Scholarship News

Gainful Employment Giving Way to "Transparency for All Colleges"?


August 14, 2018 10:31 AM
by Susan Dutca
Department of Education Secretary Betsy DeVos is repealing an Obama-era regulation that forced for-profit colleges to prove that the students they enroll are able to attain gainful employment. The rule was created to police and punish for-profit college programs that left graduates with heavy debt compared to their incomes.

Department of Education Secretary Betsy DeVos is repealing an Obama-era regulation that forced for-profit colleges to prove that the students they enroll are able to attain "gainful employment." The rule was created to police and punish for-profit college programs that left graduates with heavy debt compared to their incomes.

According to DeVos, the Obama-era rule was not "backed up by research and created burdensome reporting requirements for schools." Rather than punishing schools, her department plans to "give more information to students by publishing earnings data for programs at all colleges and universities, not just those in the for-profit industry." Instead of "targeting schools simply by their tax status," DeVos is working to ensure that students have "transparent, meaningful information about all colleges and all programs."

The Obama administration's crackdown on for-profit colleges was fueled largely by complaints of fraud against chains such as Corinthian Colleges and ITT Technical Institute, according to PBS. Under the 2014 gainful employment rule, "college programs could be cut off from federal funding if the average debt ratio of their graduates stayed above a certain limit for two out of three straight years." Furthermore, schools were required to publicize debt and earnings data for their programs, which steered students away from programs with poor outcomes.

Critics of the proposal call it "outrageous and irresponsible," and that the administration appears to have "little interest in protecting students or taxpayers from excessive, unaffordable student debts." On the other hand, the for-profit industry, which took a hit and suffered plunging student enrollment since the tightened regulations, is optimistic with the rollback. The news is welcomed by proponents who believe that now is the time to "establish a uniform commitment to transparency of outcomes that can stand the test of time."

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