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The Return of the Gainful Employment Rule in Higher Education

This critical regulation will help protect students and taxpayers alike from low-quality and high-cost programs.

The Gainful Employment rule has been on the radar at Arnold Ventures for quite some time, and for good reason. It’s one of the most important ways the Department of Education can protect students and taxpayers from low-quality and high-cost career training programs. 

Under law, for-profit college programs and non-degree public and nonprofit programs are required to show they lead to gainful employment.” The Gainful Employment (GE) rule would define what that looks like as ensuring, essentially, that after students graduate from a program or school, they must both have an affordable amount of debt and be able to qualify for a job that pays more money than the jobs they could get before enrolling. This means that programs have to provide a quality education that a) enhances a students’ career opportunities and b) does not cost so much money that students are left with unreasonable amounts of debt. The goal of the rule is to protect students from programs that do not provide a quality credential and/​or charge more money than students can afford to pay for that credential.

Currently, more than 100 bachelor’s degree programs in the for-profit sector leave graduates with unaffordable levels of debt relative to their earnings. They are of low financial value to students and taxpayers. The Gainful Employment Rule would keep programs like these from receiving federal student aid if they fail to improve. 

Recently, the Higher Education team submitted formal comments to the Department of Education on low-financial-value schools and championed the Gainful Employment Rule as one step in the right direction to protect students from entering into programs that won’t serve them in the long run. 

The Gainful Employment Rule is making its way through the negotiated rulemaking process in the Department of Education. Its next step is to issue a Notice of Proposed Rulemaking (NPRM), where the Department of Education issues the language it proposes for the rule, and higher education advocates, institutions, and other stakeholders can respond to it. 

Ahead of that proposed rule, we have a quick primer on the history of the rule, why it’s important now, and how it’s just the start of how lawmakers can consider what schools and programs may access federal financial aid as they consider ways to update the Higher Education Act.

Read our fact sheet here