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The Negotiators


INSIDE HIGHER ED.  AUGUST 1, 2013.  By Paul Fain.  The U.S. Department of Education this week contacted people it has chosen to participate in a negotiated rule-making session on gainful employment. That list of names is emerging, as several participants confirmed that they had gotten the nod for the two blocks of meetings, which begin in September.

The group includes representatives from for-profit institutions as well as fierce critics of the sector. Participants were selected to represent the various segments of higher education from which they hail. Both observers and negotiators said they anticipated an interesting few days of rule-making.

Some of the participants (see box with partial list) or their alternates told Inside Higher Ed that the department notified them that they had been selected as negotiators, unless otherwise noted.

A lengthy, bruising fight led to the crafting of a previous round of gainful employment regulations, which seek to set standards for measuring how recent graduates of vocational programs, mostly at for-profits, fare in the job market.

A federal judge last year struck down those rules, which would have imposed penalties on colleges if they slipped below standards for loan-repayment rates and debt-to-income ratios. For-profits and their advocates said the standards were arbitrary and unfair. Consumer advocates said they were too weak.

The Obama Administration's second-term Education Department decided to take another crack at drafting gainful employment regulations -- from scratch -- rather than continuing to fight the court’s ruling on the first version.

For-profits had pushed for that debate to occur as part of the renewal of the Higher Education Act, which is the law that governs federal financial aid. But the department decided to move ahead in September. And the feds opted to create a standalone session for gainful employment rather than folding it into a broader negotiated rule-making that might also include discussions of fraud protection or state authorization of distance education.

Both sides of the looming gainful-employment fracas said the department appears determined to push hard for gainful employment rules that will seek to crack down on for-profits. 

The group of negotiators is unlikely to reach a consensus on gainful employment, said Teddy Downey, a financial analyst who tracks the for-profit industry. As a result, he said the session is likely to be an "open forum" on the gainful-employment proposals the department might consider.