This past May, the U.S. Department of Education (ED) released its long-awaited Gainful Employment (GE) rule as part of a massive trove of new regulations designed to establish new safeguards for university students. The ED insists this new rule is needed to protect students from “unaffordable debt or insufficient earnings from career development programs.” However, in practice, this new rule will have disastrous consequences for students and the higher educational landscape in general.
This is because the GE rule would unnecessarily erect new barriers to students looking to access a nontraditional education by placing stringent regulations on proprietary and private career colleges that offer career development training. These regulations are designed to suffocate career college programs by denying them access to Federal aid should they fail to meet certain arbitrary “performance standards.” These standards stipulate that students must have affordable levels of school debt relative to their earnings and that those earnings must exceed that of high school graduates in their same state. Strangely, traditional public and expensive private 4-year universities are exempt from these same standards even though it is these institutions that are primarily responsible for the student debt crisis. Indeed, 79 percent of the nation’s 32,000 GE programs are offered by public and private universities while just 21 percent are offered by for-profit colleges.
It is also worth noting that even a rudimentary search of ED’s College Scorecard reveals that numerous programs offered by traditional degree-granting institutions would fail the newly proposed GE rule. For instance, the average university graduate owes as much as $33,500 a year after leaving school. The only reasonable explanation for the ED’s decision to exempt non-profit institutions from the same regulations is because of a deep disdain for schools that operate outside of the traditional higher education landscape. This is unfortunate because opinion surveys have consistently found that business leaders think that alternative education pathways are a viable alternative to university. Other research suggests that most employers believe in prioritizing skills over degrees, with 72 percent reporting that degrees are “not a reliable signal for assessing the skills of a candidate.” Yet, the ED remains profoundly distrustful of alternative education.
Consequently, more than 700,000 students – roughly the population of the District of Columbia – stand to lose access to the educational programs of their choice if the GE rule takes effect. These students will have little choice but to apply to traditional four-year institutions, many of which are expensive and unlikely to offer an equivalent degree. Some students may discontinue their education altogether, having initially chosen to pursue a nontraditional education for a reason. Such an outcome should be troubling to anyone who values closing the skills gap and promoting equal access to education.
It is simply not the ED’s responsibility to decide what type of educational institution a student should go to. Only that student knows what’s best for them and the new GE rule threatens to take that choice away by unfairly discriminating against certain types of institutions that offer students a non-traditional education. The ED should return to its original mission to “promote student achievement and preparation” for the world by “ensuring equal access to education.” Part of that mission involves maintaining objectivity and refraining from choosing winners and losers in the higher education landscape.
Nate Scherer is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us at www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal.