The Department of Education has begun a negotiated rulemaking to consider standards to hold colleges and universities accountable for student outcomes. It is an opportunity for the department to repeal the Gainful Employment Rule, which discriminates against post-secondary schools favored by the military, veterans and non-traditional students.
The One Big Beautiful Bill Act that President Trump signed into law requires the Education Department to develop and implement an “earnings premium” to be applied to all colleges and universities. This “do no harm” test will compare the median earnings of graduates of undergraduate programs with working adults with only a high school diploma and graduate program completers with bachelor’s degree holders, both four years after completion.
The AHEAD Committee, tasked with developing the new standard, can and should use the rulemaking to retire the Gainful Employment Rule once and for all. The OBBBA requires that the earnings comparison tests be applied to all programs, no matter what type of school offers them.
Over the past decade, confidence in U.S. higher education has fallen steadily. In 2023, most Americans said a conventional four-year degree is no longer worth the cost. While attitudes improved modestly this year, the fact remains that for many students, the traditional path to a post-secondary degree is a money pit, which explains why more young people are gravitating toward skilled-trade careers.
The new earnings metric may help restore confidence in, and the value of, a college degree, if it is a reasonable metric that properly measures comparable populations and is applied uniformly to all schools, not just against the proprietary schools favored by non-traditional students, like veterans, for which the Gainful Employment Rule exclusively applies.
“If” is the key word. It is critical that negotiators demand that statistically comparable principles are met, and they would be wise to consider the previous (failed) attempt to avoid the same pitfalls.
First, the new standard must be applied uniformly to all schools. There can’t be any sacred cows. The Gainful Employment Rule singled out career colleges, even though they represent only a fraction of the bad apples. One analysis found that public and private schools would account for about 80 percent of all failing programs if the same debt-to-earnings standard were applied across the board. Inexplicably, the latter schools got a pass.
This selective application of the Gainful Employment Rule revealed it for what it really is — a tool to drive career colleges out of business, corner students into conventional four-year universities that may not be the right fit for them, and reinforce the higher ed status quo.
Second, the new standard should set a reasonable benchmark for comparing graduates’ earnings. In an increasingly competitive economy, many career fields require continuing education for entry, even if it may not immediately yield vastly higher earnings compared with individuals who have been in their careers for years.
A veteran who wants to become a diesel mechanic, for example, should not be prevented from using his or her earned benefits at a school of their choice because the earnings premium metric is set unrealistically high, or because it compares his or her post-graduation earnings to a population that does not represent what would have been his or her alternative if they had not pursued that education.
Third, negotiators must start by repealing the Gainful Employment Rule, especially since the OBBBA will replace it with the earnings premium. The Gainful Employment Rule is no longer applicable and is clearly not Congress’s legislative intent, given what they passed in the law.
This regulation was never about protecting students; it was meant as a weapon to put proprietary institutions at a disadvantage — schools that have proven particularly popular with the military, veterans and non-traditional students. As a result, servicemembers and veterans were prevented from using their earned education benefits, and the door to schools that would have better met their learning and career goals was closed on them.
Insofar as the new earnings premium test is a step away from the Gainful Employment Rule, it is a small step in the right direction. Gainful Employment was, and still is, discriminatory. Now, it is also unnecessary. The AHEAD negotiators should acknowledge this and focus on leveling the playing field for all colleges and universities—not on building an even bigger regulatory edifice on an already unstable foundation.
Negotiated rulemaking committees rarely draw headlines, but their outcomes matter — especially for military members and veterans. Having served as a negotiator representing these groups, I hope and expect that the AHEAD Committee will repeal the Gainful Employment Rule and replace it with a metric that holds all schools to a uniform, consistent and applicable standard and empowers students to make their own education choices.