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DeVos to Repeal Gainful Employment Rule

Friday, August 10, 2018

WASHINGTON, D.C. – Today, U.S. Department of Education Secretary Betsy DeVos announced her plan to repeal the Gainful Employment (GE) rule which would hold career education institutions, especially for-profit colleges, accountable for their costs and actual student outcomes. The GE rule, which went into effect in 2014, was based on the simple, practical premise that a program should enable its students to earn enough money to pay back the debt required for its completion.

Since 2017, the for-profit college industry has heavily lobbied the agency to rescind or weaken the GE rule as well as other mechanisms that would require them to take actions to protect students instead of profits. Last winter, the Center for Responsible Lending (CRL) participated in a negotiating process with the Department of Education on the rule. CRL feels that the rule should be allowed to work as originally intended, flagging worthless programs that leave students with debt that they cannot repay and stripping federal funding eligibility for programs that do not improve.

The Department of Education will have to seek public comment on the proposed repeal after its publication in the Federal Register.

CRL Counsel Ashley Harrington released the following statement:

Betsy DeVos’ decision to rollback this important protection will leave students vulnerable to the poor training provided by for-profit colleges and cripple them with debt that they will never be able to repay. The Gainful Employment rule was originally proposed in response to the thousands of for-profit students who incurred deep student loan debts in pursuit of a career and skills that would provide promised employment and earnings that never materialized. Years ago, education and consumer advocates heralded the rule’s development and the program-level accountability it was intended to deliver.

For-profit colleges aggressively market their education programs and, in many cases, fail to provide a useful education to the students they enroll. These institutions target low-income students, students of color, and military servicemembers, who disproportionately bear the costs of for-profits' high costs and poor outcomes. Because of DeVos’ cozy relationship with this industry, low-performing programs will continue to operate and ensnare hopeful students into assuming large debt with little hope of repayment. This will cost students and taxpayers almost $5 billion over the next decade, profits that will land almost exclusively in the hands of the for-profit college sector.

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Ricardo Quinto at ricardo.quinto@responsiblelending.org.