New Jersey to Implement Its Own Gainful Employment Standards for All 'Career-Oriented' Higher Ed Programs

By Hugh T. Ferguson, NASFAA Senior Staff Reporter

For more than 10 years, the higher education community has tussled with developing a federal gainful employment standard. While the debate continues at the federal level, at least one state is taking action to implement its own gainful employment standards.

A recently enacted law in New Jersey will require state agencies to develop their own gainful employment (GE) standards for “career-oriented programs of study” offered by postsecondary institutions that will enable the state to revoke a school’s license to award academic degrees should they fail to meet the required success rate.

Specifically, the law requires the state’s Office of the Secretary of Higher Education (OSHE) and Department of Labor (DOL) to establish, within one year of the law’s enactment, performance quality standards for credit- and non-credit-based career-oriented programs at all postsecondary institutions, including two- and four-year public colleges, private non-profit independent institutions, and proprietary institutions.

According to the governor’s office, the law will “set standards based on the ratio of the program’s tuition compared to the typical earnings of the specific, identifiable occupation for which the program is designed to prepare students.”

At the federal level, GE regulations have been delayed until April of 2023, which means the earliest the Department of Education's (ED) regulations can take effect will be July 1, 2024. New Jersey’s regulations will take effect July 29, 2023 — one year after their law’s enactment date.

“By establishing performance quality standards for career-oriented education and training programs, we will guard students against unreasonable student loan debt that they simply cannot repay with the typical wages in the career for which they studied,” said Gov. Phil Murphy, a Democrat. “This is an important step I am proud to take as my Administration continues our work of making higher education more affordable for everyone in our state.”


Publication Date: 8/9/2022

Peter G | 4/10/2023 1:0:27 PM

As much as I've come to oppose ED's version of GE, I still think the core concept is solid. The challenge in practice is finding something that, well, works.

And by that I mean it has to be targeted, efficient, and impactful. One can argue that the federal version has had impact in terms of program closure, though I'm less convinced that impact will be sustained after an initial cleanout, but it's not clear to me that the disclosure system worked at all in terms of impacting student behavior.

The prior (and likely coming) versions of federal GE, however, have been somewhat too broad and incredibly inefficient. The reporting process is incredibly clunky, and the output is pretty mixed (consider the large number of small programs where the output for all that labor is just a series of '***' fields).

Easy for me to say since I'm not in NJ, but I think there actually could be something of benefit to the 'state laboratories' concept. Certainly in many states these programs are already going through some sort of state review and licensure, and the states may be in better position to find meaningful inflection points. Whether this current approach is the answer, I'd be more comfortable with my own state going down this road than the federal version 3.0 we're expecting.

Zach G | 8/9/2022 1:22:13 PM

Is there any assessment of whether the law has implications for IHE's in other states who are enrolling students from New Jersey?

David S | 8/9/2022 10:14:47 AM

Catch 22. On one hand, we all know that no legit college has ever said "complete this program and we guarantee you'll get a job making x dollars." Yet that's a standard we're held to despite never promising it. We don't control the job market or have any impact on what an employer decides to pay its employees. And of course salary is typically measured at the very beginning of the graduate's career, when their earning potential is at its lowest because they have little experience and no seniority.

On the other hand, we oppose this at the risk of making it look like we're trying to hide something.

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