Gainful Employment on Hold

by Daniel L. Bennett

If you are one of our loyal readers who has an interest in for-profit education, then you probably already heard rumors that the highly controversial gainful employment rule being levied by the Department of Education is being pushed back. According to the Chronicle:

The U.S. Department of Education will announce on Friday a new "timetable" for the release of rules aimed at the for-profit higher-education industry

It should come as no surprise that ED is putting this thing on hold given the serious criticism the rule has received (e.g - Parthenon Group, Charles Rivers Associates, Mark Kantrowitz) and the fact that ED received up to 130,000 comments on the rule that it is obligated to review, not to mention the political timing is terrible as midterm elections are in less than 40 days.

CCAP is generally among those critical of the proposal on the grounds that it was crafted in haste and its methodology is seriously flawed, it will decrease access to postsecondary education for many non-traditional students, it will likely add to the costs of providing an education, and the fact that the rules were designed to attack one sector while largely giving the others a free pass. We do however recognize that there are some serious issues in all of higher education (growing debt burdens, predatory recruiting, malfeasance, etc), and not just the for-profit world, that need to be eradicated and should be prosecuted. Taxpayers are forking over (perhaps the proper analogy is being knived for) hundreds of billions of dollars annually to subsidize so-called higher education, and many people on the receiving end of these expenditures, as supposed public stewards, are abusing their privileges.

Be Careful What You Wish For

by Daniel L. Bennett

The impending gainful employment rule has caused the for-profit sector and its investors a great deal of nervousness. Receiving little notice has been the community colleges that offer certificate programs designed to lead to a specific occupation that will also be subject to the new rule. It appears as though these folks are beginning to fret about the consequences of the proposed rule change as well, as Inside Higher Ed highlights:

Most of the controversy over the "gainful employment" regulations proposed by the U.S. Education Department has focused on for-profit higher education, but some community college programs would be covered as well, and the American Association of Community Colleges on Tuesday sent a letter to college presidents urging them to seek changes in the rules. The community college programs that would be covered are certificate programs of a year or longer that do not lead to a degree. The community college association is arguing that those programs should not be covered if, in combination with general education requirements, the certificate requirements would lead to an associate degree. The community colleges also want to see an exemption for programs in which fewer than 35 percent of students use federal loan programs.

It is somewhat ironic that a sector which often pats itself on the back because its students don't have to borrow much (due to huge subsidies) is worried about the new rules affecting its business. This should raise some questions about the community college sector and related public policy. For one, perhaps its vocationally-oriented programs are not doing a good job of training students for the workplace (despite popular rhetoric) and we should reconsider publicly funding them. Fairer competition would likely lead to improved offerings. We could still publicly support vocational education and retraining programs through a voucher-style program, rather than awarding money non-competitively to one set of service providers who may or may not be best suited for the job.

I also find it rather amusing that the community colleges, which have been somewhat critical and supportive of increased regulation of their competition, are begging for mercy and seeking an exemption from the new rule, especially given the tremendous 'low-price' competitive advantage that they already have as a result of massive public subsidization. The community college sector had a good thing going for it - massive subsidization (and hence protection) with very little accountability. Now that competition has heightened from the private sector in spite of its price advantage, it decided to try to enhance its competitive position further through the political process. Now, that same political process may wind up biting it in the rear. Perhaps this should be a lesson in being careful what you wish for, especially in seeking public favor through the political process.

New Gainful Employment Rules Proposed

by Daniel L. Bennett

After much anticipation and anxiety, The Department of Education has unveiled its new proposal for the gainful employment rule. Its initial ideas for redefining the rule were very controversial and met with much criticism, including some from yours truly, for attempting to define the rule in terms of an average debt to expected earnings metric, with schools exhibiting a ratio exceeding 8% losing eligibility for federal aid.  Today, ED reveleaed its latest rule proposal, which appears to be a slightly watered down version that offers a bit more flexibility, rather than a heavy handed backslap across the face to the entire for-profit sector . As Arne Duncan was quoted as saying in the Chronicle,

"The many good actors should be protected from being tainted or tarnished by the small minority that are doing a disservice to the industry" 

So what does the new rule have to offer? According the ED's press release, it:

would take into consideration whether former students are repaying their federal student loans and the relationship between total student loan debt and average earnings after a postsecondary training program

Fully eligible programs will either have at least 45% of their former students paying down the principal on their federal loans; or their graduates will have a debt-to-earnings ratio of less than 20% of discretionary income or 8% of total income. The programs would have to disclose their repayment rates and debt-to- earnings ratios unless they pass both these tests.

