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As Biden Administration Takes Hold, Some Speculate on the Return of Gainful Employment

As Biden Administration Takes Hold, Some Speculate on the Return of Gainful Employment


Hugh T. Ferguson, NASFAA Staff Reporter

January 8, 2021

President Joe Biden has used the first few weeks of his term to reverse a number of policies implemented by the previous administration, but now with Cabinet positions beginning to be filled, agencies staffed, and Congress working through the legislative process, more far-reaching policies could be coming to the forefront.

One particular area of interest is gainful employment regulations, which were first proposed and finalized during President Barack Obama’s administration — first in 2011 before essentially being gutted when a federal judge said the core of the rule (a debt-to-income ratio) was developed arbitrarily, and again in 2014 — and then rescinded during President Donald Trump’s term through the regulatory process.

See NASFAA’s Coverage of the Negotiated Rulemaking Process for Gainful Employment

Those regulations, as finalized in 2014, aimed to ensure that higher education institutions improved their employment outcomes for students in non-degree-granting programs and programs at for-profit institutions — or risk losing access to federal student aid.

However, the regulations were highly criticized since their inception. For example, some argued that they unfairly targeted for-profit institutions and should be expanded to include all institutional programs, while others complained the reporting requirements and alternate earnings appeals were too burdensome for institutions.

Former Education Secretary Betsy DeVos rescinded the regulations, basing the decision on “research results that undermine the validity of using the regulations’ debt-to-earnings (D/E) rates measure to determine continuing eligibility for title IV participation,” as well as feedback that the reporting requirements included in the regulations were too burdensome for institutions.

Though NASFAA ultimately supported the concept of  gainful employment, the association was highly critical of a flawed rollout and implementation process, and has said that the responsibility of defining gainful employment should fall to Congress.

NASFAA, prior to the Department of Education’s (ED) 2018 rescission of the regulation, advocated that the challenges presented by the shaky rollout were not insurmountable and should not lead to a complete rescission of the rule.


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