The US Education Department, under the leadership of Michigan native Betsy DeVos, has moved to end the Gainful Employment regulation for for-profit and career colleges, an Obama-era safeguard that held such schools accountable by requiring them to provide data on job placement and student debt.
Under the regulation, for-profit and career colleges were required to prove that the annual loan payments of “a typical graduate does not exceed 20 percent of his or her discretionary income or 8 percent of his or her total earnings,” according to the US Department of Education (2017).
Failure to meet these standards resulted in loss of federal funding and financial aid. In many cases, prominent for-profit universities and career colleges were forced out of business. The New York Times reports that in the first evaluation of debt-to-earnings ratios, approximately 800 programs, or 10 percent, did not meet the guidelines established by the Gainful Employment regulation. Nearly all of these (98 percent) were for-profit schools such as Devry University.
In place of the Gainful Employment regulation, set to expire in July of 2019, DeVos claims the Department of Education will collect a broader swatch of data on all higher education institutions—not just for-profit and career colleges—with the goal of making this data widely available to potential students.
DeVos has been a long-time advocate of for-profit education and has worked to deregulate the education market, particularly in her home state of Michigan, where legislation backed by DeVos in the early 1990s opened the door to for-profit K–12 schools. Michigan now leads the nation in the percentage of its charter schools run by for-profit corporations. DeVos is an appointee of President Trump, whose own for-profit real estate school, Trump University, was subject to two class action lawsuits and paid a 25 million dollar settlement in 2016.