Over the past six months, the Department of Education and GOP lawmakers have declared all-out war on the Gainful Employment (GE) Rule. The rule was finalized in 2015 and requires that all programs offered at for-profit institutions and non-degree programs at non-profit or public institutions lead to gainful employment. This is measured by comparing graduates of each program’s median student debt and median earnings.
In addition to protecting students (and taxpayer dollars) from these programs, the GE Rule, and the data it collected, informed consumers of the debt and income of thousands of career and technical programs. Without the GE Rule, these bad actors will continue to prey on students, and students will not be empowered with key information to make better decisions.
Gainful Employment Data Empowers Consumers to Examine Their Options
Senator Dick Durbin noted the importance of these data in a recent letter to Secretary DeVos. Despite the renegotiation process, Sen. Durbin notes, the Department is still obligated to collect and release a second round of data. Failing to do so puts hundreds of thousands of students and millions of taxpayer dollars at risk.
A graduate of Le Cordon Bleu’s pharmacy technician program could expect annual earnings of $15,793. That is barely more than the federal minimum wage of $7.25 per hour, in exchange for over $15,000 in student loan debt. Had that same student gone to school only 10 miles away at Austin Community College, she could expect to graduate with no debt and earn significantly more than their for-profit attending peers.
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School Name |
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Program Name |
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Median Annual Earnings |
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Pharmacy Technician/Assistant |
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$25,857 |
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Pharmacy Technician/Assistant |
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$19,940 |
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Pharmacy Technician/Assistant |
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$15,793 |
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Young Invincibles’ analysis of 2015 Gainful Employment data from the Department of Education’s Office of Federal Student Aid |
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The Gainful Employment data empowers this student to make a better decision. Though the rule only cuts off funding after the damage has been done, it can act as a spotlight and force companies and colleges to be transparent to their students. We shouldn’t be surprised that hundreds of for-profit college campuses, including the entire Le Cordon Bleu chain, have closed their doors rather than face the data and the loss of their Title IV funding.
When the Gainful Employment Rule was first introduced, some advocates were concerned that debt-to-earnings would appear artificially high for community colleges due to the relatively few students who take out loans, that the difference between academic and vocational programs is not always clear, and that the rule would fail to account for students who transfer from a 2-year university into a 4-year university and thus appear to have no income. These concerns appear misplaced. For-profit schools make up 66 percent of the regulated programs (Figure 1) but account for 98 percent of the failed programs (Figure 2) and 94 percent of near-failing zone programs. Community colleges make up 25 percent of the regulated programs yet have no failing programs and only 1 percent of near-failing zone programs.
Figure 1 – Programs Regulated under GE by School Type
Figure 2 – Programs Failing under GE by School Type
Young Invincibles is engaging young adults to support the GE Rule. On December 4th, YI teamed up with Higher Ed, Not Debt to drop off over 2,000 petition signatures at the Department of Education in support of the Rule. The fight is far from over though, as the PROSPER Act has moved out of the House and the Gainful Employment Rule negotiated rulemaking is underway.