Letter Shows Biden Administration Will Not Reverse DeVos’ Gainful Employment Repeal

By Hugh T. Ferguson, NASFAA Staff Reporter  

Earlier this week, the Department of Education (ED) indicated that it would not reverse Education Secretary Betsy DeVos’ repeal of the gainful employment rules and would instead go through the negotiated rulemaking process to restore the Obama-era regulations.

The move by ED was announced through a letter, first reported by POLITICO, which cited correspondence with the department from an administrative complaint filed by a consumer advocacy group, Student Defense.

According to the letter, ED could not reverse DeVos’ repeal of the guidance because “the Department is legally obligated to conduct negotiated rulemaking and notice and comment requirements prior to proposing any changes to the Code of Federal Regulations with respect to Federal student financial aid programs, including with respect to regulations on the subject of gainful employment.”

While ED could not grant Student Defense the relief it requested, it did indicate that the Biden administration was looking to revisit the guidance. 

“The new leadership at the Department is reviewing and plans to revisit its policies relating to gainful employment in the future, as our resources and competing priorities permit, both with regard to the data and information considered in rescinding the gainful employment regulations and more broadly,” the letter read.

Gainful employment regulations were first proposed and finalized during President Barack Obama’s administration — first in 2011 before essentially being gutted when a federal judge said the core of the rule (a debt-to-income ratio) was developed arbitrarily, and again in 2014 — and then rescinded during President Donald Trump’s term through the regulatory process.

See NASFAA’s Coverage of the Negotiated Rulemaking Process for Gainful Employment

Due to the rescission of gainful employment, there's ambiguity in what it means to be gainfully employed, leaving the phrase undefined and creating a vacuum in oversight in how certain programs prepare students for viable career paths.

Stay tuned to Today’s News for more developments on gainful employment.


Publication Date: 5/20/2021

Justin B | 1/12/2022 9:40:10 AM

As someone who has worked in both the public and private sector and went through the alternate earnings appeal process at a school while GE was in place, I feel the overall fundamental problem with the previous GE rules were that they mainly affected for-profit private institutions, which seemed to be the Obama era thing was to attack for profit schools (which yes there are some bad apples, but you will find that in every industry). If GE were to be reenacted, I feel it should be an across-the-board approach and all programs at every school should be evaluated under any new rules to show that there is no bias based on what type of school you are or the programs you offer. Degree programs and certificate programs alike should all be viewed and determined if they can lead to gainful employment from both public and private institutions. GE was never taken too seriously by the public sector because most of their programs were never held to the GE standards and did not have to worry about losing their programs so an approach that evaluates all programs I feel would be a better outcome.

David S | 5/20/2021 3:57:08 PM

My comments might stand a little clarifying. While I don't think we should go in trying to abolish GE regs, it would benefit everyone (especially students) if we as a profession worked with ED and other constituents to arrive at something that's genuinely useful. But that Neg Reg table is going to be tough, and there will be some constituents at it who want to see major changes in higher ed. Arguing that we shouldn't have GE regs at all would make it very difficult to find common ground with those groups. And as Neg Reg goes, no common ground = ED can issue whatever regulations they want.

Ben R | 5/20/2021 2:26:30 PM

The problem with disclosure alone, as alluded to below, is that the very consumers it is meant to protect do not use it. Vulnerable groups, i.e. non-traditional students in particular, do not always make what we might call rational ROI decisions when it comes to higher education. Due to freely flowing aid from ED or the VA, they base it on things like ease of enrollment, whether they can live off their financial aid, and whether they can pass the classes while taking care of others, or while working full time. In other words, they often look at everything but academic quality or the likelihood of a good outcome. This does nothing for program integrity or sustainability.

If disclosure alone was working, we would expect that schools with abysmal outcomes (rock bottom graduation rates, low loan repayment rates, poor or unknown job-in-field placement rates) would have ceased operations in droves over the last several years of scorecard disclosures, but how many have? Are we to believe there are no schools with unacceptably poor outcomes?

If there is another way to ensure program integrity, lets hear it, but for the most part, GE was working for its intended purpose. How many really good programs closed because of GE?

Peter G | 5/20/2021 1:2:49 PM

From a community college's perspective, I'm going to respectfully but vehemently disagree with David.

The problem is not the intent of GE, which I generally support. The issue is that in practice it is a high-stakes bureaucratic mess, stemming from a number of underlying issues, not least the statutory framework that led to this being a bludgeon rather than a scalpel.

