I always thought gainful employment meant a job with a paycheck. Apparently, the Federal government has decided to redefine the term as it applies to Federal aid to higher education. The U.S. Department of Education has released a new rule defining gainful employment to mean graduates earn enough to repay their student loans or risk losing their Federal funding. This has had a huge impact on for-profit colleges including those that provide online education.
- Loss of Federal aid – As this rule goes into effect many online colleges will risk losing Federal aid in the form of Title IV funds that they count on to survive.
- Tarnished reputations – Online education is always fighting an image problem, and rules like this only make matters worse. By targeting online colleges, the Federal government implies they are greedy and don’t care about their students.
- Fewer programs – This new rule also targets specific programs offered by online colleges that don’t meet their gainful employment standards. This will force some programs to be eliminated from online education.
- Fewer online schools – The lost funding will ultimately result in some online colleges going out of business. This will result in fewer choices for students looking to get an online education.
- Effects of the job market – The overall job market is ultimately beyond the control of online education, and a poor market will create an unfair burden. Online schools will be at the mercy of the fluctuating economy.
- Niche programs – Some people take online classes just for their own personal improvement and aren’t looking for a career in their area of study. The Gainful Employment rule will result in many of these niche programs being eliminated.
- Minorities – There’s been a lot of discussion about the way gainful employment will impact minorities. Many feel this rule will have a harmful effect on low income minorities who don’t have as many educational choices as others.
- Camel’s nose – Another concern is that this new rule is just the camel’s nose under the tent and that the federal government won’t stop there. By letting this regulation be implemented others may follow that will have an impact on online education.
- More paperwork – As with any Federal regulation, the Gainful Employment rule will add to the burden of paperwork required by online colleges. They will be forced to prove they’re meeting the new guidelines in order to continue receiving funding.
- Tracking students – This new rule also mandates the monumental task of tracking students after they receive their degrees. How are these institutions going to know where their former students are employed and how much money they make? There are also student privacy concerns to be considered.
The Gainful Employment rule was intended to protect students, ensure repayment of student loans and improve accountability of online colleges. As with any Federal regulation, the unintended consequences always abound and the argument continues about the role of government in our everyday lives. Does this new regulation cause more harm than good? Are online students too stupid to make competent financial decisions for themselves or do we need the Department of Education making their choices for them?