Gainful Employment

The GE rule has been the subject of multiple rounds of negotiations and rulemaking at the federal level. A rule put in place by the Obama administration elevated concerns about the prevalence of low-quality, high-cost career programs in the for-profit college sector. That rule set the standard that program completers should not have student debt balances more than 8 percent of their overall income or 20 percent of their discretionary income. 

Community colleges and public institutions offered 61 percent of the programs covered by the 2014 GE Rule, while for-profit institutions offered only one-third of covered programs. But for-profit colleges offered 98 percent of the programs that failed the rule’s accountability measure; they could not demonstrate their graduates earned enough to cover the debt they took on to attend.

Under Secretary Betsy DeVos, the Trump administration ultimately rescinded the GE rule. Doing away with the GE rule removed an essential protection for students and a backstop to ensure career program quality. 

Shortly after taking office, the Biden administration began an extensive public comment and negotiated rulemaking process to reinstate the GE rule. The Education Department ultimately finalized a rule that included both the previous debt-to-earnings measures and an additional requirement for programs: an earnings premium showing most program completers earn more than the median earnings of people in the workforce with a high school diploma as their highest educational credential.

The addition of an earnings premium to the GE rule raised the bar for program accountability and aligns with the baseline expectation that students who pursue postsecondary career training programs should not find themselves worse off financially than if they only held a high school diploma.

The GE rule acts as a critical protection for Black and Latino students, who are disproportionately enrolled by the for-profit sector and saddled with high levels of debt as a result. Black and Latino students account for nearly half of all students at for-profit schools yet only one-third of all undergraduate students. Nine out of 10 Black and Latino students who graduated in 2015-16 from a for-profit undergraduate degree program borrowed, and they borrowed at least $10,000 more, on average, than those attending public colleges.

Despite the need for the GE rule’s baseline protections, several for-profit entities have brought legal challenges to block its implementation. Separately, the Department of Education has extended the deadline for institutions to report data to inform GE metric calculations from summer 2024 into the early part of 2025. As a coalition, we will continue to advocate for full and timely implementation of the GE rule as an essential assurance of program quality and student protection.

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