On July 1, the U.S. Department of Education (ED) announced its final regulation to officially rescind the 2014 Gainful Employment (GE) Rule beginning on July 1, 2020.
Federal law requires that certain educational programs offered at some postsecondary institutions, including for-profit institutions, community and technical colleges, and area CTE centers, must provide training programs that prepare students for “gainful employment in a recognized occupation” in order to participate in federal financial aid programs. Nearly all educational programs at for-profit higher education institutions, as well as non-degree programs at public and private nonprofit institutions, like community colleges and area CTE centers are subject to these rules.
The Obama-era regulation outlined how the department will evaluate a program’s effectiveness in preparing students for gainful employment after program completion, including through metrics like debt-to-earnings ratios and student loan cohort default rates. Moreover, it set requirements for programs to make certain performance and outcomes data, including program costs, earnings information and completion rates, available to the public.
Critics of the regulation, including Senate HELP Committee Chairman Lamar Alexander (R-TN) and House Ed & Labor Committee Ranking Member Virginia Foxx (R-NC), believe that the rule discriminates against programs based on their tax status. The overwhelming majority of programs covered under this rule are located at for-profit institutions, but it also includes certificate programs offered at private non-profit and public institutions. The PROSPER Act, the 2017 House Republican Higher Education Act alternative, would have not only repealed the rule, but would have prohibited future ED Secretaries from enforcing GE regulations.
Proponents of the regulation, including HELP Ranking Member Patty Murray (D-WA) and House Ed & Labor Chairman Bobby Scott (D-VA), argue that the rule is necessary to ensure students are protected from predatory programs and fully understand their educational options before taking on student loan debt.
ACTE believes that the Department should enforce rules to appropriately hold programs accountable, while acknowledging that high-quality postsecondary CTE programs are an affordable option for many students and should not be unduly burdened, as was a concern under gainful employment regulations.
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