The gainful employment (GE) rule aims to hold career-focused training programs accountable for student outcomes. The rule includes an earnings threshold that requires programs to result in graduates’ earnings being at least as high as earnings of a typical high school graduate in their state. The GE rule’s focus on postcompletion earnings does not account for what students were earning before enrolling or aspects of job quality separate from earnings. In this brief, we collected data from two career colleges with programs at risk of failing GE to examine students’ preenrollment earnings and surveyed students on their financial circumstances and the value they expect to receive from their education.
Why This Matters
Although the intent behind GE is clear, the rule’s implementation and scope raise important questions about how best to define and measure “gainful employment.” A singular focus on earnings outcomes may overlook broader dimensions of job quality and fail to account for students’ varied needs, goals, and circumstances. GE’s reliance on absolute postcompletion earnings also does not consider how much students previously earned. Many adult learners could enter programs with lower preenrollment earnings than GE’s earnings threshold might account for, which can make it difficult to see wage gains.
What We Found
The colleges we studied operate several programs whose postcompletion earnings fall below the high school threshold, but many of these programs appear to produce postcompletion earnings that in some cases are as much as double students’ preenrollment earnings.
Occupational segregation, labor market discrimination, and variation in local labor markets and cost of living can make programs less likely to pass GE if they enroll more women of color (who are disproportionally affected by occupational segregation and labor market discrimination) or are in rural areas (where labor markets and cost of living can vary significantly from urban areas in the same state).
Sixty-four percent of students surveyed (including those not working) were earning less than $30,000 annually before enrolling in their program. The high school threshold for their state is $32,686 in 2025 dollars.
Higher pay and personal fulfillment were the top two reasons surveyed students decided to enroll in their educational program.
Eighty-five percent of students surveyed plan to enroll in additional education, meaning they do not see their short-term credential as terminal.
How We Did It
We use administrative data collected from two for-profit career colleges and match these data with GE data from the US Department of Education to estimate preenrollment and postcompletion earnings for students who completed their program during the 2014–15 or 2015–16 academic year. We use a survey of current students to learn about preenrollment circumstances and the financial and nonfinancial value they expect to receive from their education.
