Coalition Statement on Gainful Employment Regulation Delivery to OMB

Tue May 3, 2011 6:11pm EDT

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Coalition Statement on Gainful Employment Regulation Delivery to OMB

In response to the U.S. Department of Education's statement that it had sent the proposed gainful employment regulation to the Office of Management and Budget (OMB), Coalition for Educational Success Managing Director Penny Lee released the following statement:

“With the gainful employment regulation now at OMB, we urge officials there to give the proposal their most thorough scrutiny. From the start of the regulatory process, the U.S. Department of Education has aggressively pushed for a regulation that will shut out the very students who have the most to gain from Title IV student aid – minorities and nontraditional students– at a time when the U.S. needs more skilled graduates to fill jobs in health, technology and business fields. Career colleges enroll more than 3.2 million students and minorities represent 38% of degrees conferred at career colleges.

“We find it shocking that the Department has spent much of the past year pursuing a regulation it simply does not have the authority to promulgate. This is a view shared by many members of Congress, including Chairman John Kline and Rep. Rob Andrews, who have been very clear that the definition of “gainful employment” is the purview of Congress, not the Department.

“It is noteworthy that the Department chose to proceed with the rule despite the fact that nearly 300 members of the U.S. House of Representatives, including 58 Democrats, voted to stop its implementation in February. Just last week, a bipartisan group of 118 members of Congress appealed directly to President Obama requesting that the Department withdraw the proposed regulation and work with Congress to enact meaningful reforms to higher education.

“Ironically, the proposed gainful employment regulation will undermine President Obama’s goal to have the highest percentage of college graduates in the world by 2020.

“This regulation was developed through a biased and nontransparent process. Just recently, it was reported that the Department’s Inspector General is investigating the role Wall Street short-sellers played in development of the gainful employment regulations. Department officials appear to have provided material non-public information about the substance and timing of the gainful employment regulation to Wall Street investors who had “bet short” on the career college sector.

“From the very start the regulatory process was biased, beginning with the panel of negotiators involved in developing the regulation which included only one career college sector representative out of 17 members. E-mail traffic shows the Department picked organizations and individuals that were most interested in harming career colleges.

“Senator Mike Enzi recently requested that the Department make public all materials related to the development of the regulation, so that a full understanding of outside influence on the Department can be made. Additionally, Senator Enzi has requested that the SEC look into communications between the Department and short-sellers.

“At its core, the proposed gainful employment regulation is driven by anti-business ideology and will kill jobs at a very critical time in our nation’s economic recovery. Career college employees have already lost thousands of jobs just on the threat of the gainful employment regulation. If the originally proposed gainful employment regulation moves forward, it will eliminate in excess of a hundred thousand jobs in the higher education sector, destroy education opportunities and block a critical pathway to employment for millions of students.

“Furthermore, the regulation fails to meet every standard of the President's recent Executive Order concerning new Federal regulations. A comparison of the regulation against the elements of the President’s Executive Order to improve regulation and regulatory review reveals that it fails to achieve a proper balance to preserve free enterprise while protecting people and businesses from abuse.

“We have reached out to the Department in an effort to identify best practices in key operational areas that transcend and complement the work of regulators. It is our hope that together all of higher education can continue working to provide the very best education that our country’s young people deserve.”

About The Coalition for Educational Success

The Coalition for Educational Success includes many of the nation's leading career colleges, serving more than 350,000 students at 478 campuses in 41 states. Career colleges provide training for students in 17 of the 20 fastest growing fields. The Coalition advocates for policies that support wider access to higher education, particularly for non-traditional students including full-time workers, workforce returners, working parents, minorities and veterans.

The Coalition for Educational Success
Noah Black, 202-295-8797
Noah.Black@harbourgrp.com

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