The Gainful Employment rule has recently become one of the biggest topics of discussion throughout higher education. This proposed rule would affect students’ and individuals’ ability to obtain federal student loans; the requirements for receiving such loans become selectively more stringent under the rule.  It will target only those who plan to attend for-profit colleges. The new rule calls for the Department of Education to work alongside the Social Security Administration in lowering student default rates. Lowering student default rates is a goal we should pursue – at traditional universities as well as for-profit ones.  But caution should be considered relative to the unintended consequences of regulation.

Why are only for-profit universities’ being targeted? Some would answer that recent revelations of wrong-doing justify such scrutiny.  Others answer that federal funds should not go to the for-profit sector.  If these answers are the justification for the rule, then we deserve their full explanation.

More than just a few, torrid examples of misdeed are required.  Questions like the following deserve answers.  Why are existing rules of the Department of Education not being enforced?  Where are the data that document the extent of wrong-doing?  What is the ratioinale for restricting students from making their own choices about which school to attend?  Why doesn’t the Department examine how to make markets work more effectively with increased information about success rates of students in all colleges and universities?  Why target only private sector universities when the U. S. needs increased access with success throughout higher education, including the traditional universities?

I am not suggesting that there are not issues that should be addressed among some for-profit schools;  there are.  But there are also issues that require similar attention in the traditional sector – if we are to have a U. S. higher education system that meets our needs.  Imposition of a new rule with insufficient data to justify it and many unanswered questions is not the route we should take.

We need the issue of growing student debt addressed – but not at the expense of unintended consequences such as decreasing access to higher education when the U. S. is already falling behind other nations in graduating students who are ready to participate fully in a global, highly competitive economy that demands a well-educated labor supply.  We need the issue of debt addressed – but not without attending to a broader set of issues that limit graduation rates even in traditional colleges and universities.