The Chronicle of Higher Education: Negotiators Offer Proposals Ahead of 2nd Session on ‘Gainful Employment’ Rule

November 5, 2013

by Nick DeSantis

The U.S. Department of Education has posted online a series of proposals submitted by negotiators who are seeking to shape its revised “gainful employment” rule, ahead of a negotiating panel’s second formal gathering, set to take place this month.

A federal judge last year struck down the department’s previous version of the controversial rule after the Association of Private Sector Colleges and Universities, the main trade group representing for-profit colleges, challenged the regulation in court. In August the department released draft language for a new version of the rule, which would penalize career-oriented programs whose graduates struggle to repay their student loans, as defined by two benchmarks—a debt-to-income ratio and a debt-to-discretionary-income ratio.

The panel of negotiators began working to revise the rule in September, and the group is set to resume those talks on November 18.

The documents posted by the Education Department describe proposals in several areas of the gainful-employment talks, including the approval of new programs, program-level cohort default rates, and other topics.

Meanwhile, a paper released on Tuesday by the New America Foundation lays out its own set of proposals for improving the gainful-employment rule. The paper calls the department’s proposal a “generally solid way to leverage governmental oversight to encourage these programs to improve,” but says that its own suggestions would “close some important loopholes and ensure that students enrolling in programs can expect at least some minimum returns for their investments.”

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