The Gainful Employment rule that took effect in 2015 and was rescinded by the DeVos Department of Education in 2019 identified specific career programs offered by colleges that routinely left graduates with unaffordable debts. The rule worked: schools lowered tuition, increased scholarships and offered free introductory periods.
Despite that, after failing to enforce the rule, the Department eliminated the rule in 2019 at an estimated cost to taxpayers over $6 billion. Graduates of programs that failed gainful employment test (those that could not average graduates earned enough to repay their debt) owe nearly $7.5 billion in student debt they are unlikely to be able to repay
The GE rule was based on a simple idea: typical graduates need to earn enough to afford to repay their loans. The rule required any program where typical graduates’ debts exceed both 8 percent of their total income and 20 percent of discretionary income to improve or lose access to federal financial aid.
Gainful Employment Media Coverage
- California AG sues Betsy DeVos for overturning Obama-era rule aimed at for-profit colleges Yahoo! Finance March 18, 2020
- ‘It’s ruined my life’: Academy of Art ex-student owes $431,000 and has no job San Francisco Chronicle February 18, 2020
- National teachers union sues Education Secretary Betsy DeVos for repeal of student protections NBC News January 23, 2020
- Teachers Union Lawsuit Claims DeVos ‘Capriciously’ Repealed Borrower Protections NPR January 22, 2020
- Career training regulations protect students and taxpayers. But the Trump administration is abolishing them. The Washington Post July 1, 2019
Gainful Employment Posts
- What to Know About the Gainful Employment Rule
- State by state debt for graduates of programs that failed GE
- Legal challenge to DeVos repeal of the GE rule
- Same Program, Different Results: Better Options Exist for Students in the Worst-Performing Gainful Employment Programs
- The Gainful Employment Rule and its Importance to Veterans