Gainful Employment and Why It Should Apply to All Higher-Education Institutions

The U.S. Department of Education is trying to create a clear financial picture for students with a regulation called gainful employment. The new regulation along with a number of new directives are set to be put into action sometime in 2011. These new regulations have been conceived in response to the growing pressure over for-profit education’s questionable recruitment practices and poor job placement rates.

What the U.S.D.E. hopes to accomplish with these new policies is to make students more informed about the financials of their degree programs. Simply defined, the regulation will “apply a formula to programs in career-oriented majors, like healthcare, business and education to decide which ones lead to ‘gainful employment.'” If the program doesn’t fit the criteria, it will be eliminated. The regulations will also provide students with information like graduation, job placement, and traditional loan repayment rates. The U.S.D.E. hopes that this information will “help students analyze their risk/reward scenario.”

The U.S.D.E. has defined gainful employment as employment that provides students with the income they need to successfully re-pay their education debts.

Randy Proto, CEO of the American Institutes school group which operates healthcare-based career schools in a number of states, says that the disclosure agreement found in the regulation is a tremendous idea. But, for the regulation to be effective, Proto suggests that the formulas established to decipher the gainful employment statistics must “account for differences in: student populations served, programmatic goals, national economic conditions and many other factors.”

As it is envisioned now, the gainful employment regulations would only apply to for-profit education institutions and a minute percentage of students in non-degree programs at ground schools. So, Proto asks, what about the “7.5 million additional students enrolled in career-oriented degree majors at public and private universities? Why leave any students and programs out of its reach? If the proposed regulation is a good idea and provides the anticipated benefits and protections, it should be broadly applied.”

Proto, clearly a proponent of for-profit education, supports the gainful employment measure, but would also like to see regulations placed across the board to ensure equality, not just at for-profit online schools or career training institutions.