THE HILL'S CONGRESS BLOG: Legitimate backlash to the DoEs 'gainful employment' rule

THE HILL'S CONGRESS BLOG

By: Robert Herzog

It has to be difficult for policy makers to admit failure, especially when Congress has soundly rejected misguided proposed regulation.   

But when a group of 118 lawmakers of both parties urge you to re-evaluate your policy; when leading advocacy groups and Members of the Congressional Black and Hispanic caucuses voice their opposition; when your department is investigated by the inspector general for possible corruption; and when you are forced to make statements correcting erroneous data – maybe, it’s time to admit your blunder and start again.

So what policy could be so ill conceived as to warrant such a backlash? 

The U.S. Department of Education’s so-called “gainful employment” rule. The policy will all but ensure the destruction of certain specialty training programs at private sector colleges and universities, a reduced number of college graduates in the United States and fewer Americans prepared to enter the ever-competitive 21st Century workforce. By forcing programs at private sector colleges to adhere to archaic and bureaucratic formulas based on students’ future debt-to-income ratios, the Department of Education will block financial aid to those who rely on these institutions most – minorities, military veterans and working adults.

The measure was originally blocked in the House of Representatives with strong bipartisan support. Members passed an amendment that would have blocked funding for the Department of Education to implement the harmful regulation. But, ultimately the language stopping the “gainful employment” rule was not included in the final budget deal negotiated in early April.

And that brings us to the current backlash from lawmakers and advocacy groups. So why is there such a heated response to a regulation that received relatively little attention during the recent budget showdown?

For one thing, the Department of Education’s rule is based on its own faulty data and a Government Accountability Office report that turned out to be rife with unfair allegations. By its own admission, the Education Department incorrectly calculated default rates from career college graduates, forcing the department to recalculate its data after the rule had already been written. Additionally, the GAO released a report last year on which the Department of Education based its initial findings. That report has since been proven inaccurate after the GAO was forced to revise substantial factual errors.

Then, just last week, the Education Department’s Inspector General opened an investigation into the role Wall Street short sellers played in the “gainful employment” rule. As the Daily Caller reported, “The investigation could reveal the extent to which the investors, who are hoping to profit when the [colleges’] stock goes down, influenced the process or received advance knowledge about regulatory actions by the department.”

Justifiably, the news outraged many. In a letter to President Obama, 118 Members of Congress from both sides of the aisle expressed disappointment in the regulation and urged the administration to withdraw it. Lawmakers pointed out that the “gainful employment” rule “will disproportionately affect the most disadvantaged of students and limit access to one of the few sectors of higher education that continually evolves to meet workforce needs.”

Americans for Democratic Action – a progressive advocacy group known for its advocacy of left-of-center causes – followed suit by announcing its opposition to the regulation, saying the rule “could place a significant roadblock in front of millions of students” seeking higher education opportunities.

When a policy causes harm to the very people it is intended to protect, it is time to re-evaluate. When that same policy is based on flawed data, erroneous reports and the potential influence of Wall Street executives seeking a profit, it is clearly time to reassess our priorities and start again. Students in higher education across America deserve better.

Robert Herzog is the chief financial officer of Harrison College, a member of Student Access, Student Choice, which is a coalition of career colleges opposed to the Department of Education's "gainful employment" proposal.