Splitting the Difference on Gainful Employment

The U.S. Department of Education today released its long-awaited proposed regulations to define "gainful employment," the mechanism that makes non-liberal arts offerings at for-profit colleges eligible for federal financial aid.

Striking a middle ground between aggressively attacking for-profit higher education and backing down under the sector’s intense lobbying pressure, the rule creates multiple paths to eligibility and takes aim at only the most egregious of bad actors.

"Overall I firmly believe that for-profit schools are doing a good job of preparing students" for the work force, Education Secretary Arne Duncan said, and "the many good actors should be protected from being tainted or being tarnished" by the misdeeds of a small minority.

"These schools — and their investors — benefit from billions of dollars in subsidies from taxpayers, and in return, taxpayers have a right to know that these programs are providing solid preparation for a job," he said. The gainful employment metrics aim to do just that by considering graduates’ ability to repay student loan debt as a reasonable indicator of whether a vocational program does what Title IV of the Higher Education Act of 1965 says it must do to qualify for federal student aid: prepare students for "gainful employment in a recognized occupation."

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