in the Department’s Gainful Employment regulation.  Only 35 percent of programs meet the minimum standard for all three metrics. The data are informational only and do not have any consequences associated with them. And now, with the federal judge’s June 30 decision on the Gainful Employment Regulation, the problems revealed in this informational data are left with no regulation to address them.

The Department’s news release and links to the data are here. The Chronicle of Higher Education put the data in a searchable form, which is here.  New America’s initial analysis of the data is here,

Executive Order to Protect Veterans and Servicemembers from Colleges that Seek to Mislead Them

On a visit to Fort Stewart in Georgia on April 27, the President signed an Executive Order designed to protect veterans and servicemembers and their families from colleges that seek to mislead them. In his speech, the president said:

“I’m not talking about all schools.  Many of them — for-profit and non-profit — provide quality education to our servicemembers and our veterans and their families.  But there are some bad actors out there.  They’ll say you don’t have to pay a dime for your degree but once you register, they’ll suddenly make you sign up for a high interest student loan.  They’ll say that if you transfer schools, you can transfer credits.  But when you try to actually do that, you suddenly find out that you can’t.  They’ll say they’ve got a job placement program when, in fact, they don’t.  It’s not right.  They’re trying to swindle and hoodwink you.  And today, here at Fort Stewart, we’re going to put an end to it.”

The goal of the Executive Order is to:

•   Create a centralized complaint system for students receiving Federal military and veterans educational benefits to register complaints that can be tracked and  responded to by the Departments of Defense, Veterans Affairs, Justice, and Education, the CFPB, and other relevant agencies.
•   Provide students with educational and financial information to make informed decisions.
•   End fraudulent and aggressive recruiting techniques on and off military installations.
•   Ensure support services for service-members and veterans.
•   Develop and collect service member- and veteran-specific student outcome data.
•   Begin the process to trademark the term “GI Bill.”

The full text of the Executive Order is here; the White House news release is here; background on the visit and event is here; a video of the President’s speech is here; the text of the President’s Fort Stewart speech is here, and President’s weekly radio address, which was also on this topic, is here. Veterans organizations that have been working on this issue came out in strong support of the Executive Order. Statements were issued by many groups, including the American LegionMilitary Officers Association of AmericaStudent Veterans of AmericaIraq and Afghanistan Veterans of AmericaVeterans of Foreign Wars, and Vietnam Veterans of America.

GAO Reports on For-Profit Colleges

The GAO recently issued two reports dealing with for-profit colleges.  For the first, For-Profit Schools: Experiences of Undercover Students Enrolled in Online Classes at Selected Colleges (October 2011), the GAO was asked to conduct undercover testing by enrolling in online classes under degree-granting programs. It reported that, “during the course of undercover testing, GAO documented its observations related to enrollment, cost, financial aid, course structure, substandard student performance, withdrawal, and exit counseling. Overall, GAO observed that 8 of the 15 colleges appeared to follow existing policies related to academic dishonesty, exit counseling, and course grading standards. At the 7 remaining colleges, GAO found mixed results. For example, one or more staff at these colleges appeared to act in conflict with school policies regarding academic dishonesty or course grading standards, or federal regulations pertaining to exit counseling for student loans, while other staff acted consistent with such policies.”

The second GAO report, Student Outcomes Vary at For-Profit, Nonprofit, and Public Schools (December 2011), reviewed available studies to look at student outcomes according to student characteristics at higher education institutions.  As reported in The Chronicle of Higher Education,” For-profit institutions perform worse than public and private colleges on most measures of quality, even when student demographics are taken into account.”

Senate HELP Committee hearing on improving for-profit education

On July 21, 2011, the U.S. Senate Health, Education, Labor & Pensions Committee chaired by Senator Tom Harkin held a full committee hearing entitled: Improving For-Profit Higher Education: A Roundtable Discussion of Policy Solutions. The discussion was focused on finding policy solutions to the problems in the for-profit highed education industry. In a news release announcing the hearing, Senator Harkin said, “Over the past year, my Committee has documented serious problems at some for-profit schools including deceptive and misleading recruiting tactics, disturbingly high drop-out rates, and large numbers of students left with debt but little else to show for their attendance” said Harkin. “Given the annual $30 billion taxpayer investment in these schools, it is incumbent on both the industry itself and Congress to ensure this investment is being used wisely. I am looking forward to a thoughtful discussion with school leaders, student and consumer advocates, and my colleagues to discuss how best to address the problems we’ve uncovered and ensure our taxpayer dollars are being used to provide Americans with education and opportunity.”

Watch a video of the hearing and find witness testimony.

Media Coverage of Need for Greater Accountability

Frontline: Educating Sergeant Pantzke

Tuesday, June 28: American public television’s public affairs series, FRONTLINE, began airing Educating Sergeant Pantzke.

Watch the full episode. See more FRONTLINE.

FRONTLINE writes: As troops return from Iraq and Afghanistan, U.S. government spending on veterans’ education will more than double to $9.5 billion this year, and a growing percentage of this money has been ending up in the pockets of for-profit colleges. In a follow-up to FRONTLINE’s College, Inc., correspondent Martin Smith investigates how the for-profit schools are aggressively recruiting huge numbers of new veterans with educational promises that many now question whether they can keep.

You can find additional media coverage here.

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