Gainful employment rules are unfair to for-profits and their students (essay)
Building Walls to the Middle Class
Last week, for the first time in the gainful employment regulatory process, the U.S. Department of Education revealed its true motivation and bias against private-sector education and the students who attend our institutions.
While defending a regulation that limits access to higher education and obstructs a pathway to the middle class for new traditional students, Education Secretary Arne Duncan and Deputy Director of the Domestic Policy Council James Kvaal hid behind the assertion that the gainful employment policy is designed to grow the middle class and protect students.
Nothing could be further from the truth.
The regulation does not apply to all of higher education, therefore it cannot protect all students, and it will limit access to the very postsecondary institutions that serve lower-income students trying to join the middle class through new career skills.
What this boils down to is the unfortunate reality that the Education Department engaged in a sham negotiated rulemaking process with the sole goal of reaching a predetermined conclusion that will severely limit access to higher education and opportunity for millions of students based on the type of institution they attend.
The department estimates one million students will lose access to postsecondary education, but neither Duncan nor Kvaal offered a realistic solution for how to serve these historically overlooked and underserved students or the millions more denied access once this regulation is promulgated.
In addition to the students denied access to critical career training programs, the economic reality is that others will be harmed when reduced numbers of students enrolled make the programs or possibly the entire institution no longer viable.
The department’s regulation will result in the new traditional student -- working adults, minorities and people with scarce financial resources -- seeing their access to higher education and prospects for better employment dramatically reduced.
Individuals interested in careers with lower starting salaries, such as communications, psychology, visual and performing arts, and social work will be barred from receiving the same federal aid as their classmates choosing more lucrative fields.
All of this because of an institutional bias by the current Education Department against the private sector’s involvement in the delivery of postsecondary education -- something that has been a key element of America for generations.
At the heart of this sits the department overreaching its statutory authority to interpret the “gainful employment” language in the Higher Education Act, the federal law that governs financial aid, as authorizing it to evaluate program eligibility on the basis of complicated debt calculations.
As Senator Lamar Alexander noted last week, the fact that it took the Department 841 pages to define two words in the Higher Education Act – longer than the law itself – “shows exactly what is wrong with Washington and its desire to overregulate institutions of higher education.”
Even with all those pages, the department uses an arbitrary one-size-fits-all approach by not taking into consideration the level of preparation and the characteristics of entering students.. As a result the department has created the perverse incentive for institutions to avoid enrolling low-income and minority students.
America’s private sector institutions strongly support accountability that applies to all programs recognizing the diversity of students and institutions, as President Obama has promised in creating a rating system. We would support measuring outcomes and performance for all programs across higher education based on quantitative indicators like: retention and progression rates, completion, employment of graduates, earnings and graduate satisfaction.
What we object to is a regulation imposing an arbitrary debt-to-earnings metric as the definition of what is or is not academic quality.
We cannot stand silently by as a regulation is promulgated that would fail programs (if it were applied to them) like a bachelor’s degree in journalism from Northwestern University, a law degree from George Washington University Law School and a bachelor’s degree in social work from Virginia Commonwealth University. These programs get a pass since the department has chosen to focus on a narrow band of programs that serve the new traditional student.
The purpose of the federal financial aid programs has always been to help provide disadvantaged students access to higher education. It is incredible that this administration is on the verge of promulgating a regulation that limits access to education for disadvantaged students based on the very factors that caused them to be disadvantaged in the first place.
Steve Gunderson is president and CEO of the Association of Private Sector Colleges and Universities.