The Parthenon Group’s Study Finds Department of Education Gainful Employment Regulations Based on Flawed Analysis

Proposed Gainful Employment Metrics Unfairly Penalize Schools that Serve Minorities and Low-Income Students

BOSTON--()--The Department of Education’s proposed Gainful Employment (GE) rule is based on metrics that measure a school’s student body more than a school’s outcome, according to an analysis by The Parthenon Group (Parthenon), a leading advisory firm focused on strategy consulting.

“It is puzzling that ED did not include more of these student factors, all of which are available through ED’s own sources, or those like BLS and other public sources.”

The study, “Gainful Employment Rule Measures the Characteristics of the Students, Not the Effectiveness of the Programs”, is based on the re-creation of an analysis by the Department of Education, which has publicly maintained that the proposed Gainful Employment regulations don’t penalize institutions serving disadvantaged students, arguing that there is virtually no relationship between student characteristics and program performance.

However, using both publicly available data and proprietary student-level data collected from Gainful Employment programs, Parthenon’s analysis found the exact opposite: Student characteristics actually account for the majority of variation in program performance under the GE rule.

The list of student characteristics that impact student outcomes is long and includes everything from race and age to degree type and attendance status, the report notes. While the Department included race, age, gender and Pell eligibility as variables in its analysis, it failed to include undergraduate aid, enrollment status, and degree types – all of which have been proven to impact student outcomes. The study says: “It is puzzling that ED did not include more of these student factors, all of which are available through ED’s own sources, or those like BLS and other public sources.”

“As we began to analyze the data and methodology, it became increasingly clear that the Department of Education was not using a complete set of data, nor a transparent methodology to back up their statements,” said Chris Ross, a Partner at Parthenon and co-author of the study. “The GE Rule as proposed by the DOE is effective at measuring the type of students enrolled in a program but it does not – and cannot – measure the success of the program in preparing its students for gainful employment. The Gainful Employment regulations as they currently stand unfairly penalize institutions that serve low-income, minority students.”

Parthenon’s study was commissioned by the Association of Proprietary Colleges (APC) and co-authored by Mr. Ross and Nigel Gault, Partner and Co-Chief Economist at Parthenon. The full report can be accessed on Parthenon’s website by clicking here.


The Parthenon Group is a leading advisory firm focused on strategy consulting, with offices in Boston, London, Mumbai, San Francisco, Shanghai and Singapore. Since its inception in 1991, the firm has embraced a unique approach to strategic advisory services built on long-term client relationships, a willingness to share risk, an entrepreneurial spirit, and customized insights. This unique approach has established the firm as the strategic advisor of choice for chief executives and business leaders of Global 1000 corporations, high-potential growth companies, private equity firms, educational institutions, and healthcare organizations.


The Parthenon Group
Kerry Erwin, +1 617-478-4687