Department of Education Repeals Gainful Employment Regulations
July 01, 2019

​​​​The U.S. Department of Education (ED) on Friday officially rescinded the Obama-era gainful employment regulations, which penalized some higher education programs that graduated students with too much debt relative to their earnings.

The move, which as The Washington Post reported was long-expected, follows ED’s proposal last year to repeal the regulations. ED missed a deadline to repeal the regulation last year, meaning the rescission technically takes effect July 2020. But in the meantime, as The Post noted, the department has not been enforcing them.

The New York Times reported that ED officials have argued that transparency, not regulation, is the best way to hold all schools — public nonprofits, community colleges, and for-profits — accountable for their results.

In announcing the decision to formally repeal the gainful employment regulations, Secretary of Education Betsy DeVos referred to changes to add more information to the federal College Scorecard, saying, “All schools should be clear and transparent about their outcomes and all students should have a full range of information available. We’re committed to making that happen.”

But ACE and 21 other higher education groups submitted comments in September 2018, advising ED to revise rather than eliminate the existing gainful employment regulations.

The 2014 regulations, while not perfect, addressed a serious problem and targeted where the abuse occurred and where the department had clear statutory authority to act. ACE’s comments, submitted by Senior Vice President Terry Hartle, stated that using statutory authority to take administrative actions to curb documented patterns of abuse is a necessary and appropriate role for the department.

As the ACE comments letter noted, “We oppose the department’s proposal to rescind, instead of revise, the existing gainful employment regulations, and do not believe that simply replacing them with additional disclosures on the College Scorecard at some point in the future serves the interests of students, institutions, or the public. While data and transparency are useful tools and have the potential to improve the higher education marketplace, they are not a substitute for the sanctions provided by the gainful employment rule.”

Reacting to the official notification that the regulations are being rescinded, Hartle said Friday that, “Underp​erforming institutions need to be held accountable and students must be protected. This is a huge step in the wrong direction.”

Hartle also noted that the department has acknowledged that eliminating the gainful employment regulations will cost taxpayers $6.2 billion over the next 10 years, adding that he also believes this will leave millions of students worse off. To read his full statement, click here.