New Unnecessary Department of Education Regulation Mired in Controversy

The Department of Education (DoEd) just released regulations known as “gainful employment” rules which, according to the Chronicle for Higher Education, states that, “Under the rule, vocational programs whose students have the highest debt burdens and lowest loan-repayment rates will become ineligible to receive federal student aid.”

This regulation comes after a stormy and acrimonious rulemaking process that drew 90,000 public comments. The lofty rationale behind the rule is that it will make great strides in solving America’s student debt crisis. Of course, it will do no such thing. It represents the worst kind of misguided, biased and hypocritical rulemaking — all pretense; no solution. Gainful employment will do little to ameliorate the student debt crisis, but is a cynical attempt to kill career colleges, a life blood of education for millions of Americans who choose not to go to traditional colleges or universities. This rule must be overturned.

The rule is directed solely at career colleges and universities, which will be heavily penalized if graduates fail to meet debt-to-income ratios. Students will no longer be able to secure federal student aid to attend a program that would give them the skills and credentials to advance their marketability in the workplace.

For-profit colleges have grown exponentially over the last decade because they are filling a huge market demand for workforce training. The for-profits have moved into this niche, developed online courses that outstrip the capacity of their not-for-profit competitors. At a time when the government should be supporting market growth, the for-profit college sector is being penalized for out-performing its “competition.”

Biased rule making is never wise. In this instance, it may also be illegal. A rule that targets a single business sector to the exclusion of the competition is certainly suspect.

This rule must be overturned and more investigation is warranted.  Good government groups such as Citizens for Responsibility and Ethics in Washington CREW have pointed to DoEd’s lack of transparency, secrecy and obfuscation. They have called for an SEC investigation into an array of improprieties, among them a Government Accountability Office (GAO) report riddled with errors and inappropriate backroom dealings among Wall Street short-sellers and policymakers. Others have raised deep concern about the Dept. of Education’s legal authority to regulate in such a broad, new-policy making fashion.

The impact of misguided policy must be forcefully challenged. The Taxpayers Protection Alliance’s network of taxpayers and citizen activists, calls upon Congress to move quickly to block the rule until the impact on jobs and the economy can be assessed. Congress must find a workable solution to America’s debt crisis and gainful employment is not it.  This new rule masquerades as a solution, while killing an industry that is vitally important to this economy. We need real solutions to America’s student debt crisis.

(for more information on this issue read TPA’s blogs on May 2 and May 4).