Department of Education Rulemaking to Define ‘Gainful Employment’
Published: February 4, 2014
With America’s student debt now more than $1 trillion dollars and still growing, many borrowers face the likelihood of delaying their ability to begin their own households, or buy either a home or a vehicle. Further, in a tight job market, many new graduates are financially challenged to begin repayment even with their acquisition of marketable skills. For students that enrolled in predatory career education programs, onerous debt is incurred without an accompanying set of marketable skills or license to begin a new career.
It is against this backdrop that the Department of Education (DOE). DOE is charged with rulemaking to define ‘gainful employment.' A negotiated rulemaking panel convened by DOE in 2013, failed to reach consensus despite having input from consumer groups and the for-profit college industry. As a result, DOE must now craft its rulemaking set to be finalized by November 1, 2014 and later go into effect by July 1, 2015.
Feb 4, 2014 Comment Letter
A coalition of over 50 organizations with diverse memberships and interests are united in advocating for Department of Education rulemaking that addresses predatory career education programs. On February 4, this coalition detailed their shared hopes for reforms in a letter to President Obama that identified specific reforms. Key among those recommendations were repayment rates, debt-to-earnings standards, and a process to deny federal financial aid from programs that fail to offer graduates eligibility for licensing examinations.
Sep 9, 2013 Memo
CRL offered the Department of Education several recommendations related to its gainful employment rulemaking. Specific concerns were expressed for repayment rates and industry practices. Citing applicable case law and related regulatory actions by other federal agencies, CRL called for repayment rates that would apply to all students, regardless of whether they matriculated or not. CRL also called for an accountability metric to ensure that federal financial aid was being used for gainful employment.