New, Stronger Gainful Employment Regs Released

Inside Higher Ed

Katherine Knott

May 18, 2023

About 5 percent of programs required to prepare their graduates for gainful employment would fail the Biden administration’s new rule, Education Department data released Wednesday evening show. The affected programs, many of which are at for-profit institutions, risk losing federal financial aid.

The Biden administration released its long-awaited gainful-employment rule Wednesday evening as part of a 1,000-page package of regulations that also includes rules on financial responsibility, administrative capability, certified procedures and ability to benefit. The rule is similar to what the administration proposed last year during negotiated rule making; it requires programs to show that graduates can afford their yearly debt payments and that they are making more than an adult who didn’t go to college.

The department said the gainful-employment rule would protect more than 703,000 students per year “from attending these failing career training programs.” The regulations apply to programs at for-profit institutions as well as nondegree programs in any sector.

“Today the Department of Education is proposing the strongest protections against unaffordable college debt in history,” Secretary Miguel Cardona said during a press briefing. “Investing in a college degree or career certificate is supposed to pay off. Instead, too many students are getting ripped off.”

The rule, he said, would help ensure that the country has a higher education system that’s affordable and accountable to students. The department wants to create a new website that will track a range of data on all college programs—not just those covered by gainful employment. That website would include new information on the program costs, student debt and earnings of completers, among other data points.

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