The Effect of the Gainful Employment Regulatory Uncertainty on Student Enrollment at For-Profit Institutions of Higher Education

Abstract

In 2010, the Obama Administration proposed new regulations designed to hold institutions of higher education (IHEs) accountable for student outcomes. I examine the effects of the regulatory uncertainty surrounding these “Gainful Employment” (GE) regulations on enrollment at for-profit IHEs. I utilize informational debt rates of GE institutions along with enrollment data from the integrated postsecondary education data system to employ a difference in difference design that compares enrollment before and after the GE regulatory proposal at for-profit IHEs to enrollment at public and nonprofit IHEs. My results suggest that for-profit IHEs experienced slower enrollment growth relative to public and nonprofit IHEs in the post-GE period. Additionally, enrollment of low-income students appeared to be disproportionately affected by the GE regulatory uncertainty.