Ineligible programs will have less than 35% of their former students paying down the principal on their federal loans; and their graduates will have a debt-to-earnings ratio above 30% of discretionary income and 12% of total income. An ineligible program may not offer federal student aid to new students. It can provide one additional year of aid to current students, provided that it warns them about the high debt-to-earnings ratio.

Restricted programs are those that are not fully eligible or ineligible. Restricted programs are subject to limits on enrollment growth, and the institutions must both demonstrate employer support for the program and warn consumers and current students of high debt levels.

The Department's proposal does not lower a program's repayment rate as a result of students who may be in lower-paying public service jobs. Program completers who qualify for Public Service Loan Forgiveness would be counted as "paying down the principal of their federal loans". Borrowers in income-based repayment would be treated as successfully repaying their loans if their incomes are high enough to allow them to pay more than the interest on their loans.

The public has 45 days to comment on the rule proposal. After reviewing and supposeduly considering all comments, if the rule were to remain unchanged from its currnet form, ED indicated that

5 percent of all programs would no longer be eligible to offer their students federal student aid and 55 percent of all programs would be required to warn their students about high debt-to-earnings ratios

My initial reaction to the new rule proposal is that it remains misguided in that it fails to fundamentally change one of the biggest problems in all of higher education today, mainly that prospective students and their parents lack good outcome-focused information that would permit better decision making in the college selection process. Instead, the rule only requires those career schools which are borderline bad actors in risk of losing eligibility to the Title IV gravy train, according to the faulty metric and repayment rates, to warn consumers about high debt levels and default rates.

ED Announces Consumer Protection Rule Proposals, Delays Gainful Employment

by Daniel L. Bennett

You may recall that the so-called negotiated rule-making committee failed to reach agreement on 14 issues of Program Integrity earlier this year, leaving the final rule setting to The Department of Education (ED). Today (actually I heard about this yesterday), ED released its long awaited draft rules for public comment. It addressed 13 of the 14 issues, with the controversial gainful employment rule being delayed for further study. According to an Inside Higher Ed article

the department has chosen to hold off on proposing a specific "metric" to measure whether programs are preparing their students for gainful employment because “we want to get it right,” as Education Secretary Arne Duncan said in a statement.

Department officials say they expect to release the rest of the gainful employment proposal later this summer, with plenty of time to meet a Nov. 1 deadline for publishing a final version of the rules that would take effect on July 1, 2011.

Although the rule proposals do not at this time include a debt-to-income metric, they did spell out much need and welcome steps in providing consumers with more and better information as part of defining gainful employment. IHE noted that the proposal:

includes regulations requiring institutions to publish on their websites detailed disclosures related to programs that prepare students for gainful employment. At minimum, institutions would have to post the following for each program:

The occupations that it prepares students to enter, with links to the Department of Labor’s O*NET.

The on-time graduation rate of students in the program.

The cost of the program, including tuition, fees, room, board and other institutional costs.

The placement rate for students completing the program (by June 30, 2013).

The median debt load incurred by students who completed the program in the previous three years, broken down into debt from federal student loans, from private educational loans, and from institutional financing.

Although I've advocated for information disclosure as a better alternative to a price control mechanism (also here, here, here, here), I think that for-profit schools could one up this proposal. They should not only publish this crucial information on their websites, but also publish it in their other marketing materials, as well as provide it to students before they can officially enroll in the form of a disclaimer that students sign, indicating that they have received and understand the information.

Gainful Employment: A Slippery Slope

by Daniel L. Bennett

Ben Miller is a fan of the gainful employment proposal from the Department of Education that would impose a debt-to-income limit on vocational programs using actual debt of program participants and occupational wage data from the BLS (specifically, the bottom 25% of earners). While I agree with Miller's assessment that

asking for actual programmatic outcomes and earnings...could be immensely useful to either warn away consumers or help them make more informed decisions.

I respectfully disagree when he asserts that

the sky isn’t falling. It’s a big opportunity for better consumer transparency that’s on the horizon...