Between the disclosures, the reporting, and the interaction with ED we were spending well into the hundreds of hours of staff time on this per year, and what did it yield? Nothing. Disclosures that students don't read, and reporting data that either passed or, given the prevalence of small programs, just contained **.

GE is the equivalent of requiring every driver to take a 100 hour driving test to improve driving safety. Is it a bad idea in theory? No. But reality and theory are not one and the same. Raising the burden on schools that are compliant to identify a small percent of programs for elimination is not good practice.

Even for schools who don't see skin in this game, or who may only have 1-2 GE programs, this does impact nearly everyone. GE was at least one of the primary reasons from my POV that approval of new programs and other ECAR changes ballooned, because School Eligibility was tasked with enforcement of a range of GE issues as part of the approval process.

And of course, the next Republican administration will unwind this anyway, and we'll continue to painfully yo-yo down this road until Congress can compromise on something.

I agree with Jennifer and Jeff that at the least, ED needs to look more closely at the data it already has, and if it's going to expand, how can it do so with minimal additional burden.

Ben R | 5/20/2021 11:52:16 AM

I agree with the two comments below and do not think it is an unpopular stance outside of the schools that routinely leave students with untenably high debt/income ratios. GE Data is not primarily about informing the consumer, it is about holding schools accountable for poor outcomes, whether disclosed or not. Any administrative burden left after data sharing is enabled by the Future act should be minimal and is a small price to pay for nearly limitless loans with zero underwriting or skin in the game. If we are for program integrity, we need to be for reasonable standards in the loan program. "Access" alone cannot be the sole determinant of a program's success.

Coming up with an agreeable Debt/income ratio is no more arbitrary than setting the lifetime Pell limit, the undergraduate debt limit, or determining the income level for Pell and doesn't have to be any more complicated or contentious. Standards are a necessity, otherwise it becomes a wide-open race to the bottom cash grab. Either set a GE standard, or set reasonable or categorical loan limits to begin with so GE is not necessary, and we will live by it.

Jennifer S | 5/20/2021 11:28:23 AM

The combination of SULA and enrollment reporting data provide everything the department needs (coupled with what we know they can get from the IRS) for the Department to run and publish their own metrics on all programs across all institution types.

I agree that nothing good comes from resisting these measurements, whether people pay attention or not. But let's argue vociferously (via NASFAA) for having the Department of Ed do it in a much more efficient manner with the data in their possession.

Jeff A | 5/20/2021 11:22:20 AM

The College Scorecard IS a a database that is evolving to provide GE type data. Developing GE regs in the past was an arbitrary (and mostly capricious) exercise without any wholistic understanding or regard for program level post-grad salaries across all of higher ed. It was a way to, unfairly, penalize one sector that enrolls a very small percentage of students in higher education where often the success and employment rates are superior for underserved and adult students.
Let's not put the cart in front of the horse and see how far we can get with program level outcomes data in the Scorecard before we talk about regulating with arbitrary metrics. Realized the Scorecard data is a public database that can be used to develop some incredibly powerful applications to help the public make more informed choices. It doesn't have to all be done by ED.

David S | 5/20/2021 9:59:57 AM

My admittedly unpopular take - fighting against GE regulations erodes public trust in higher education and we shouldn't do it. How many or few students use the information doesn't matter to ED; I once asked them in a conference session on the College Scorecard what tools they had to assess whether the tool was being used for its intended purpose and whether or not it had any impact on college enrollment decisions. They acknowledged that they had no plan to assess it; the best they could do was count the number of visits to the site, which tells you nothing.

But more importantly, arguing against GE makes us look like there's info we don't want students to know. There isn't a human being alive outside a Financial Aid Office who spends any amount of time worrying about the administrative burden on us, so I don't anticipate that argument swaying anyone either. We've used it 1001 times for other things to no avail whatsoever.

College is not job training, and no legit school ever says "we promise that if you enroll here, you'll get this job and it will pay this much." Unfortunately, runaway price tags - not entirely colleges' fault - have left students/families/lawmakers (especially lawmakers, who share fault in this) demanding that we prove that we're worth the cost, and they use employment as the measurement. Had costs to students and student loan debt been held in check, we wouldn't be having this conversation.

Joel T | 5/20/2021 8:49:45 AM

With any luck, NASFAA will represent the aid profession as a whole and come out against the re-implementation of GE. Everyone that is a member will attest that the last regulations were nothing but a huge administrative burden and you could probably count the number of people on one hand that used the information that was produced.

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

Let's Talk: Financial Value Transparency and Gainful Employment


Let's Talk: Financial Value Transparency and Gainful Employment: Let's Talk: Financial Value Transparency and Gainful Employment


View Desktop Version