Gainful Employment Ping Pong: Who Will Score the Next Point

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Shifting Gainful Employment Regulations

Regardless of your political leanings, the financial aid community may feel like they are in the middle of a game of ping pong. With shifting gainful employment regulations, proprietary for-profit colleges as well as state schools and non-profit universities are waiting to see where the ball will land next.

Obama Administration Adds Gainful Employment Rules and Regulations

For many years, the Department of Education approved many thousands of certificate programs as long as the college had maintained that the program prepared the student for Gainful Employment.  The term, however, was never defined until the Obama Administration created metrics of a debt to earnings ratio that set a bar for student borrowers and their income after school. While the added rules and regulations may have helped to weed out bad schools with deceptive practices, the additional regulations felt over burdensome to most financial aid administrators.

Changes Under Trump Administration

Things are changing under the new Trump Administration. Politico states:

“For-profit colleges are winning their battle to dismantle Obama-era restrictions as Education Secretary Betsy DeVos rolls back regulations, grants reprieves to schools at risk of losing their federal funding and stocks her agency with industry insiders. For-profit colleges, which enrolled nearly 2.5 million students in the past academic year, encompass multistate behemoths such as the University of Phoenix and DeVry, as well as hundreds of small trade schools that struggle to make ends meet. Since a Great Recession boom, the industry has been dogged by allegations of predatory sales techniques and poor outcomes that left tens of thousands of students drowning in debt while the schools raked in billions from federal student loans and grants. President Barack Obama sought to curb those abuses with a regulatory crackdown that the industry blamed for pushing two of its giants, Corinthian Colleges and ITT Tech, into bankruptcy, while others saw their stock prices nosedive and enrollment plummet.

For-profit college leaders, who hired Newt Gingrich, an ally of President Donald Trump, to help them navigate the executive branch, hail the friendlier approach as a welcome departure from the previous administration, which they and many GOP lawmakers say unfairly targeted their schools. But consumer advocates warn of loosening the reins on an industry rife with allegations that it lures students with false promises, saddles them with debt and then leaves them without the skills they need to get decent jobs.

Much of the fight is now shifting to the states, where Democratic attorneys general have been coordinating investigations of the industry and mounting challenges to DeVos’ rollback of federal regulations.”

For-Profit Colleges Waiting to See Where the Ball Lands

You’d think that by having a friendlier administration in Washington that the for-profit colleges would be increasing their lobbying efforts but that’s not true at all. According to the Chronicle of Higher Education:

“Some of the nation’s largest for-profit colleges have pulled back on their lobbying at the U.S. Department of Education and on Capitol Hill compared with previous years, according to figures compiled by the Center for Responsive Politics. The center is a Washington-based research group that tracks the effects of money and lobbying on elections and public policy.”

According to the Chronicle article, there are two big reasons for this:

“While the department is seen as far friendlier to the for-profit sector of higher education than it was under the Obama administration, there are two other big reasons that the companies are spending less time and money advocating there: Many of the Education Department’s top political appointments still remain unfilled, and little higher-education policy or legislation is being formulated.

‘In short, while many of our core issues remain unchanged, we’re spending less because Congress isn’t taking up many of these issues, and the new administration is still staffing up,’ said Brian Muys, associate vice president for public relations at American Public University System, a proprietary college that enrolls more than 52,000 students in its online degree programs.”

It remains to be seen how all of this will end up. The Trump Administration, while friendlier to the for-profit industry, doesn’t seem like they are just willing to completely roll back the Gainful Employment regulations, and seem to be working on their own version.

Reviewing Your School’s Gainful Employment Procedures

While we wait to see who will score the next point in this gainful employment ping pong game, HEAG can assist your financial aid office with reviewing your gainful employment procedures. Our compliance experts have successfully assisted for-profit, state and non-profit schools in complying with GE reporting and disclosure requirements.  For more information, contact Colleen King, Executive Director at HEAG, today.

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