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Education Department delays gainful employment proposal until 2023

Higher Ed Dive

Natalie Schwartz

June 22, 2022

Dive Brief: 

• The U.S. Department of Education pushed back the timeline for publishing its proposal for a revised gainful employment rule to next year, meaning the earliest it could go into effect is mid-2024.

• The gainful employment rule is intended to ensure students who complete career education programs can find work and pay back their student debt. The Biden administration was originally slated to release its gainful employment proposal in July, but it pushed that date to April 2023 in a regulatory agenda released Tuesday.

• Representatives of the for-profit sector applauded the delay. They’ve previously criticized the Biden administration’s ideas for a gainful employment rule — which looked at students’ debt levels and how their earnings stack up to high school graduates — arguing that they unfairly target the for-profit sector.

Dive Insight: 

Because of the delay, the gainful employment regulation will miss a key deadline of Nov. 1 for the rule to take effect next year. The earliest the rule can now take effect is July 1, 2024.

Policy experts warned the delay could allow poorly performing colleges to continue receiving federal funding and harming students.

“Ultimately, this can be devastating for students who enroll in these programs,” said Michael Itzkowitz, a senior fellow at Third Way, a left-leaning think tank. “It’s important that the Education Department works on implementing this rule as soon as possible.”

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EDUCATION Biden administration agrees to cancel student debt of 200K borrowers who say they were defrauded

Politico

Michael Stratford

June 22, 2022

The Biden administration has agreed to fully discharge the federal student loan debts of approximately 200,000 borrowers who claimed they were defrauded by their college but whose applications for relief have languished at the Education Department for years.

The agreement, which could wipe out more than $6 billion of student loan debt, was reached as part of a proposed class-action settlement filed in federal court Wednesday evening.

The proposed settlement is a possible ending chapter to a long-running lawsuit challenging the Education Department’s handling of the “borrower defense” law, which entitles federal loan borrowers to debt relief when their college misleads them or otherwise defrauds them.

The class-action lawsuit accused the Trump administration — and then the Biden administration — of illegally delaying for years any action on the applications that borrowers had filed with the Education Department seeking debt relief.

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Biden Pushes Gainful Employment to Spring

Inside Higher Ed

Meghan Brink

June 23, 2022

Key regulatory agenda items will not be completed until July 2024 at the earliest.

The Biden administration is putting off a final proposal on gainful employment and several other regulatory matters until next spring.

The Office of Information and Regulatory Affairs released an update on several negotiated rule-making agenda items that will not be completed this year and are now scheduled for release in April 2023 at the earliest. This includes a new gainful-employment rule, measures of financial responsibility for colleges, standards of administrative capability, certification procedures and ability to benefit.

Additional regulations on for-profit education have been at the center of the negotiated rule-making process that has been ongoing since January. The gainful-employment rule, which many consumer advocates have been calling on the Biden administration to replace, would create a metric that compares the debt a student takes on compared to the income they earn after graduating from a program to determine a program’s eligibility for federal funding.

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