This past week, President Obama issued the executive order – Improving Regulation and Regulatory Overview. The actions by President Obama are a very positive sign, especially in light of the newly introduced regulations of the Department of Education this past year. Those regulations in the areas of “new programs” and “gainful employment” have the potential to be very costly to higher education, and many of us have believed that they did not strike the right balance between protecting consumers of education with assuring consumers access to education. President Obama had called for an approach that would “strike the right balance” in his Wall Street Journal op-ed, explaining the rationale for his action
The Department of Education’s gainful employment rule and its approval process for new programs have the potential to impact negatively both higher education and the broader economic recovery. They can do so by slowing the growth of new programs with a “chilling effect” on new programs that comes from the additional, imposed processes associated with adding new programs. They can also slow growth in higher education by imposing additional risk to the potential yield from new educational programs due to threats from the gainful employment rule. Their impact may well limit innovation and growth in new jobs in this very large sector of our economy.
But perhaps the more significant potential impact of regulations like the ones the Department of Education chose to implement is on the slowed growth in human capital that comes from limiting job-related training and education for industry sectors where the value of human capital is increasingly critical. U. S. productivity matters, and one way we increase our productivity is through education that improves the quality of our labor supply.
I applaud the direction that President Obama has announced, and I look forward to its effect throughout government, including the Department of Education.
Be sure to check back on Monday, as I will post Part 2 of this blog on an exciting new issue that I hope to blog about more in the future.