Blumenthal & Murphy: Gainful Employment Rule Has Never Been More Necessary

[WASHINGTON, D.C.] – After the Department of Education released comprehensive new data showing that students who enroll in for-profit career college programs face lower wages and fewer job prospects than students at public institutions – even as for-profit students take on much higher student debt – U.S. Senators Richard Blumenthal (D-CT) and Chris Murphy (D-CT) called for increased scrutiny of the for-profit college industry and the full necessary resources to enforce the Obama Administration’s gainful employment rule.

“Indisputable evidence of lower pay and fewer job prospects for students at for-profit career college programs now calls for tough enforcement of rules that protect against their false promises. For far too long, this industry has avoided accountability for the false promises they sold millions of students,” Blumenthal said. “Under the Obama Administration’s gainful employment rule, these schools will finally be forced to show that they are giving students an actual return on their investment. Devoting resources to fully enforcing this rule is critical to making sure prospective students have access to the information they need to make the best decision for their future.”

“We’ve known for a long time that students who go to for-profit colleges earn much less than those who go to not-for-profit schools. This data isn’t surprising. But it should compel us to act,” said Murphy. “The reality is too many for-profit colleges cheat students and defraud taxpayers. The Department of Education needs to enforce existing regulations making colleges disclose how many graduates are able to find good jobs after graduation, and Congress needs to pass my Students Before Profits Act to hold schools and their executives accountable for ripping off students.”

The data released today will be used to determine whether career college programs meet the Department of Education’s “gainful employment” rule aimed at holding accountable career education programs that fail to help their students become job-ready and financially secure. Starting in January, institutions will be required to disclose program earnings and other information such as costs and graduation rates, as well as whether their programs are failing to meet the gainful employment standards, to current and prospective students. Programs that are unable to meet these standards will be ineligible for federal student aid.

Data released by the Department of Education today found that:

  • Overall, mean earnings of graduates of public undergraduate certificate programs are nearly $9,000 higher than mean earnings of graduates of for-profit undergraduate certificate programs.
  • Graduates of certificate programs at public institutions are more likely to have attended programs that provide training for higher earning fields, such as nursing, than graduates of certificate programs at for-profit colleges.
  • The median earnings of nearly a third of graduates of for-profit certificate programs are less than the yearly income of a full-time worker earning the federal minimum wage ($14,500) even as students take on debt to complete these programs.