Gainful employment is not an improvement in transparency, it is a slippery slope towards more government interference in education and the private enterprise system. It will essentially establish a ceiling on tuition, for which many for-profit schools will struggle to meet thanks to the 90/10 rule which limits the percentage of revenues that a for-profit school can receive from federal aid programs to 10 percent. My hypothesis is that many schools set their tuition above the federal aid thresholds to ensure compliance with the rule. Having faceless bureaucrats dictate how much a private business can charge for its products or services is a slap in the face to the market system and will likely lead to adverse effects similar to those experienced with other government price control schemes (e.g. - supply shortage, price increases for alternatives).

Gainful employment will likely be a stepping stone towards central command of all of postsecondary education. How long before the feds start dictating prices of bachelor degrees or how many can be awarded? How long before the government decides who can study what at which college? This is precisely the reason that even non-profit representatives opposed the proposal during the negotiated rule-making session, and why our higher ed system has fought for so long to retains its autonomy. More government involvement will create even more market distortions in an already dysfunctional education system. While maintaining the status quo in higher ed is not acceptable, imposing a regulation that requires schools and programs to disclosure valuable information is one thing, but putting federal bureaucrats behind the decision-making wheel is quite another -- and destined for failure.

See my recent Career College Central article for more reasons why the gainful employment proposal is problematic.

Beating My Head on the Desk Won't Stop the Insanity

by Daniel L. Bennett

I've been openly critical of the gainful employment proposal being considered by the Department of Education (here and here). The proposed rule is overly harsh and would likely result in many programs and schools going out of business and hundreds of thousands of students being shut out of postsecondary educational opportunities. An analysis by economic consulting firm Charles River Associates concluded that up to 1/3 of the students currently served by for-profit schools would be denied access. An analysis by financial aid expert Mark Kantrowitz concluded that the proposed rule is flawed, unrealistic and would lead to unintended consequences.

While I generally think that for-profit sector does more good than harm, there is some anecdotal evidence of foul play in the sector. This is by no means pervasive among the entire industry, nor is it limited to for-profit schools (Kevin Carey recently highlighted the scam of Southeastern University that was knowingly permitted to occur over multiple decades). There are admittedly scam artists in every sector of society, including the government and non-profit world. Does this mean that we need to regulate ourselves out of jobs, economic growth and individual liberty in an unrealistic effort to safeguard every nook and cranny of our lives, turning over human responsibility to far-off bureaucrats who have proven repeatedly ineffective at protecting its citizens? We simply can't prevent every crime or wrong doing in society.

By and large, economic interventionist policies by the government have lead to unintended consequences that are far worse than the situation present before the rules were implemented. Individual decisions and markets are the best allocator of resources, not central economic planners. So what are the unintended consequences likely to result from gainful employment?

First and foremost, hundreds of thousands of students will be shut out of the educational opportunities to improve their lives. The public and non-profit sectors do not have the capability or capacity to absorb these students, nor do they offer programs or schedules that meet the needs of this segment of the population. This is a negative for college access.

Second, it will be counterproductive to making college more affordable and productive, as the for-profit sector is the one bright spot in postsecondary education today that is showing real signs of management efficiency and innovation. It would also weaken competition and restrict the supply of education, which as economics 101 tells us, will lead to an increase in price.

Lastly and as I mentioned earlier this week, it will attack our freedom and individual liberty to make decisions that have consequences. Are we really willing to surrender this rare freedom and turn over our decision making to bureaucrats and politicians?

Apparently this group of folks (a consortium of politically left and special interest groups) thinks that all of the above negative consequences are acceptable, as they have written a letter to Secretary Duncan calling for even stricter gainful employment rules.

The solution to the problems of misleading advertising regarding employment and high levels of debt are really quite simple:

Mandate that colleges disclose to all prospective students the typical level of debt occurred by their students, program completion rates, data on where students have been placed and how much they are earning, and what the likely debt-to-income ratio will be for students finishing the program. This information would give students all the information that they need to make an informed and rational decision on what school and program to pursue. If prospective students don't like what they hear, then they can vote with their feet and go elsewhere. Because of the incentives, schools would seek to offer programs that provide relatively high rewards for students, while programs with costs that exceed the benefits would likely go wayside, and thus, eliminating most of the problem. For the remainder, violators and cheats would be dealt with harshly with loss of Title IV eligibility and possibly criminal punishment.

