Report: Gainful Employment Could Deter Community Colleges from Expanding Vocational Programs

By Joelle Fredman, Communications Staff

The federal government created the gainful employment (GE) regulations to help protect students from investing in expensive, proprietary institutions that left them buried in debt and unprepared to enter the job market. Unfortunately, in doing so it also created obstacles for community colleges offering vocational programs, according to a new report from the American Enterprise Institute.

The report, “The Path Less Taken: Barriers to Providing Career and Technical Education at Community Colleges,” found that while the law was designed to ensure that for-profit programs improve their graduates’ debt-to-earnings ratios, it may negatively impact students earning certificates at community colleges because GE regulations require these programs to exhaust resources collecting data and may inspire them to limit program size to avoid reporting requirements.

“GE imposes a number of burdensome reporting requirements on community college certificate programs that soak up considerable administrative time and do not accurately reflect actual program outcomes since only students who participate in Title IV (federal student aid programs) are included in official measures,” Diane Auer Jones, senior fellow in the Center on Labor, Human Service, and Population at the Urban Institute and author of the report, wrote.

GE regulations also require that these institutions record and report job-placement rates, which is difficult because the conditions for what qualifies as employment are not specifically defined, according to Jones.

Jones argued that in order to avoid reporting requirements, community colleges may try to keep vocational programs small so they do not qualify under Title IV participation, which would mean students couldn't use federal loans to help defray the cost of tuition.

The regulation may also dissuade an institution from offering certificates aimed at building a student’s skills and readiness for the job market, but do not directly lead the student to qualify for a specific job, according to Jones.

“On one hand, the GE rule encourages institutions to eliminate low-value programs, thus saving students from unwise investments. On the other hand, it can discourage institutions from offering certificate programs that may help individuals build skills and improve their employability,” Jones wrote.

Jones suggested that all schools should be held responsible to the terms of GE regulations and that the Department of Education should more clearly define the term ‘job-placement’ so that comparisons can be made between schools. She also argues that federal data sources be utilized to collect numbers on debt-to-earnings ratios so that institutions do not have to rely on employees to gather data or graduates to report it.

“Federal regulations that expressly target or disproportionately affect vocational education programs may make community colleges more reticent to offer them,” Jones wrote. “While consumer protection is certainly important, the unintended consequences of some regulations can make the cure worse than the disease.”


Publication Date: 11/17/2017

James P | 11/17/2017 10:18:12 AM

The requirements should not be the same for public community colleges as they are for private for-profits.

Dori B | 11/17/2017 9:33:21 AM

The Feds need to recognize that the one-size fits all approach to GE regulations (as with many DOE regulations) does a great disservice to community colleges. The data I'm required to pull together to meet Disclosure requirements is totally useless to my student population. We don't even participate in the Federal Student Loan program...we have NO debt/earnings ratio to report. As this article suggests, we have reduced the number of TIV eligible certificate and diploma programs because of the time and resource commitment required to comply with regulations.

Ean F | 11/17/2017 9:18:11 AM

Perhaps it would be beneficial to utilizing existing GE reporting (spanning many years) made by institutions thus far to determine the value gained by additional reporting and data collection. If an entire sector (Community Colleges) lacks failing programs...

You must be logged in to comment on this page.

Comments Disclaimer: NASFAA welcomes and encourages readers to comment and engage in respectful conversation about the content posted here. We value thoughtful, polite, and concise comments that reflect a variety of views. Comments are not moderated by NASFAA but are reviewed periodically by staff. Users should not expect real-time responses from NASFAA. To learn more, please view NASFAA’s complete Comments Policy.

Related Content

Gainful Employment


Panels Discuss Strategies and Challenges to Measuring the Value of Higher Education


View Desktop Version