Little love for gainful employment

David Baime of the American Association of Community Colleges briefly outlines some of the challenges in implementing federal gainful employment regulations during an Education Department hearing on Monday. (Photo: Matthew Dembicki)

Federal gainful employment (GE) regulations were largely designed to ensure that for-profit institutions were not burdening students with loans that they could not repay, given their educational experiences and other factors.

But the regulations, which were developed during the Obama administration, have spawned much malcontent.

The U.S. Education Department is formally revisiting the regulations through a new “negotiated rulemaking” process. During an initial “negreg” launch hearing on Monday, many speakers in their allotted five minutes said that the rules were overly burdensome, costly and confusing.

Although the GE regulations were generally considered to be targeted at poor-performing for-profit institutions, all Title IV-eligible certificate programs at community colleges also fall under the rules.

Community colleges were initially enthusiastic about the regulations as a way to “tighten up accountability,” but they have felt overburdened since the rules have been implemented, said David Baime, senior vice president for government relations and policy analysis at the American Association of Community Colleges (AACC).

Ideally, Congress would set policy in this area, but that’s not realistic in the near future given the current political climate, so AACC hopes the Trump administration will simplify the implementation and make the regulations more efficient, Baime said. Under certain circumstances, AACC could support the rules, he said.

The GE statute, which Congress passed in 1972, was not intended to provide consumer information on such programs, Baime said. AACC has proposed alternative ways to gather needed data on all college programs as part of its recommendations to reauthorize the Higher Education Act.

“There are more efficient ways to get the information,” Baime said.

Representatives from for-profit career colleges at the hearing had similar criticisms, noting the 800-pages of regulations and some 100-plus communications from the department about the GE regulations. They added that the for-profit “bad actors” are no longer in business, and the rules now only hurt smaller for-profits with good track records.

Other speakers noted that if the concern is about students taking on too much college loan debt, perhaps the federal government could do more to curb over-borrowing. One suggestion was to allow colleges more leeway in counseling students about student loans. AACC is advocating for institutional flexibility to reduce student loan amounts in defined, selected circumstances.

Monday’s hearing is part of the negotiated-rulemaking process, which will bring together interested parties to try to re-draft the regulations. If consensus is reached, ED must issue a proposed rule that reflects the consensus. If a compromise is not reached, the department has the authority to develop the regulations on its own. Given how contentious GE is, many education advocates feel that the department is already heading down that path, knowing that agreement will be almost impossible to attain.

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