For-Proft College Gainful Employment Rules Are on the Block in Congress and the Courts

NEW YORK (MainStreet) — The drive to weaken government oversight of higher education by the Republican-dominated Congress kicked off last week during the first meeting of the Senate Committee on Health, Education, Labor and Pensions (HELP) since the midterm elections, with student advocates arguing for oversight.

Gainful employment rules are a threat to for-profit colleges, who depend on federal funding students bring in the form of student loans. For-profit students are more likely to live below the poverty line or receive food stamps than their counterparts in public or private four-year colleges and don't fare well on the job market. The rules would force for-profits to show that their graduates will be able to earn enough to pay off their student loans. When the rules were first proposed, Education Secretary Arnie Duncan said, "We're giving career colleges every opportunity to reform themselves but we're not letting them off the hook, because too many vulnerable students are being hurt."

The Institute for College Access and Success (TICAS) called last fall's gainful employment rules "inadequate"--a sign that student advocates now fear that they could lose regulation they took for granted. While the group agreed with some of the Task Force's recommendations, it also claimed the gainful employment recommendations are "legally required under Sections 101 and 102 of the Higher Education Act and...clearly in the interest of students and the federal government."

"We agree that regulations to enforce the Higher Education Act’s gainful employment requirements were long overdue to protect students and taxpayers from career education programs that consistently leave students with debts they can’t repay," the group said. But what a reauthorized Higher Education Act will look like is not clear.

While bi-partisan was the buzz word of choice at the HELP hearing, the gainful employment rules struggle is emblematic of a larger divide. Is Congress learning how to spell gridlock all over again? Will higher ed policy--and new legislation-- be held hostage as a result?

"The practical reality is that while Republicans control the House and Senate they do not have enough of a majority to block filibustering in the Senate and override a Presidential veto," said Mark Kantrowitz, author of Filing the FAFSA and senior vice president and publisher of Edvisors.com.

"They may be able to overturn the gainful employment regulations through other statutory changes," Kantrowitz noted -- changes such as a compromise that would sacrifice gainful employment rules to salvage legislation deemed more important.

The 2016 elections are less than two years away. Kantrowitz added,

"Extreme changes are not very likely to occur, though these things are difficult to predict. It could swing either way," he said.

--Written by John Sandman for MainStreet

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