get the facts

Information and background on the issue of career education accountability

U.S. Senator Tom Harkin seminal report on the for-profit college industry. The news release issued at the time and the full report are here.

What to Know About the Gainful Employment Rule 

Fact sheet on the Gainful Employment (GE) rule. The Higher Education Act (HEA) requires that all career education programs receiving federal student aid “prepare students for gainful employment in a recognized occupation,” however, the HEA does not define “gainful employment.” The purpose of the GE rule is to provide that definition.

How Much Did Students Borrow to Attend the Worst-Performing Career Education Programs? 

The Gainful Employment rule enforces the Higher Education Act’s requirement that all career education programs receiving federal student aid “prepare students for gainful employment in a recognized occupation.” The rule uses debt-to-earnings ratios to assess whether career education programs at public, nonprofits and for-profit colleges are leaving their graduates with reasonable debt burdens. Programs that exceed allowable thresholds – those consistently leaving their graduates with more debt than they can repay – must improve or lose eligibility for federal funding.

TICAS Blog: Same Program, Different Results: Better Options Exist for Students in the Worst-Performing Gainful Employment Programs

The gainful employment rule enforces the Higher Education Act’s requirement that all career education programs receiving federal student aid “prepare students for gainful employment in a recognized occupation.” The rule uses debt-to-earnings ratios to assess whether career education programs at public, nonprofit, and for-profit colleges are leaving their graduates with reasonable debt burdens. Programs that exceed allowable thresholds—those consistently leaving their graduates with more debt than they can repay—must improve or lose eligibility for federal funding. This rule also provides consumers with key information about program costs and outcomes so they can make an informed decision about where to enroll.

The Department of Education has proposed rescinding the gainful employment rule completely, arguing that programs’ performance under the rule can be explained by factors like student characteristics and economic background, program field, and school location. However, similarly located career education programs serving similar students can have very different outcomes.

We recently identified several poorly performing programs that are located near programs that have much lower cost and/or much better outcomes. For example:

  • In Birmingham (AL), graduates from the criminal justice administration bachelor’s degree program at Strayer University typically earned almost twice as much and owed $6,600 (20 percent) less than graduates from the same program at Virginia College.
  • In South Plainfield (NJ), graduates from the dental assisting certificate program at Central Career School typically earned $6,600 more per year and owed about half as much as graduates from the same program at Everest Institute.

In addition to providing the same program in the same city, the schools in each comparison serve demographically similar groups of students, as measured by the share of the student body that receives Pell Grants, is Black, or is Hispanic/Latino.

These examples demonstrate the need for the gainful employment rule to prevent poorly performing programs from continuing to bilk students and taxpayers, and to keep unscrupulous schools from enrolling as many students as possible without regard to the quality of the training or job prospects. They also show that students have alternative options for where to enroll even if poorly performing programs close.

To learn more, check out:

  • Our new analysis for more comparisons.
  • Our comments on the Department’s proposal to rescind the gainful employment rule.
  • The comment submitted by 68 organizations representing students, consumers, veterans, service members, faculty and staff, civil rights, and college access – demonstrating broad support for affordable, quality career education.

Legal Brief from 16 Organizations in Support of the Gainful Employment Rule

On March 1, 2018, 16 organizations representing students, veterans, consumers, faculty and staff, civil rights, and more in support of 18 states in their lawsuit against the US Department of Education to stop the illegal delay of the gainful employment rule. The legal brief documents how the Department’s unlawful actions harm students, remove powerful incentives for schools to obey the law, and violate the APA.

Law Enforcement Investigations and Actions Regarding For-Profit Colleges

Compiled by Republic Report, a list of pending and recent significant federal and state civil and criminal law enforcement investigations of, and actions against, for-profit colleges.  Includes some major investigations and disciplinary actions by the U.S. Department of Education and Department of Defense.  It does not include investigations or disciplinary actions by state education oversight boards.  It also does not include lawsuits prosecuted only by private parties — students, staff, etc.

Policy Brief from Eight Civil Rights Groups in Support of the Gainful Employment Rule

A coalition of eight civil rights organizations released a policy brief, 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.

A Q&A on the Gainful Employment Regulation

Fact Sheet on the New “Borrower Defense” & College Accountability Regulations

Letter from 11 state attorneys general opposing riders that would weaken the Department of Education’s ability to be a good steward of taxpayer dollars and protect students (November 2015)

NACAC Letter Opposing Loopholes in Incentive Compensation Ban (June 2015)

Letter from the National Association for College Admission Counseling (NACAC) opposing an amendment would create dangerous loopholes in the statutory ban on incentive compensation (commissioned sales) that was enacted more than 20 years ago with broad bipartisan support.

Letter to Secretary Duncan from Members of Congress About For-Profit Colleges Converting to Non-Profit (April 2015)

19 Members of Congress sent a letter to Education Secretary Arne Duncan asking him to “carefully examine the recent conversions to determine whether these institutions may legitimately be treated as non-profits for purposes of Department of Education regulations or whether they instead should remain covered by the rules and notifications governing for-profits”. They also ask about the Department’s process for reviewing these conversions.

Q&A on the 90-10 Rule. The 90-10 Rule is a federal law barring for-profit colleges from receiving more than 90% of their revenues from Department of Education federal student aid. It is modeled on the Department of Veterans Affairs’ long-standing 85-15 Rule, which prohibits more than 85% of a program’s students from receiving VA funding.

December 2012 letter to Secretary Duncan from Senators inquiring about CDR manipulation

Duncan response to December 2012 letter from Senators

The Project on Student Debt’s resource page on the federal student loan cohort default rate (CDR) provides background and useful links about cohort default rates for reporters, policymakers, and the general public.

Final Education Department Program Integrity rules released October 28, 2010 which includes regulations on the issues of incentive compensation, misrepresentation, state authorization and credit hour.

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