José Cruz, Vice President of The Education Trust, on the 'Gainful Employment' Regulation

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Publication date: 
June 2 2011

WASHINGTON (June 2, 2011) — The Obama administration’s new “gainful employment” regulation is a disappointing stumble on America’s path toward regaining the global lead in college attainment. 

The abuses of career colleges have been well and repeatedly documented. But the final, watered-down rule does not do nearly enough to curb these abuses. It provides students and taxpayers with only the most meager of protections against an aggressive industry bent on exponential growth and ever-escalating profits. In the end, the 436-page document is little more than an a la carte menu of ways these institutions can game the system.

For example, under the new regulations, many of the most toxic career education programs will continue to operate — largely at taxpayer expense — for three years with no requirements to improve. And because 81 percent of these programs are two years or fewer, the vast majority of students will be out of school and into the job market, shouldering huge debt and holding a certificate or diploma that may or may not lead to gainful employment before any sanctions are levied against the programs that shortchanged their dreams and made off with their cash. 

Under the leadership of Kentucky Attorney General Jack Conway, 10 state prosecutors recently announced a joint investigation of the programs that should have been reined in by this federal regulation. After today, the millions of students who had hoped that the Obama administration would stand up for them can only hope that state action will provide them with the kind of protection they need from predatory for-profit college companies.

In announcing the regulations, Secretary Arne Duncan told The New York Times that “as a country, we need this sector to succeed.” This is a troubling statement, but makes clear the point of view the administration took in finalizing these regulations. 

America does not need this sector to succeed. We need our students to succeed. Regulation designed for the success of the sector won’t help our students, our economy or our democracy.