Education Secretary Betsy DeVos

DeVos repeals rule that reined in for-profit colleges

July 1, 2019
Regulation enacted in 2015 by the Obama administration sough to crack down on colleges that produced graduates with no meaningful job prospects.

U.S. Education Secretary Betsy DeVos has officially repealed an Obama-era regulation that sought to crack down on for-profit colleges and universities that produced graduates with no meaningful job prospects and student debt they could not hope to repay.

The New York Times reports that so-called gainful employment rule was issued by the Obama administration in 2014. Under those standards, those schools, to maintain access to federal financial aid, would have to prove their graduates could find gainful employment. 

DeVos has delayed critical parts of the rule, and last year, she sought to repeal it entirely.

Education Department officials under DeVos have argued that transparency, not regulation, is the best way to hold all schools — public nonprofits, community colleges and for-profits — accountable for their results. Instead of any accountability measures, it promised to expand an existing database, called the College Scorecard, to provide information on student debt and earnings prospects. The database, which provides information, including loan debt information, for 2,100 certificate-granting programs, was unveiled last month.

“These important reforms are a more complete and effective way to hold all types of higher education institutions accountable and make sure that students have a full suite of data when making a decision about their education,” she said. “This administration will continue to put students first and make sure they not only have a multitude of pathways to success post-high school but also the information they need to make the best choices for themselves.”

But in rescinding the rule, the department is eradicating the most fearsome accountability measure — the loss of federal aid — for schools that promise to furnish students with specific career skills but fail to prepare them for the job market.

Congressional Democrats and student advocates say rescinding the rule would leave the scandal-scarred for-profit college industry unchecked. The repeal will take effect July 2020.

“Repealing — rather than revising or replacing — the gainful employment rule will prop up low-quality for-profit colleges at the expense of students and taxpayers,” said Representative Robert C. Scott of Virginia, the chairman of the House education panel. “Today’s announcement underscores the need for Congress to pass a comprehensive reauthorization of the Higher Education Act that protects students and taxpayers from low quality for-profit schools.”

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