FREOPP Report Proposes Fixes to Biden’s Gainful Employment Rule
October 16, 2022
While the rule successfully denies funding to many low-value programs, nonprofit colleges face zero accountability.
Austin, TX and Washington, DC – The Biden administration’s proposed Gainful Employment (GE) rule requires key changes, according to a new report by Preston Cooper, Senior Fellow at the Foundation for Research on Equal Opportunity. Cooper offers policy solutions to address significant oversights in the regulation.
The GE rule aims to hold postsecondary certificate programs and for-profit colleges accountable for student outcomes. It terminates eligibility for federal aid funding if students in these programs have a high debt-to-earnings ratio or fail to achieve earnings above the median high school level.
However, Cooper writes that GE does nothing to protect more than three-quarters of college students who graduate from programs at public and private nonprofit colleges, which face zero accountability under the rule.
The report compares programs’ performance on GE to FREOPP’s estimates of return on investment (ROI) to identify instances where GE effectively targets programs that fail to produce ROI for their students, as well as where its calculations fall short.