Released: August 10, 2018

DeVos’ latest regulation rollback a blank check to scam schools written by taxpayers

Contact: Alegra Howard | .(JavaScript must be enabled to view this email address) | (408) 460-6797

The Department of Education has moved to repeal the gainful employment rule, a 2014 regulation that seeks to ensure that students who graduate from career education programs make enough money to pay back their student loans, or the schools risk losing their federal funding.

“Another day, another chance for the Department of Education to roll back safeguards aimed at protecting students and taxpayers and bolster the billion-dollar for-profit school industry,” said Linda Sherry, Consumer Action’s director of national priorities. “This new proposal will provide billions of taxpayer dollars to under-performing colleges, students will be left with mountains of debt and worthless degrees, and taxpayers will foot the bill.” 

The gainful employment rule sought to address the major concern that thousands of students across the country were enrolling in predatory career education programs that left them without the credentials and training needed to find full-time work and saddled with insurmountable debt. If these scam schools continued to fail to meet the established debt-to-earnings rates for graduates, the program risked losing access to federal student aid.

Instead of making each school publicly disclose the debt-to-earnings information for its graduates, the Department of Education plans to update its College Scorecard website with the data. However, unlike the stronger gainful employment rule that was put into place (and later suspended by the Trump Administration), there is no law or regulation that will mandate that the information be published, and under-performing schools will no longer worry about losing their federal funding. In fact, the Trump Administration’s own estimates show that eliminating the gainful employment rule will cost taxpayers nearly $5 billion over the next decade.

U.S. Secretary of Education, Betsy DeVos, has said that the gainful employment rule “unfairly and arbitrarily limit[s] students’ ability to pursue certain types of higher education and career training programs.” However, the gainful employment regulations were put in place to help ensure that students and taxpayers would be protected from high-cost, low-quality schools that have zero intention of providing a quality education.

Combined with the Department’s announcement to roll back borrower protections in its proposed borrower defense regulation, it’s clear that the Trump Administration’s loyalty is to the for-profit college industry and its investors, and not to the students it’s supposed to protect.

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