Gainful Employment is an Attack on Freedom, For-Profit Industry Should Fight It

by Daniel L. Bennett

The Chronicle has extensive coverage today regarding the for-profit industry's efforts to stymie the gainful employment rule being proposed by the Department of Education. CHE has even developed a table detailing lobbying dollars spent and political contributions made by the industry. Democratic Congressman were the recipients of 70% of the for-profit industry's $400k in total political contributions, with George Miller (Chair of the House's Committee on Education and Labor) taking home honors as the top recipient of more than $70k in campaign contributions. On the Senate side, the top 5 recipients were all Democrats, with Harry Reid being the top recipient.

I've written in this space in the past about the implications of gainful employment (here, here and here) and have an article due out soon on the topic in Career College Central. I'm generally opposed to the Department of Ed's proposed metric, which would impose an unrealistic 8% student debt to income ratio that would force the closure of many programs and limit the career and college choices of students.

The for-profit industry has floated a counter proposal similar to what I have recommended in the past, namely that colleges provide full disclosure to prospective students regarding the debt that students at their school take on and the employment outcomes (placement rates, salaries, etc). This ought to be a respectable solution to those opposed to the for-profit sector in the name of consumer protection, as their main argument appears to be that students are lured into these schools based on false or limited information. If it is not and they continue to insist upon a top down approach in which bureaucrats decide how much debt is appropriate for a particular program, then these folks are obviously convinced that individuals do not have the capacity to make decisions that will affect their livelihood and should be stripped of decision-making rights in favor of turning such decisions over to the state. In other words, anonymous bureaucrats in far off places are better equipped to make decisions for people than the actual individuals themselves.

Here's the abbreviated case for full information disclosure:

If the students are presented with the information upfront, prior to enrolling, then they are responsible for the decision of whether to attend. If, for example, a prospective student is told that they will incur $25k in student loans, that their first job upon completion will likely pay $30k (likely to increase over time with experience), and that their monthly loan payment on that loan over a 10-year period would be $294 (which would be 12% of their income), then the student can make an informed decision of whether to pursue that particular program and compare it to other options. This presents the prospective student with enough information and potential career training options to make an informed decision.

The alternative, centralized decision making, will limit the number of options and essentially decide what fields that certain students (i.e. - those who don't have parents capable and willing to foot the bill) may pursue. This is an attack on freedom and only a few steps removed from the European education model in which students are directed towards a particular track (vocational or academic) early in their education - often middle school. This is in sharp contrast to the American tradition of a forgiving educational model that allows late bloomers the opportunity to pursue postsecondary education of their choosing.

Career College Association vs. Dept of Education, Round 2...Fight

by Daniel L. Bennett

Yesterday, I blogged about the double standards of the Obama Administration in its ruthless pursuit of strangling the for-profit education industry with a gainful employment metric. The Career College Association sent a detailed letter to Education Secretary Arne Duncan denouncing the current proposed metric, providing evidence from research that it commissioned from Charles Rivers Consulting and University of Chicago economist Jonathan Guryan which indicates that

18 percent of for-profit postsecondary programs would not satisfy the debt limit requirement of the gainful employment proposal

33 percent of students in for-profit postsecondary programs would be impacted.

[and] that by 2020, approximately 5.4 million students who are on track to attend programs would be denied access by the proposed regulation

The research also indicated that:

Because the limits on borrowing do not vary with the length of program, longer programs would be more severely impacted.

approximately 40 percent of students in 2- and 4-year programs would be impacted. We also estimate that the impact would not be limited to a few areas of study, but would impact a wide variety of programs.

The reports author, Dr. Guryan, described additional problems with the Department's proposed metric that are similar to issues that I mentioned in a post back in January, such as the regulation:

focuses on the ability of recent graduates to repay loans in the early years of their post-schooling careers.

it cannot logically make sense to say that the average student cannot afford to pay 8 percent of her annual earnings to cover student loans for 10 years if those loans paid for education that raised her earnings more than 8 percent each year for the rest of her working life.

A policy aimed at protecting students would compare the benefits of education and the costs of education. A key feature of education is that the costs are paid up front, both in terms of foregone earnings and tuition, and the benefits accrue over the entire working life. To focus
exclusively on the short-term benefits is to ignore the long-term benefits

the premise of limiting borrowing for education based on early-career earnings is inappropriate and would be harmful to low-income students who rely on student loans for access to education beyond high school.

