Published on 2013/05/24

Gainful Employment Debate Continues

A new chapter was added to the gainful employment saga last week after the United States Department of Education hosted the first of four hearings for different interest groups to voice their concerns about changes to the rule. The hearings are being held in anticipation of negotiations which are expected to begin in the fall.

The original definition of gainful employment, published in 2011, meant that federal funding for student aid would be cut from post-secondary programs where graduates are known to have lower loan-repayment rates and higher debt-to-income ratios. However, a core element of this rule was blocked by a federal judge in a 2012 ruling, arguing that the Department of Education did not adequately justify its definition of reasonable debt-repayment levels.

For-profit institutions are encouraging debate of the rule to be dropped or postponed until the Higher Education Act, the primary law governing student aid, is reinstated by Congress.

However, advocates of the rule are encouraging the Department of Education to make minimal changes to the original policy. Namely, representatives of veteran organizations as well as student groups told the hearing, held in Washington D.C., the original definition of gainful employment should stay intact.

“The concerns the court raised can be easily addressed,” Anne Hedgepeth, government-relations manager for the American Association of University Women told The Chronicle of Higher Education. “There is no reason to weaken this rule.”

Community college representatives have been vocally critical of the entire process, arguing that the tight guidelines required by the U.S. Department of Education, and the approach of the Department in general, has been a huge burden for institutions.

“This process has been a debacle for community colleges,” David S. Baime, senior vice president for government relations and research at the American Association of Community Colleges, told The Chronicle of Higher Education. “We believe the department has acted insensitively and irresponsibly.”

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