For more resources and coverage regarding gainful employment, please use the links below to jump to each year during which gainful employment negotiated rulemaking was held.
The Higher Education Act (HEA) of 1965, as amended, defines institutions of higher education, proprietary institutions of higher education, and postsecondary vocational institutions in part as those that prepare students for gainful employment in a recognized occupation. Congress to date has avoided defining gainful employment, leaving the Department of Education free to determine what constitutes gainful employment to ensure that the requirements of the HEA are satisfied.
With the announcement of negotiated rulemaking in May of 2021, this thorny topic will have been addressed by three consecutive presidential administrations over the course of more than a decade.
In 2009 the Department of Education (ED) under President Obama established a negotiated rulemaking committee to establish measures for determining whether certain postsecondary educational programs lead to gainful employment in recognized occupations, and the conditions under which these educational programs remain eligible for the Title IV student financial assistance programs.
The goal of this regulatory exercise was to address what the administration saw as growing concerns over unaffordable debt levels among students who enrolled in postsecondary programs that purported to prepare students for gainful employment. ED intended to address these concerns by developing measures to determine whether the amount of debt a student incurred was reasonable based on their earnings.
The committee failed to reach consensus, leaving ED to develop final rules on their own. Final rules were published in two separate Federal Register notices on October 29, 2010 for a subset of the topics negotiated— one for approval of new programs and the other for reporting and disclosure requirements for programs that prepare students for gainful employment in a recognized occupation. The effective date of these provisions was July 1, 2011.
Subsequent final rules on the remaining topic of eligibility of gainful employment programs to participate in the Title IV student aid programs were published on June 13, 2011, with an effective date of July 1, 2012. The rules provided a definition for programs that provide training leading to gainful employment in a recognized occupation. They also applied two tests to programs meeting that definition, one based on debt-to-income ratios and the other on repayment rates, to assess whether a program of study led to gainful employment and, consequently, whether the program would continue to be eligible to participate in the federal student aid programs.
In 2013, the Department announced its intention to convene a new negotiated rulemaking committee to tackle gainful employment once again. Those sessions took place in the fall of 2013, concluding again without consensus. ED published final rules in 2015 with an effective date of July 1, 2015. The 2015 rules were similar to the 2011 regulations (which were largely vacated by court order in a 2012 ruling before the rules became effective), but they lacked a repayment rate metric, relying solely on a debt-to-income ratio to establish program eligibility.
Even before all of the 2015 rules became effective, ED announced in June, 2017 its intention to negotiate gainful employment yet again. For the third time, negotiators failed to reach consensus, leaving ED to develop regulations as it saw fit. ED's draft language shared during negotiations included sweeping changes to the gainful employment regulations, including applying those rules to all programs at all institutions rather than limiting to non degree programs and programs offered by proprietary institutions. However, ED ultimately decided instead to rescind the gainful employment rules entirely on July 1, 2019, effective July 1, 2020 but with the option for institutions to implement as early as July 1, 2019.
Most recently, ED announced its fourth notice of intent to establish a negotiated rulemaking committee for Gainful Employment on May 26, 2021. Three negotiation sessions were held during January through March of 2022, concluding without consensus. ED published a draft rule for public comment in May of 2023 and published final rules on October 10, 2023, with implementation set for July 1, 2024.
Publication Date: 10/16/2023