Intro to 'Gainful Employment' rules: The U.S. Dept of Ed created 'gainful employment' rules for for-profit educational institutions after studies showed that for-profit colleges, places like ITT tech, etc., had student bodies taking on big federally-backed student loans and graduating to a dearth of jobs. The rules said: If you want your students to be able to get student loans to attend your institution, you have to show that a certain percentage of graduates get jobs.
This is not controversial on two grounds: (a) you are a for-profit institution. If those profits are really the student loans of people you ought to know should not pay them back, what you are really doing is funneling federal dollars in the door on the backs of people who will default and ruin their credit to add to a long list of troubles.
(b) Most for-profit institutions are vocational programs. Their sales pitch on television, radio and internet is simple: Better degree = better job = better wages. If that promise doesn't bear out - and I don't mean per person, I mean across the board - then we need to suspend federal support.
I am surprised that for-profit colleges are so baldly going after non-profit colleges (what one would consider 'traditional' colleges) with the claim of equal treatment. First, the data doesn't back them up. The very reason for 'gainful employment' rules in the first place was the distance between student loan default rates from traditional colleges and these new for-profit colleges. The traditional colleges are the baseline that we've been ok with for years. There are two objections to this: (a) That non-profit colleges include ones with huge corporate deals and campuses and TV deals - how is that really non-profit? (b) Coupled with that is a sense that these colleges lock out the population seeking for-profit institutions on the basis of academics. Even if we set aside the fact that that translates into de facto discrimination on the basis of class, it is unfair to compare the repayment rates of a self-selected group of academic achievers to those who have not achieved. It is literally penalizing C students because their employment rates are not equal to that of A students.
Fair, but that doesn't change the fact that institutions focusing on the C students are not giving them more opportunity. Indeed, the numbers indicate that with more debt and no jobs, this population is worse off. That leads to the second point - the long-term solution to this has to be supportive, not destructive. Gainful employment is destructive - it aims to withhold from institutions that don't meet certain standards. That would leave the market without educational options for what is a predominantly low income and minority population. But America needs more craftsman, manufacturers, and other skilled laborers. So we need to find a way to support this education using something closer to the traditional non-profit college model. I don't know enough to set a path for this, but I have to imagine it is possible.