• September 3, 2014

House Votes to Cut Higher-Education Spending, Delay 'Gainful Employment' Rule

The U.S. House of Representatives voted on Saturday, 235 to 189, to approve a bill that would slash spending on student aid and research and temporarily bar the Education Department from enforcing a rule that threatens the survival of some for-profit colleges.

The spending bill (HR 1) would finance the federal government for the remainder of the fiscal year. It would cut the maximum Pell Grant by 15 percent, or $845, and eliminate dozens of education programs. It would also reduce spending on the National Institutes of Health to 2008 levels and set the National Science Foundation's budget $150-million below its 2010 level.

The bill heads to the Senate in early March, where both the cuts and the measure affecting for-profits, contained in an amendment, face Democratic opposition.

Senate appropriators are expected to offer their own spending bill that would adopt the five-year spending freeze that President Obama called for in his State of the Union speech, though it's unclear if the bill would exempt education and research from the freeze, as Mr. Obama proposed.

The amendment affecting for-profits, which was passed Friday, 289-136, would prohibit the department from using federal funds to enforce its proposed "gainful employment rule" in the 2011 fiscal year, which ends September 30. That delay, backed by the House's Republican majority and more than four dozen Democratic members as well, would give for-profit colleges and their allies more time to block or overturn the rule, which would cut off federal student aid to programs whose borrowers have high debt-to-income ratios and low loan-repayment rates. The Education Department is expected to issue a final rule in the coming weeks.

The amendment would also bar the department from using federal money to enforce new rules that will require for-profit colleges to report more information about student outcomes and to notify the department when they create new programs.

During almost an hour of debate on the amendment on Thursday, supporters argued that it would preserve students' right to choose which college they attended. They decried the gainful-employment rule as a job-killing measure that would put students' academic decisions in the hands of bureaucrats and jeopardize the nation's economic recovery.

"This is an attack on the private sector of higher education," said Rep. John P. Kline Jr., a Republican of Minnesota, chairman of the education committee, and a sponsor of the amendment. "This is an assault on students' ability to find a school that fits their needs."

Opponents of the amendment defended the gainful-employment rule, saying it would protect students and taxpayers from programs that overpromise and underdeliver. They pointed to for-profit colleges' heavy reliance on taxpayer support and high student-loan default rates as arguments for greater federal oversight.

"A career-education program should only receive federal financial aid if the price of its education is justified by its outcomes," said Rep. Rosa L. DeLauro, a Democrat of Connecticut.

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