House Votes to Block Enforcement of ‘Gainful Employment’ Rules

Education News 02.18,11

The House of Representatives today approved legislation that would block the Department of Education from enforcing a rule designed to hold for-profit colleges accountable for preparing its students for employment. The legislation, sponsored by Rep. John Kline, R. Minn., was passed as an amendment to the FY2011 Continuing Resolution, which would fund the federal government through the end of September.

Under the proposed regulations, colleges that fail to demonstrate that their programs are preparing students for “gainful employment” would risk losing their eligibility to participate in federal education grant and loan programs. The Kline amendment will prevent the department from using any federal funds to “implement, administer, or enforce” the rule.

These regulations are particularly important for:

  • students of color, who represent about half of the undergraduate students in for-profit programs;
  • low-income students, who make up 6 in 10 for-profit college students;
  • women, who comprise nearly two-thirds of for-profit college undergraduates; and
  • armed-service members and veterans, a growing population at many for-profit colleges since the passage of the Post-9/11 G.I. Bill.

While educating only about 10 percent of undergraduates, students at for-profit colleges are responsible for 44 percent of all defaults on their government-guaranteed college loans. This debt can follow these students for the rest of their lives. Many universities resort to recruiting in homeless shelters and halfway houses to find students who are eligible for federal financial aid, which make up the bulk of these colleges’ income.

“For-profit colleges have launched an all-out campaign using the American Dream as bait to trap vulnerable students into underperforming schools and saddle them with a lifetime of debt,” said Nancy Zirkin, executive vice president of The Leadership Conference. “We support the education department’s efforts to hold these schools accountable by issuing this rule and vigorously enforcing it.”

The Leadership Conference has been very active on the issue, having sent letters to Secretary Duncan and members of the House. Earlier this week, diverse civil rights organizations, including the NAACP, MALDEF, AAUW, and the USSA, hosted a press conference call on the issue.