The accountability and transparency measures established in the 2011 gainful employment rules applied to all non degree programs at public and private nonprofit institutions of higher education, as well as to nearly all degree and non degree programs offered by proprietary institutions.
The regulations established three measures by which programs would be judged as to whether they provided quality education and training to their students that led to employment with sufficient earnings to allow students to repay their student loan debts. The rules included three standards by which program eligibility would be determined:
A program that failed all of the minimum standards for a single fiscal year was considered a failing program, retaining that status until it either passed the minimum standards for each of the three following fiscal years or was determined to be an ineligible program within the four-fiscal period. Once a program failed to meet any of the minimum standards for three out of the four most recent fiscal years, the program became an ineligible program.
The 2011 rules faced legal challenges which resulted in a federal judge striking down—just one day before the rule was set to become effective—the debt-to-income (discretionary earnings and actual earnings thresholds) and annual loan repayment rate metrics (and, consequently, ED’s ability to enforce those metrics) on the basis that ED had failed to provide sufficient evidence to justify its repayment rate metric. The associated reporting requirements were also invalidated, but disclosure requirements were left intact.