Forecasting Gainful Employment

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Given the debate around the Department of Education's proposed Gainful Employment regulation, we decided to ask our Insiders a few questions to get their thoughts on what is likely to happen. 

In last month's survey, Insiders were unanimous that Republicans taking control of the House of Representatives makes it more likely they they will try to block the implementation of the regulation.  Some suggested this could be done by attaching riders on an appropriations bill.  But this may not be as easy given that it would have to survive the Democratic controlled Senate and also a possible Presidential veto.  

We also asked Insiders if they thought the Department will move forward and publish a final regulation or would they delay or even scrap it altogether.  Thirty-two percent of the Insiders thought the Department would move forward with a final regulation in 2011, but that it would have changes that would be more favorable to the for-profits. Only 5% thought the industry would face a regulation that was worse then what was proposed.  

Some charts and quotes from the surveys are below.   


Gainful Employment



Insider Insights:

  • “The administration is already staked out on this one. Pulling back would be another off-shore drilling flip-flop.”

  • “Administration will back down with the change in the House as a compromise on other fronts.”

  • “I don't know what makes the Department think that they have a right to circumvent state authority. While there are problems in the for-profit sector, there are also some good models (e.g., Western Governors University). Let's not stifle the marketplace! We can't count on the traditional universities to lead the type of change that's needed so that we can put Americans back to work.”

  • “The regulation would absolutely bring more accountability to a for-profit system that has run amok and exploited low-income students all over the country. What is proposed is fair and should be promulgated.”

  • “They can't ignore this much pressure, especially with the new Congressional alignment.”

  • “The Administration has backed itself into a corner and now doesn't know what to do to get out. There are ways to get out of the box and make good policy (e.g., drop the regulation and push for legislation that gets at the worst institutions of higher ed, both for-profit and non-profit, in terms of completion rates and cohort default rates); however, so far the Administration appears headed for a yearly battle on the appropriations front where the House will insert appropriations riders.”

  • “They've got nothing to lose and they are true believers in destroying the for-profit industry. They could not care less what any Member of Congress thinks.”


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