What Will Happen If We Reinstate the Gainful Employment Rule?

THIRD WAY

Michael Itzkowitz, Shelbe Klebs

February 10, 2022

In January, the US Department of Education (Department) began a negotiated rulemaking process to determine which career education programs—certifications or degrees like those that prepare students to become auto mechanics, elevator technicians, or medical assistants—are worthy of federal funding due to their ability to provide “gainful employment” opportunities to those who attend. Designed to ensure that taxpayer-funded career education programs leave graduates earning a high enough income to reasonably pay down the debt they must accrue to attend, the Gainful Employment (GE) rule was finalized in 2014, and the first results on program performance were released in 2017. Unfortunately, the rule was rescinded by the Trump Administration in 2019 before it was ever fully implemented and enforced.

The 2017 data that was released before the DeVos Department scrapped the rule showed that about 750 college programs left graduates earning too little and owing too much; many even resulted in poverty-level wages. Now, as the Department continues to debate reinstating the next iteration of the GE rule, it’s worth asking the question: what if the rules were enforced today in the same manner as they were intended in 2014? Which types of programs would fail the GE test now, and which would pass?

To get a glimpse of this potential impact, we ran an analysis of the Department’s new program-level data. The results give us an indication of how different program types may fare today if subjected to the rule finalized eight years ago.

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