Some Thoughts on the Gainful Employment Negotiated Rulemaking Session – Part 1

by DLA Piper

I attended the negotiated rulemaking sessions hosted by the U.S. Department of Education to discuss the Department’s proposed “gainful employment” rule.  As we reported previously, these sessions are a second attempt at enacting a regulation to regulate all programs at proprietary institutions of higher education and vocational programs (certificate programs) at other institutions based on a  debt to income measure.  The draft version of the Department’s gainful employment rule (which has many deviations from the 2011 published gainful employment rule that was invalidated by a court order; this was our take on the 2011 version) would impose a 8% debt to income ratio and a 20% debt to discretionary income ratio on these programs.

The negotiated rulemaking sessions (or “neg reg”) began on Monday, September 9 and lasted until 12 noon today (Wednesday, September 11).  There will be a final session from October 21 to 23.  The New America Foundation did a live blogging of the neg reg session (no recordings or transcripts of the sessions were permitted) that is worth looking at to get a sense of the discussion (Monday’s session, Tuesday morning, Tuesday afternoon, and Wednesday morning  Also, here is Inside Higher Ed’s take on the Monday and Tuesday sessions).

One of the impressions I am left with is that the Department may have made a mistake by only having two sessions.  If the goal of this process is to merely hear additional views that the Department can use in coming up with a draft rule, then the Department was probably fairly happy with the results so far.  The discussion over two days (the first day included a number of procedural issues not germane to the rule) was often wide ranging and presented a number of issues for the Department’s consideration – including issues with the draft rule and proposals for new rules altogether.  So, if the goal was educating the Department, this neg reg is going well.

If, however, the goal was to achieve consensus on a rule, the Department can’t be too happy.  Typically, there are three neg reg session to a process – the first is a “get to know everyone” session (a list of the negotiators is after the jump) that includes a broad discussion on the topics.  This is usually helpful and necessary, as many negotiators don’t know each other.  This conversation serves a useful purpose leading up to the substantive negotiations.  That is very much how the discussion felt this week.  While the negotiating committee was able to review all the topics the Department wanted discussed, there wasn’t a lot of time spent on specifics.  While issues with the rule were raised (Marc Jerome of Monroe College raised some particularly interesting points on how the rule would work in practice), few solutions to these issues were offered and there was no agreement from the committee on even whether these issues were problems.  If the Department believes consensus could be reached – and many have opined that it cannot given the committee’s makeup – the next (and final) session is going to have to be awfully substantive and efficient to achieve consensus.

I will have more thoughts (including on some policy ideas) in future posts.  But the thing I’m thinking now is we may need more time to do this right.

Below is a list of the gainful employment negotiators.  Each negotiator is followed by that negotiator’s alternate and categorized by the “community of interest” they are representing.  The  federal negotiator is John Kolotos, U.S. Department of  Education.  His counsel is Steve Finley, from the Department’s Office fo the General Counsel.

Community of Interest



Students Rory O’Sullivan, Policy and Research Director, Young Invincibles Kalwis Lo, Legislative Director, United States   Student Association
Legal assistance   organizations that represent students Eileen   Connor, Senior Staff Attorney, Special Litigation Unit, New York Legal Assistance   Group Whitney Barkley, Staff Attorney, Mississippi   Center for Justice
Consumer advocacy   organizations Margaret   Reiter Tom Tarantino, Chief Policy Officer, Iraq and Afghanistan Veterans of America
Financial aid   administrators  Kevin Jensen, Financial Aid   Director, College of Western Idaho Rhonda   Mohr, Student Financial Aid Specialist, California Community Colleges   Chancellor’s Office
State higher   education executive officers Jack Warner, Executive Director and CEO, South   Dakota Board of Regents Sandra Kinney,   Vice President of Institutional Research and Planning, Louisiana Community   and Technical College System
State attorneys   general and other appropriate State officials Della   Justice, Special Assistant Attorney General, Kentucky Attorney General Libby   DeBlasio, Assistant Attorney General, Colorado Department of Law, Consumer   Protection Section, Consumer Fraud Unit
Business and   industry Ted Daywalt, CEO   and President, VetJobs



Thomas Kriger, Research Director, Building and   Construction Trades Department, AFL-CIO, Director, Standing Committee on   Apprenticeship and Training
Minority serving   institutions Helga   Greenfield, Associate Vice President for College Relations and Director of Title   III and Government Relations, Spelman College Ronnie Higgs, Vice President, Student Affairs and   Enrollment Services at California State University, Monterey Bay
Two-year public   institutions Richard Heath, Financial Aid Director, Anne Arundel Community College Glen   Gabert, President, Hudson County Community College
Four-year public   institutions Barmak Nassirian, Director of Federal Policy Analysis, American   Association of State Colleges and Universities Barbara   Hoblitzell, Associate Director, Student Financial Support, University of   California Office of the President
Private,   non-profit institutions Jenny   Rickard, Vice President for Enrollment, University of   Puget Sound Thomas   Dalton, Assistant Vice President for Enrollment Management, Excelsior College
Private,   for-profit institutions—publicly traded Brian Jones,   General Counsel, Strayer University Raymond   Testa, Vice President of Government Affairs & Compliance, Empire   Education Group
Private,   for-profit institutions– not publicly traded Marc Jerome,   Board Member, Association of Proprietary Colleges in New York and Executive   Vice President, Monroe College Justin   Berkowitz, Vice President of Operations, Daytona College


Accrediting   agencies Belle   Wheelan, President, Southern Association of Colleges and Schools Commission   on Colleges Neil Harvison, Chair, Association of   Specialized and Professional Accreditors, Chief Academic and Scientific   Affairs Officer of the American Occupational Therapy Association


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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