New Gainful Employment Regulations Tied to State Authorization

This morning, the U.S. Department of Education released a 945 page document describing its new “Gainful Employment” (GE) regulations. An informal version is available on the Department’s website and the final version will be published in the Federal Register on October 31.  Except for the quote from Inside Higher Ed, the other quotes are taken from an early release of the final document that I was able to view.

New to these regulations is an explicit connection between Gainful Employment and the state authorization regulations. As a result, the amount of information that will need to be reported and the number of states for which it will need to be reported could dramatically expand over what was published in the original proposed regulation.

Originally, colleges would have to report in the state in which they were located and also in their local Metropolitan Statistical Area (MSA). The expansion means that institutions will be required to inform students about programs licensure, certification, and accreditation for each GE program for each state in which it must meet the federal state authorization rules.Sign reading "Help Wanted Apply within".

Currently, there is no federal regulation for state authorization for distance education, so it is not yet enforceable. Should that regulation be reinstated, the Gainful Employment notification regulations will be triggered in each state in which the college needs to be authorized for each program that is covered by Gainful Employment. We have heard that the Department may release proposed language for a new federal state authorization regulation sometime in 2015.

What is Gainful Employment?

Gainful Employment has been a controversial subject for several years. Its purpose, according to an article in today’s Inside Higher Ed:

“Gainful employment applies to vocational programs, including most of the for-profit sector’s offerings. Non-degree programs at community colleges would also need to comply with the rules, which are set to go into effect in July 2015. So would some non-degree programs at four-year nonprofit institutions, both public and private.”

The reason for the Gainful Employment rules are:

“Specifically, the Department is concerned that number of GE programs: (1) do not train students in the skills they need to obtain and maintain jobs in the occupation for which the program purports to provide training, (2) provide training for an occupation for which low wages do not justify program costs, and (3) are experiencing a high number of withdrawals or “churn” because relatively large numbers of students enroll but few, or none, complete the program, which can often lead to default. “

As a result, they will create a “transparency network” that will:

“…increase the transparency of student outcomes of GE programs so that students, prospective students, and their families have accurate and comparable information to help them make informed decisions about where to invest their time and money in pursuit of a postsecondary degree credential.”

Must Disclose Licensure, Certification, and Accreditation Info for GE Programs

The regulation will require colleges to disclose their licensure, certification, and accreditation status to students in Gainful Employment programs:

“We are…eliminating the proposal for program certifications to cover the States within an MSA, and requiring instead that the institutions provide applicable program certification in any State where the institution is otherwise required to obtain State approval under 34 CFR 600.9.”

As a reminder, §600.9 is the federal state authorization regulation. As stated in the paragraph below, the current federal state authorization regulation is only for states where an institution has a physical location:

“The current State authorization regulations apply to States where an institution has a physical location, and the program certification requirements also apply in those States so these two sets of requirements are aligned.”

But it goes on to hint that it will also include distance education if that regulation returns:

“If any changes are made in the future to extent the State authorization requirements in 34 600.9 to apply in other States, we intend the program certification requirement to remain aligned…We believe that the requirements for the applicable program certifications should also be provided for those States. This will ensure a program and institution that provides the program have the necessary State approvals for purposes of the Title IV, HEA programs. Linking the State certification requirements in §668.414(d)(2) with the State authorization regulations in §600.9 to identify States where institutions must obtain the applicable approvals benefits students and prospective students because the State authorization requirements include additional student projections for student enrolled in the programs for which certifications would be required.”

And a final reason for doing this…

“…institutions may be required to include on a program’s disclosure template whether the program meets the licensure, certification, and accreditation requirements of States…for which the institution has made a determination regarding those requirements so that students who intend to seek employment in those other States can consider this information before enrolling in the program.”


There are an unsettling number of colleges who are not transparent with students about this information. While Gainful Employment has definitely targeted the for-profit sector, there are plenty of institutions from other sectors who have not informed students about whether their program will meet local requirements.
I’ve only had a few hour to review this regulation. Some people did not think it was their job, it will be now.

I would not be surprised if there is not significant push-back and possible lawsuits regarding the whole regulation.

As I learn more, I’ll let you know.


Russell Poulin
Deputy Director, Research & Analysis
WCET – WICHE Cooperative for Educational Technologies
Twitter: @wcet_info and @russpoulin


Photo credit: MorgueFile


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Executive Director WCET (WICHE Cooperative for Educational Technologies)

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