Center for American Progress

Department of Education’s “Gainful Employment” Rule Is Important

Department of Education’s “Gainful Employment” Rule Is Important

The Department of Education should require career colleges to prove their programs are effective and financially reasonable.

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The Department of Education is about to unveil its long-awaited regulation for career-education programs known as “gainful employment.” The rule would exclude career-education programs from receiving federal student financial aid if they fail to meet certain debt-to-income and student loan repayment measures.

For-profit colleges are aggressively contesting the regulation, waging a fight both in Washington and in the media. But gainful employment is not only about for-profit colleges such as the University of Phoenix or Kaplan University. And the debate about its contents shouldn’t be ruled by for-profit institutions. The gainful-employment regulation is about something much bigger than that. It’s about the price of college being so high that individuals have to mortgage their futures to pay for it, and yet we know very little about what they get for their money.

Gainful employment is a response to an emerging issue in higher-education policy. Simply put, we need to get more students into and through college. The workforce of the future requires more Americans with postsecondary education. To achieve this, the federal government must get the most out of its investment in higher education through student financial aid. And with students and families bearing an increasing share of the cost of college, they should be getting something from their investment, too.

The problem is that in our higher-education system, individuals and the federal government bear all of the financial risk of higher education but colleges have most of the control over the price, quality, and outcomes. In essence, colleges are in the driver’s seat but students and taxpayers are paying for the gas. This would not be an issue if prices were low and graduation rates high, but in fact just the opposite is true.

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