House Democrats Introduce Bill to Reinstate Gainful Employment Rule

By Joelle Fredman, NASFAA Staff Reporter

Two House Democrats introduced a bill late last week to reinstate the Obama-era gainful employment (GE) regulations that the Department of Education (ED) eliminated last month. While the rule — or lack thereof — does not take effect until July 2020, some institutions have already begun early implementation. 

In their bill — the Student and Taxpayer Protection Act — Reps. Mark Takano (D-CA) and Donna Shalala (D-FL) proposed that ED revive the practice of tying Title IV eligibility for non-degree-granting programs to their students’ ability to repay their loan debt, or their debt-to-earnings ratios. Since the Obama administration first attempted to implement GE regulations in 2010, they have been highly criticized. While some said they unfairly targeted for-profit institutions and that they should be applied to all institutions, others worried that the regulations were overly burdensome.

“Failure by [ED] to put students first requires Congress to step in and ensure that every student has access to a quality and affordable education and to hold predatory for-profit institutions accountable for taking advantage of students and providing them with low-quality instruction,” Takano said in a press release. “We cannot allow for-profits to continue preying on low-income students, minority students, and student veterans by driving them deep into debt they cannot repay.”

ED originally proposed to rescind the GE regulations in August 2018, and instead update the College Scorecard, or a similar web tool, to include program-level data for all schools accepting federal funds, whereas now the online resource only provides institution-level information. ED wrote that it based its decision to strike the regulations on “research results that undermine the validity of using the regulations’ debt-to-earnings rates measure to determine continuing eligibility for title IV participation,” as well as negative feedback about reporting requirements. The announcement came after a group of higher education stakeholders met numerous times over the course of three months to discuss issues such as which types of programs the regulations should target, and what measures ED should use to judge a program’s success. 

After collecting public comment, ED last month published a notice in the Federal Register officially announcing that it had eliminated GE regulations. While the rule does not take effect until July 1, 2020, ED allowed for early implementation, at institutions' discretion. The results from a poll on NASFAA's website as of August 26 about whether institutions already implemented the GE rescission show that of the more than 340 members that responded, about 90% said their schools have done so.

Shalala wrote in a press release, however, that reinstating the regulations “is not just the smart thing to do, it is the right thing to do.”

“The Obama administration put this rule into place to help prevent disreputable institutions from taking advantage of students by giving them worthless degrees and loads of student debt. By reinstating this rule, we will be restoring an essential protection for those who may otherwise fall prey to exploitative institutions whose only interest is padding their bottom line—not educating students,” Shalala wrote.

The bill has been referred to the House Committee on Education and Labor.


Publication Date: 8/28/2019

Steve S | 9/6/2019 9:33:17 AM

GE is an pain in the ass for small institutions like ours. We do not have big IT Departments nor extra time dealing with difficult to follow mandates. Just because your labeled "For Profit" is not a reason to attack a whole sector. There are bad actors in every industry. I sure do not have the resources to pay a football millions of dollars, which comes from student aid, yet somehow our student debt is different that a school that students leave owing 65,00.00 dollars. Ours's leave with 10,00.00 and a marketable skill but somehow we are the bad guys. Atlanta is full of multimillion dollars properties owner by Georgia State and Georgia Tech, they are making a major profit. Give me a break.

Thomas P | 8/30/2019 12:23:07 PM

This regulation should never have included public institutions, in my opinion. I was a big waste of time for most of us and took away from all the other things we need to get done in the financial aid world. Being in financial aid for over 30 years, I can easily say this is in my top 5 of useless regulations. NOBODY, ever asked us anything about what we disclosed or reported so I am quite sure nobody ever looked at it. Towards the end, we even had an issue with the Dept of Ed's own Civil Rights division telling us that the template was out of compliance! Hello, how embarrassing is that!!!??? Good riddance, GE!

Mhairi D | 8/30/2019 10:36:21 AM

I wholeheartedly concur with what Joel stated.

In addition, this flip flopping on the regulations is rather annoying and embarrassing. So much work goes into these ridiculous guidelines. It's not just my job, but I have to have our online school, our grad school, our Registrar's Office and Billing department all get involved. When the government says we have to comply by July 1st, then says just kidding, then says July 1st, then just kidding, then says July 1st, we follow through with all the procedures and training we set up, and then two weeks later saying you can do the recision and opt out - it makes me look like a fool. So much unnecessary time and energy goes into something that students do not look at or consider. Such a waste of time no matter which side of the political spectrum you are on.

If GE will come back, it needs to be revised first - and to become something BOTH sides agree on so this back and forth ceases. Stick with it so we can do our job.

Joel T | 8/28/2019 6:13:04 PM

Based on the comment by David S., I am not sure that he has ever tried to comply with all of the useless and absurd GE regulations. Heather B. was exactly right in her comment. This rule was meant to target specific institutions and it somehow got scaled to a point that caused everyone to get hit in the crossfire.

The rules that we were able to opt out of early were causing an incredible amount of administrative burden for the entire campus, and I applaud Secretary DeVos for her decision to rescind these regulations. Regardless of where we stand politically, we should be able to applaud someone for making a good decision.

Before NASFAA decides whether or not to support this new legislation, I hope they will survey the membership and get our feedback. The last time I checked, approximately 90% of our membership decided to early opt out - and that says something.

Jaime S | 8/28/2019 2:42:34 PM

The GE regs are useful, but only for certain populations. Our programs are all at the graduate level and all students are already gainfully employed. Our certificates are employment enhancers, not used to change careers. Gathering and reporting the data for our students is time-consuming and burdensome. We have few students and completers (under 10 in most cases) so most of the data is not useful. I think GE is important for undergrad non-degree programs but does not fulfill its purpose at the graduate level.

Heather B | 8/28/2019 11:49:56 AM

I am 100% on board if the rule prevents "disreputable institutions" from providing worthless degrees. The old rule, however, had a wide span and sure caused a lot of unnecessary work and paper chasing for some very reputable schools.

Angela H | 8/28/2019 11:6:44 AM

I am thankful. Too many students have worthless degrees and tons of student loan debt. Please pass this Bill in the Senate.

David S | 8/28/2019 9:29:26 AM

Don't worry, GE haters. This would have to be passed by the Senate in order to become law. The Senate is no longer a legislative body.

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

The Basics of Gainful Employment and Financial Value Transparency


Gainful Employment and Financial Value Transparency Webinar Handout


View Desktop Version