- Sens. Warren and Sanders joined 6 of their colleagues in calling for a strengthened gainful employment rule.
- The rule would cut off federal aid to schools that offer programs that leave students with more debt than their degree can pay off.
President Joe Biden has taken steps to crack down on schools that offer degrees to students that won't pay off the debt they took on — but Democratic lawmakers think he can go even further to prevent an endless cycle of repayment after graduation.
Last week, Massachusetts Sen. Elizabeth Warren and Vermont Sen. Bernie Sanders joined six of their Democratic colleagues, including Senate Majority Whip Dick Durbin, in urging Under Secretary of Education James Kvaal in a letter to strengthen protections for students that enroll in "low-financial-value programs" — "postsecondary programs that saddle students with unaffordable debt and provide low financial returns."
The lawmakers wrote that with tuition continuing to increase, students are forced to take on more debt, making measures to increase transparency about the value of college degrees all the more important. One way that can happen is through the gainful employment rule, which cuts off federal aid for schools that offer career and certificate programs that leave students with a large of amount of student debt compared to their likely post-graduation earnings.
It was first established by former President Barack Obama in 2014, intended to prevent students from excessively borrowing loans they would not be able to repay given the degrees they earned. However, former President Donald Trump repealed the rule in 2019, and Biden pushed off the rule's reinstatement to July 2024 at the earliest.
"To further ensure institutions are held accountable, we support the reinstatement and strengthening of the forthcoming proposed gainful employment rule to ensure career education programs at for-profit and non-degree institutions lead to a job in a graduate's field and allow a graduate to repay their student loan debt," the Democratic lawmakers wrote.
"We urge the Department to take immediate action to publish and implement the rule as soon as practicable to ensure harmful actors are held accountable for enrolling students into low-quality programs," they added.
While for-profit schools have been accused in the past of misrepresenting their programs to students and engaging in fraudulent behavior, the gainful employment rule applies to almost all programs offered by for-profit schools, along with certificate programs at public and nonprofit schools. Alongside the reinstatement of this rule, the lawmakers also called for the Education Department to prioritize relief through borrower defense to repayment claims, which are claims borrowers can file if they believe they were defrauded by the school they attended.
As Insider previously reported, Kvaal in 2018 called Trump's repeal of the rule "negligent" when he was serving as the president of the Institute for College Access and Success.
"It's one thing to say we're struggling to implement this," Kvaal said at the time. "But to say we're going to ignore this regulation because we've encountered logistical problems, I think it's negligent and failing to carry out their responsibilities."
Advocates have also pushed for the reinstatement of the rule, along with other measures to prevent schools from offering degrees that won't pay off post-grad. The Project on Predatory Student Lending and Student Defense — two borrower advocacy groups — submitted a comment to the Education Department last week, saying that "if programs are of little or no value to students or the public, there is little reason to either encourage student investment of time and money or commit taxpayer funds to support the institution."
A department spokesperson told Insider last year that the "administration is committed to preventing a future student debt crisis by holding colleges and universities accountable if they leave students with mountains of debt or without good jobs."