Another Change to ‘Gainful Employment’ Regs

The Education Department announced Tuesday that it intends to make the approval process easier for new programs that fall under the department’s controversial and oft-debated "gainful employment" regulation.

The change, announced in a notice of proposed rulemaking in Tuesday’s Federal Register, would ease the approval process for new vocational programs, requiring fewer new programs than are currently required to obtain approval from the Education Department before operating. The current requirements for starting new programs, established in the final regulations published in October 2010, mandates that an institution notify the department before offering a new program that would fall under the regulations — one that leads to gainful employment in a recognized occupation. The department would then have the option of telling the institution that it needs approval to establish the program.

The new rule would be considerably less stringent, requiring an institution to apply to the department only if it was starting a program that was the same as, or "substantially similar to," a failing program that the institution discontinued — whether voluntarily or because it became ineligible for financial aid under the gainful employment rule — or to a program that was currently failing.

The current regulation was intended to be temporary — the notice refers to it as an interim requirement — to avoid the possibility of institutions opening new programs to slip under the wire before the gainful employment rule takes effect in July 2013. So the change did not come as a surprise to many on each side of the debate on for-profit institutions, although it’s unusual for the department to change the rules so soon after they were made.

The department had always intended to change the notification and approval process, spokeswoman Sara Gast wrote in an e-mail. "We always said that those regulations were an interim measure until the final gainful employment rule was issued," Gast said. The rules were changed now, rather than when the final gainful employment rule was issued in June, because the Education Department wanted the July 1 effective date for other program integrity measures to pass.

Even some frequent critics of for-profits had said that the approval requirement should be limited. In their original comments on the notice of proposed rulemaking for the "gainful employment" rule, the Institute for College Access and Success, Campus Progress, U.S. Public Interest Research Group and others that were generally critical of the rule said that new programs should require approval only at institutions with restricted or ineligible programs. Doing so "provides a stronger incentive for institutions to keep all of their programs fully eligible for federal aid, and reduces administrative burden for institutions that have a strong record of preparing students for gainful employment," the groups noted.

Representatives of for-profit education companies said the proposed changes were positive, although they are still studying them to determine what, if any, feedback they will provide during the 45-day comment period. "We’re going to look for clarification in some areas, but generally think the direction they are taking makes sense," said Mike Buttry, vice president for corporate communications at Capella Education Company.


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