[and] The use of the 10-year repayment length is another way that the regulation would overweight the early costs of education and ignore the future benefits.

The report concludes that:

Our analysis suggests that the ―unintended consequences‖—cutting off
access to hundreds of thousands of students who want postsecondary education—will be much more substantial than the intended consequence, which we believe to be—though we are not certain—reducing the number of students who over borrow.

To start, the Department of Education has not clearly defined what the problem is that the
regulation aims to address.

it should not be assumed that public postsecondary institutions, particularly
community colleges, would absorb these students.

Double Standards

by Daniel L. Bennett

Inside Higher Ed ran a story on gainful employment this morning, outlining the Department of Education's (ED) proposal to tie eligibility for Title IV funding to an arbitrary debt to income ratio for vocationally-oriented schools. Basically, colleges offering training in occupationally-specified fields would become ineligible for federal student aid programs if their average student debt exceeded 8% of the supposed entry level salary for a given occupation, as determined by BLS occupational wage data (specifically, the 25th percent of earners). The rumor mill has recently suggested that ED is softening its approach a bit, by making an exception to the rule for programs with completion rates above 50% and job placement rates above 70%.

Still, ED seems determined to plunge forward with the misguided policy that will cause more harm than good. I've written in this space several times on the negative implications of such policies and have an article coming out in next month's Career College Central magazine discussing the policy. To rehash briefly, the ED proposal, if retro-acted to 2003, would mean that

students pursuing 7 of 10 growing occupations would not have been able to borrow as much to pay for their training in 2008 as they were able to borrow in 2003, in real inflation-adjusted terms. Students pursuing training in the other 3 occupations would not have much more ability to borrow in 2008 than they did 5 years prior.the end result will be a reduction of educational options and access for low income and minority students, and a shortage of qualified employees to fill the demands of the labor force

In a separate post, I applied the same metric to the law profession and found that

the maximum total debt a law student could borrow [in 2008] would have been just under $44,000, or 2.3% more than he/she could have borrowed in 2003 after adjusting for inflation. Given the ED's proposal, this would also include any debt incurred as an undergrad, unless the student managed to pay it off before starting law school. FYI, the average law school tuition was just under $28,000 in 2007-08.

Despite its rhetoric to the contrary, I increasingly believe that the current administration is pursuing policies that are intentionally aimed at harming for-profit education providers. The gainful employment proposal obviously specifically targets the for-profit industry and is counterintuitive to the administration's stated goals that it wants to make college more affordable and accessible. Compare this proposal to the Income-Based Repayment plan that was recently signed by Obama, which provides borrowers with an option to limit their student debt payment to 10% of their income, after accounting for a living deduction (150% of the poverty level).

Why is it that students attending "preferred" institutions and pursuing so-called traditional education, are enabled to accrue huge amounts of student debt and be bailed out by the taxpayers when they are unable to find gainful employment after college, while students attending career colleges and pursuing vocationally-oriented education are demonized? Why is it that taxpayers are put on the hook for the institutions failing to prepare these individuals for the real world in the case of public and non-profit education, while we attack and hold accountable the institutions themselves in the case of for-profit education? This is a double standard that is based on nothing more than an ideological philosophy that profit is a 4 letter word and that the public and non-profit spheres are somehow pursuing the greater good.

Gainful Employment Update

by Daniel L. Bennett

I've written in the past (here, here) about the potential negative implications of the Department of Education's proposal to define gainful employment - a regulation that requires for-profit colleges to place their students in career fields related to their program of study. On March 22, 18 Congressional members sent a letter to ED Secretary Arne Duncan, urging him to reconsider. Apparently the message that the proposal is a disaster waiting to happen is started to resonate at the ED. Yesterday, there were reports from Investor's Business Daily that:

The Education Dept. has proposed exemptions to its so-called "gainful employment rule" that aims to limit student loans so they don't greatly exceed projected salaries. The exemption would apply to programs with a graduation rate of more than 50% and a placement rate over 70%.

and the Wall Street Journal reported:

The draft, apparently sent from the DOE to the Office of Management and Budget for review, isn't a public document but analysts at Credit Suisse and Signal Hill reported it included an exemption for institutions with a 50% completion rate and, of those who finished, 70% job-placement rate. That would reintroduce an exemption that had appeared in earlier drafts before being cut, the analysts said, and lower the completion rate from the previous 70% threshold.

