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Death By Delay: DeVos’ Playbook for Dismantling the Gainful Employment Rule

By Michael Itzkowitz

Last month the Department of Education announced that it will yet again postpone implementation of the Gainful Employment (GE) rule. Finalized in 2014, GE was designed to ensure that career education programs — such as those required to become a dental assistant, auto mechanic, or elevator technician — are a good financial investment for the students who attend them. By measuring graduates’ debt-to-earnings ratios (read the details here), GE gives consumers and taxpayers timely and relevant information about which programs are in fact providing financial value to the students they serve.

However, rather than let the carefully-crafted provisions of GE go into full effect this year, the current Administration has instead chosen to let this important consumer protection tool wither on the vine. Just as any new Administration has the prerogative to change existing rules they don’t like, Secretary DeVos has decided to take advantage of the arduous and time-intensive negotiated rulemaking process to slowly dismantle the current rule. That’s her right. However, the Administration is also taking extraordinary actions to quickly scrap the pieces of the rule that are scheduled to take effect sooner rather than later.

It’s clear their goal is death by delay — circumventing the appropriate rulemaking process and putting off the Obama-era GE rule until they can run out the clock and get their own rule on the books. Here’s their playbook:

1. Delay the Rule into Oblivion.

The Administration has already pushed back multiple deadlines that are in place to protect students and taxpayers from low-performing programs. First, they moved a deadline that required institutions to notify the Department if they want to appeal the first set of GE debt-to-earnings measures that came out earlier this year. Second, they’re giving those poorly performing schools more time to complete that appeal. Third, they are slow-walking the rule’s requirement for programs to warn students if they are failing the GE test. The chart below summarizes all of DeVos’ delays.

Sources: GE Disclosure Template, IFAP; Notice of Intent to Appeal Debt-to-Earnings Metrics, IFAP; Announcement of Appeals Deadlines, IFAP; GE Disclosure Delay, IFAP.

This delay-into-oblivion strategy likely violates the law, because all of these changes have taken place without going through the traditional rulemaking process. Both the Administrative Procedure Act and Section 492 of the Higher Education Act state that regulations issued by a federal agency are legally binding — not only upon the entities it regulates, but also upon the agency itself. This means that a new Administration is prohibited from taking administrative actions to delay or substantively change rules without providing public notice and soliciting public comment. And those are exactly the processes these delaying actions are attempting to avoid.

2. Water Down the Rule to Essentially Nothing.

In addition to using delay tactics, the new Administration has also gone to great lengths to take the teeth out of the appeals process by making it less scientific and more arbitrary than spelled out in the regulations. Their plan is to throw the previous standards for filing an appeal out the window, instead letting Secretary DeVos decide on a case-by-case basis which schools should be let off the hook for failing the GE rule in any given year. For example, institutions will no longer be required to survey all of their students in programs covered by the GE rule to determine their earnings. Surveys will no longer require a 50% response rate; and there’s no more minimum threshold for statistical significance in certain cases.

In other words, anything goes. Did you send out a survey monkey that only a handful of students completed? Sure — that’ll do. Academic scholars have chastised this decision as likely to lead to arbitrary and subjective decisions at best, and statistical manipulation at worst. And, as mentioned, the legality of making such a substantive change to an existing regulation without going through a formal negotiated rulemaking process is skirting the legal limits of what an administration is permitted to do by law.

3. Hide the Truth from Students and Taxpayers.

Lastly, the current Administration has chosen to sweep the rule’s consumer protection requirements under the rug by making it harder for prospective students to know whether a career education program is at risk of failing the gainful employment test. Not only are these institutions no longer required to provide consumer information directly to prospective students, if a school chooses to go through the appeals process, it no longer has to tell students that they’re applying to a failing program. Just look at these screenshots of what students would have received under the Obama-era GE rule vs. what they will receive now:

Source: Tweeted by @sandman4j.

Students at these poor performing programs need to know now — not after they enroll or are left in financial ruin after attending a failing program.

New Delays Make the Old Rule Moot

The Department has more deadlines to meet over the upcoming year, and many of us will be watching to see if it continues to delay these key pillars of the GE rule. The new GE rule could be finalized by November 2018, and it seems more likely by the day that it will become the law of the land before any piece of the current rule on the books is actually enforced.

That means poorly performing career programs will continue to get as much as $4 billion in taxpayer-funded grants over the next decade. And students who are trying to better their lives by getting higher education and training will actually be left worse off.

Michael Itzkowitz is a senior policy advisor for higher education at Third Way and the former Director of the College Scorecard at the U.S. Department of Education.


Death By Delay: DeVos’ Playbook for Dismantling the Gainful Employment Rule was originally published in Third Way on Medium, where people are continuing the conversation by highlighting and responding to this story.
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