Gainful Employment
The “gainful employment” definition was established in regulations during the Obama Administration to stop program abuse occurring largely in the career college sector. The Obama Administration’s gainful employment regulations were short-lived. One of the first regulatory initiatives of the Trump Administration was to convene a negotiated rulemaking panel regarding the future of the gainful employment regulations, which led to the termination of the Obama-era regulations in July 2019.
The Obama Administration developed the controversial regulations out of a concern that a significant number of gainful employment programs were not providing students the skills needed to gain employment in the occupation for which a program was supposedly designed. Further, there was concern that the jobs students got were low-paying, and thus not worth the expense of the education, leaving many of these students with debt on which they often defaulted. Thus, the gainful employment regulations were designed to ensure that students don’t take on large amounts of debt for training programs that lead to jobs with earnings too low for them to repay their loans.