Gainful Employment Requirements, Post-Court Ruling

The Department of Education published clarification on colleges’ regulatory requirements following the June 30 decision of the U.S. District Court for the District of Columbia. . While the court upheld the Department’s authority to regulate in this area, the court decision vacates most of the provisions of the gainful employment regulations, several of which were to go into effect on July 1. (See July 5, 2012, Washington Update) 

The Department of Education’s Gainful Employment Announcement # 39, issued July 6, states that institutions don't have to submit gainful employment reports for the just-ended 2011-12 award year.  They also are not required to provide the Department with the 90-day notice of intent to offer a new gainful employment program.  Basically, institutions should follow guidance in the relevant regulations as they were in effect prior to July 1, 2012.  The Departments of Education and Justice are continuing a review the court’s decision.

Institutions may “…voluntarily submit corrections to previously reported gainful employment information."  A subsequent announcement will explain how to make those changes to a recently updated National Student Loan Data System.

Institutions must still disclose information about their gainful employment programs as required since July 1, 2011.  The information is to be provided using the Department's disclosure template, once it is available.  However, institutions are not required to update their disclosures until that template is provided later this month.

In the meantime, a small, bipartisan group of House members has urged the Obama administration to halt implementation of the remaining gainful employment regulations, and to delay further regulatory action until the reauthorization of the Higher Education Act, scheduled for 2014.

Also, on July 18 the House Labor, HHS, and Education Appropriations Subcommittee approved language that would prevent implementation of all the gainful employment regulations. The Senate is unlikely to accept the provision.  Still, this adds even more uncertainty to the future of the gainful employment regulations.

For more information, please contact:
Maureen Budetti