ED rulemaking includes input on controversial ‘gainful employment’ rules

“The Department has set out to address a serious policy problem, regulating pursuant to a reasonable interpretation of its statutory authority,” the federal court wrote after passing down its decision. “Concerned about inadequate programs and unscrupulous institutions, the Department has gone looking for rats in ratholes — as the statute empowers it to do.”

Advocates of the administration’s “gainful employment” regulations were disappointed last July when federal judge has struck down a key provision after a lengthy legal battle with lawyers representing some of the country’s largest for-profit college companies.

The court decision left “students and taxpayers exposed to unscrupulous schools that seek to swindle them and routinely saddle students with debts they cannot repay,” said Pauline Abernathy, vice president of the Institute for College Access and Success, a nonprofit research organization that seeks to make higher education more available and affordable saying it.

For-profit college enrollment has taken a hit in the interim.

Government figures released in October showed that total enrollment in higher education shrunk nationally in the fall of 2011 for the first time in at least 15 years. The overall decline was just 0.2 percent, but it was driven by a 2.9 percent drop in the for-profit sector, which offset an increase at 4-year non-profit colleges (for-profit colleges enroll about 11 percent of students overall).

Last fall, the Apollo Group, Inc., parent company of the University of Phoenix, announced it would shutter roughly half its physical locations, though current students will be able to continue in their programs. The announcement came after University of Phoenix enrollment numbers dipped from a high of 475,000 in 2010 to 328,000 students in 2012.