However, according to a story from Inside Higher Ed:

the department's proposed regulations would leave intact language -- on which federal negotiators failed to reach agreement in February -- that would require that debt repayments of recent graduates of for-profit vocational programs be no more than 8 percent of the graduates' annual salaries.

Gainful Employment for Law School?

by Daniel L. Bennett

Yesterday, I posted some data on the maximum amount students pursuing careers in the 10 fast-growing occupations could have borrowed if the Department of Education's (ED) proposed metric to define gainful employment were retro-acted prior to 2003. Then I read an interesting blog by Brandon Platt over at Career College Central in which he suggests that a:

growing number of law graduates...can’t find the employment they felt they were promised, or even...able to find employment and begin paying back [their] loans at graduation

This got me to thinking about all of the horror stories about law school graduates having six figures of debt and unable to find job, and what the ED's proposed metric for gainful would imply for law schools. So, I returned to the BLS site and collected occupations data at the 25th percentile for lawyers in 2003 and 2008 and applied the same methodology that I used yesterday to calculate the max debt that a student could borrow for 3 years of law school.

In 2008, the 25th percentile earnings for lawyers was just under $75,000, an inflation-adjusted increase of 2.3% from 2003. Given this earnings figure, and assuming a 6.8 percent fixed loan rate (which is very conservative considering that many law students take out private loans with much higher interest rates), I calculated that the maximum total debt a law student could borrow would have been just under $44,000, or 2.3% more than he/she could have borrowed in 2003 after adjusting for inflation. Given the ED's proposal, this would also include any debt incurred as an undergrad, unless the student managed to pay it off before starting law school. FYI, the average law school tuition was just under $28,000 in 2007-08.

What this little comparison tells us is that the ED's proposal is unrealistic and way off base. A better idea than implementing some arbitrary metric that even the preferred public and not-for profit sectors could not pass, would be to require colleges to collect and publicize student outcomes data, such as job placement and average earnings, as well as program completion and loan default rates, so that students have enough information to make intelligent decisions.

Implications of ED's Gainful Employment Proposal

by Daniel L. Bennett

The career college sector is engaged in a fierce battle with the Department of Education (ED) over its proposed definition of gainful employment, which would create a debt payment-to-earnings ratio that would effectively cap student debt payments at 8% of expected earnings for career college students. It would do so be using the median debt payment of a program's previous 3 years of graduates in the numerator, and national BLS wage data for the 25th percentile income of the occupation for which the program prepared students to enter in the denominator. Programs with ratios exceeding 8% would be given the boot from the Title IV funding programs. This proposal has been met with extreme opposition from the industry, has been denounced by a Congressman, and was described as severely flawed by financial aid expert Mark Kantrowitz.

While I generally agree that the proposal would be extremely harmful and am fundamentally opposed to this type of implicit government price control, I decided to do some analysis to determine what the actual effects would be on 10 occupations for which the career colleges train students (all of which are on the BLS's list of 30 occupations with the biggest projected growth in employment for the next decade) to enter if the policy was retro-acted a few years. I first looked at the 25th percentile income for these occupation for both 2003 and 2008. I then calculated the max student debt for these occupations, given the ED's proposed definition, assuming a 6.8% fixed interest rate (the current direct lending rate). Then, I adjusted all figures into constant 2008 dollars to account for inflation. The results are in the below chart.

What I find is that, if the 8% ratio was retro-acted, students pursuing 7 of the 10 growing occupations above would not have been able to borrow as much to pay for their training in 2008 as they were able to borrow in 2003, in real inflation-adjusted terms. Students pursuing training in the other 3 occupations would not have much more ability to borrow in 2008 than they did 5 years prior. If any college's graduates were to finish with less real (inflation-adjusted) debt today than they did 5 years ago, then that college deserves a carrot for excellency in cost containment, not a brutal beating with a stick.

Since most students borrow money to pay for the education, limiting the amount that they can borrow also limits the professions that they are able to enter, especially for the lowest income students. It may even shut off routes for people to enter a given profession, as many colleges will be unable to offer training programs at a price that allows them to be in compliance with not only gainful employment, but also the 90/10 and cohort default rate rules, and will ultimately stop offering such programs. While this will likely appease some critics of the industry, the end result will be a reduction of educational options and access for low income and minority students, and a shortage of qualified employees to fill the demands of the labor force. Both results are negatives for the economy.