NAICU Washington Update

Elimination of Gainful Employment Regulations Proposed

August 24, 2018

The U.S. Department of Education has formally proposed to rescind the Gainful Employment regulations in a recently issued Notice of Proposed Rulemaking (NPRM). While pieces of the reporting and disclosure requirements have been delayed since the Trump Administration assumed control of the Department of Education, the newly proposed rule intends to rescind the regulations entirely. Further, the Department proposed in the same NPRM using the College Scorecard as a mechanism to publish earnings data for every program (i.e. major) at every college and university in the nation.
The NPRM follows a negotiated rulemaking panel that concluded its regulatory rewrite efforts in March 2018, without reaching consensus. Public comments on the NPRM will be accepted by the Department through September 14, 2018.  The proposal will likely be finalized shortly thereafter.
The Gainful Employment regulations were established to stop program abuse occurring largely in the career college sector. The initial Gainful Employment regulations were finalized by the Obama Administration in 2010. Critics of the Gainful Employment regulations contend that they unfairly target the for-profit sector while allowing degree programs at public and private nonprofits to operate outside the scope of the regulations.  However, those critics seldom recognize that the regulation actually applies to certificate programs at nonprofit and public institutions as well.  Proponents contend that the Gainful Employment regulations are an important safeguard against fraud and abuse.  The regulations have faced legal hurdles over the years and had to be completely rewritten in 2014 after a court struck down significant portions of the 2010 regulations.
The Department has also proposed expanding disclosures on the College Scorecard to include earnings data for all majors at all institutions. While the Department is mostly silent on how it intends to implement the new disclosures, NAICU is troubled that the Department could greatly expand the nature of the consumer information available on the Scorecard with little public discussion on the appropriateness or validity of the data being sought.   

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