Gainful Employment Rule Goes to OMB: Time to Rethink the Process

Yesterday, the Department of Education sent its Gainful Employment rule to the Office of Management and Budget for final review. Unfortunately, the department chose not to publish the text of the rule which would have allowed public review – by the 90,000 individuals who weighed in during the public comment period and the bipartisan group of Representatives in the U.S. Congress who voted to defund the regulation.

Since the process began, the Gainful Employment rule has suffered from procedural mistakes and the appearance of bias. The flawed GAO report, which led to the report’s being discredited, was followed by the announcement of an Inspector General’s investigation of allegations that Department of Education employees colluded with Wall Street short-sellers.  The release of incorrect and inflated calculations of trial three-year Cohort Default Rates has further tarnished the work of the Department by adding to existing suspicion; moreover, the incorrect figures may have jeopardized the future of some California students to receive aid.

As the Department of Education and OMB move toward finalization of the Gainful Employment rule, it is noteworthy that the failure to make public the rule under consideration has added to the atmosphere of suspicion already generated.  Obtaining support for the rule among those most affected will be even harder, and those most-affected remain the oft-cited low-income and minority students who often begin their careers in relatively low-wage jobs.

The Department of Education should still re-consider the rule.  Rather than implement it, the Department should take a step back, recognizing the effect of the aroused suspicion and flawed process.  Correcting the actions of bad actors in the industry is not wrong, as I have stated before.  But implementing rules that too broadly affect the most vulnerable in our society is wrong.  Starting over with a more transparent process would be the best option at this time.


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