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