Gainful Employment

On July 1, 2019 the U.S. Department of Education (ED) officially rescinded the Obama-era gainful employment regulations, which penalized some higher education programs that graduated students with too much debt relative to their earnings. 

In announcing the decision to formally repeal the gainful employment regulations, Secretary of Education Betsy DeVos referred to their efforts to add more information to the federal College Scorecard, saying, “All schools should be clear and transparent about their outcomes and all students should have a full range of information available. We’re committed to making that happen.”

While our membership has always agreed with its stated aim – to ensure that students enrolled in certain higher education programs receive a quality education that adequately prepares them for gainful employment – we have always questioned the relevance of the metrics the regulation relies on to assess program value, arguing that they are unrealistic and politically biased.

As the following video succinctly explains, the way in which the Gainful Employment Rule metrics were designed did not distinguish between poor- and strong-performing programs by measures that you would expect. For example:  There’s a well-respected, highly competitive fine arts college in New York City that happens to be a for-profit. It has a high graduation rate (66%) and a low student loan default rate (7%), which are undeniably exemplary outcomes. However, because its graduates pursue creative and fine art careers that simply do not pay a lot in the first few years after graduation, its programs would not have passed the regulation. The metrics did not consider student outcomes; they focus solely on loan metrics. So, although nearly every fine arts program in the country would have failed the GE Rule, only for-profit college programs would fail and be shut down because they were the only institutions subject to the GE Rule.

The Association of Proprietary Colleges applauds the US Department of Education’s efforts and believes that the NY model of treating all sectors of higher education equally should be applied at the federal level.  Student debt challenges and weak graduation outcomes – especially for low-income students – are pervasive across the higher education landscape. Clear policy guidance and strong enforcement across all sectors of higher education is the best way to improve student outcomes and protect American taxpayers.

Statement from APC regarding changes to GE regulations




Gainful Employment's Failing Grade