Blog: Funding Key To Weakening ‘Gainful Employment’ Rule

By Kevin Kuzma, Editor

The task meant creating doubt about a critical sector of higher education, then wrestling funding away by creating even more governmental red tape. In that sense, the overlying themes in this year’s attack on "for-profit" schools were two factors common to most political scenarios: money and control.

The Department of Education proved it was game for the challenge in 2010 with its "gainful employment" rule and the carefully executed plan supporting it. Early last year, there were elected officials on Capitol Hill and many Americans — maybe even most Americans — who weren’t familiar with "for-profit" schools or "career colleges." To them, higher education was all the same: an investment that hopefully led to a career, be it in engineering, elementary education, English literature, or heating and cooling.

The last year has clarified the types of education available to the masses, and for the most part, we’ve learned from the government’s perspective that the most distinguishing characteristic is not in the schooling itself, but rather how the schools’ programs are funded. The Department of Education’s gainful employment push changed the way higher education and for-profit schools in general are perceived with what seemed like nearly daily negative news reports. The majority of the reporting portrayed for-profits schools as the uncaring profiteers of federal financial aid dollars that cast hard-working people into mountains of debt they couldn’t possibly repay.

Money, as it often tends to be, was the bottom line on the higher education battle front. And, as the Department of Education comes closer to pushing through its new rule to restrict financial aid allotments to for-profit schools, money might also be the means by which gainful employment gets shot down.

In the coming weeks, with most industry experts expecting gainful employment to be approved in close to its original form, the possibilities surrounding gainful employment will become real. By the end of January, we’ll begin to see what actions the new Republican-led Congress will take to minimize the rule’s impact. The for-profit sector, billed to be in the fight of its life, will find out exactly how many opinions its lobbying efforts changed. The number should prove to be substantial.

According to a survey conducted by the research firm Dutko Worldwide, about 82 percent of key Washington insiders expect the Republican House to try and stop the gainful employment regulation. So the sector has rightfully pinned its hopes on the Republican Party. The GOP doesn’t fear organizations with for-profit motives, and has been by and large more sympathetic to for-profits. The Republicans have already argued for a level playing field where student debt measures are applied to all postsecondary schools, not just for-profits.

The GOP’s position on the gainful employment issue will be set by the incoming Republican chairman of the House Education Committee, John Kline of Minnesota. Kline said earlier this month that he hopes the Department of Education would lighten the final language of the gainful employment rule.

The House’s actions to attempt to block the regulation could take many forms. One option reportedly involves attaching a rider to an appropriations bill that prohibits the Department from issuing regulation on gainful employment. Another potential scenario would involve the House appropriations committee denying Education Secretary Arne Duncan the funds he requests to conduct the program reviews.

Since the Department’s approach has been so finance-focused, the threat of lowering appropriations might be the best way to shoot down the gainful employment rule. Every administrator knows what it means to lose funding for programs. Given his background leading Chicago’s public schools, Duncan would get the message loud and clear if the Department’s funding is impacted to the point where gainful employment can’t be successfully executed.

The government – with all its committees, subcommittees, rules and regulations, and red tape – could trip itself up with regard to its own efforts. After all the commotion – after all the sector’s been through – we could see gainful employment severely weakened. The Republicans can simply tighten the purse strings and execute its own control over the Department of Education. When you give any political party a chance to show its might, you are likely to see it follow through. My concern is that the damage has likely been done.

Today, your typical American knows something general about the for-profit sector, which is how it tends to go with negative news cycles. The “bad actors” and their deeds are constantly mentioned in reports in the newspaper and on the internet, on television and radio. Somehow the names start to blend together so that pretty soon you have a situation where when asked about for-profits, common people respond, “Oh … all those schools are a bad deal.”

We’re quick to convict in our society, but there also certain truths we understand. Almost every one of us realizes the power of the almighty dollar. And we all know about political contradictions. Secretary Duncan and the Department of Education have pretended all along to be on higher moral ground while attempting to institute their own control over the flow of dollars to for-profits. They’ve gone about it the wrong way, politically, and now it would be a pleasure to see them get tripped up by red tape.

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