The True Significance of ‘Gainful Employment’

A din of commentary surrounded the release this month of Education Department regulations designed to ensure that vocational programs prepare their students for gainful employment.

Leaders of for-profit colleges — and their supporters, mostly Republicans, in Congress — continued to rattle their swords about the rules’ fundamental unfairness in singling out for-profits for scrutiny. Meanwhile, Wall Street analysts and others who watch the sector — and were free from worry about maintaining the colleges’ position in a potential lawsuit challenging the regulations — acknowledged just how much gentler the new rules were than the earlier version.

And the consumer advocates and Congressional Democrats who had urged the department to take a hard stand on for-profit-college regulation could not hide their disappointment with the agency’s backtracking, even as they tried not to criticize department officials publicly.

Largely lost in the instant analyses, pro and con, though, was the long-term significance of the department’s actions. The “gainful employment” rules, as they have come to be known, represent a powerful and potentially game-changing shift in how the federal government looks at higher education. The agency has written into federal policy, for the first time, a direct (if crude) attempt to measure the value of an academic program, by linking a measure of student expenditure (student loan debt burden) with an outcome measure (graduates’ average income).

This current approach applies only to non-liberal-arts programs at for-profit colleges and to vocational non-degree programs at public and private nonprofit colleges — for the moment. But now that the federal government has such a tool, many observers agree, it’s hard to imagine that it won’t seek to apply it more broadly — if not this administration or Congress, then a future one.

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