‘Gainful employment’ rule provides lesson on developing policies that stick

On June 28, the Department of Education rescinded “gainful employment” regulations, which was one of the most controversial and litigated of President Obama’s higher education agenda. It’s ironic that in a time when Republicans and Democrats agree on so few issues, the one issue where there is bipartisan agreement — a need for greater accountability in higher education — caused the two groups to become so bitterly divided on regulations that attempted to hold schools more accountable. 

The lesson? Process matters, and sidestepping Congress means you can win short-term policy battles, but still lose in the end.

Once a skeptic of executive power, Obama, according to The New York Times, became one of the most prolific regulators in modern presidential history. For most of his term, he faced a Republican-controlled Congress. Party leaders could not seem to come together to do much of anything consequential, including keeping the government funded. There is plenty of blame to go around on political impasses, but the president was determined to move forward with or without Congress. In his 2014 State of the Union address, the president stated flatly that “wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do.”

But moving without Congress had actually been happening for years. The Department of Education announced its intent to regulate the definition of programs that led to “gainful employment” in the fall of 2009, and regulations were first proposed nine months later after a failed negotiated rulemaking.

Officials from the Obama administration were quick to point out that postsecondary institutions were unlikely to have agreed to additional regulation, so pressing forward was justified. And while that may be true for some in the for-profit sector, where gainful employment regulations hit hardest, the aggressive implementation schedule, combined with the fact that the Department was still releasing implementation guidance after reporting deadlines had passed, felt like a “gotcha” to most schools. Schools from the nonprofit and public sectors that would have otherwise supported the idea of measuring and shutting off access to student aid funds for failing programs moved from neutral to opposed. 

Meanwhile, the very fact that the Obama administration went around Congress to push through such an aggressive regulatory package only deepened political divisions. Yes, Republicans in Congress opposed gainful employment, but the process intensified their opposition to the point where they not only attempted to repeal the regulation but to ban the department from ever regulating on the matter again.

Now, with the onset of a new administration bent on rolling back those regulations, it’s clear that what one administration regulates, another can undo just as quickly. Today, President Trump is unwinding many of the Obama-era regulations, including gainful employment. What happens in 2020, or 2024, or in every presidential election to come? Schools, at great expense, are experiencing something akin to regulatory whiplash.

A better question might be to ask what would have happened had the administration and Congress worked together to hold subpar programs more accountable? Legislation has far more staying power than regulation. In fact, given how infrequently major pieces of legislation pass nowadays, compromising on program-level accountability and disclosure would have likely had more impact and less controversy, despite the fact that neither Republicans nor Democrats would have been 100 percent happy.

Compare gainful employment regulations with another politically divisive issue: the Affordable Care Act, or ACA. Republicans have taken aim at the ACA since its passage in 2010, and it’s been used as a tool to whip up grassroots support and opposition ever since. And yet, it persists because it was passed into law. Yes, the Trump administration has tried to weaken the law since taking office, but the law has survived — and the longer it persists, the lower the odds that it will be repealed. In fact, as support continues to grow, many Republicans are reportedly moving away from an ACA repeal as part of their 2020 election bids.

The ideological underpinnings of gainful employment make sense. The idea that postsecondary programs should be measured, tracked and defunded if they consistently lead to poor student outcomes has merit. But process matters. Compromise is tough work and requires patience. Compromise is not always politically expedient. And regardless of whether one supports the last administration, this administration or a future one, the lesson from gainful employment is this: If presidents want to create lasting change, they must do it as the founders of our republic intended, by working through — not around — the elected legislature.

Justin Draeger is president and CEO of the National Association of Student Financial Aid Administrators. Follow him on Twitter @justindraeger