The US Department of Education has proposed reimposing regulations to measure paid employment for graduates of for-profit colleges and non-degree programs at nonprofit colleges.
The proposal was made ahead of the continuation next week of negotiated rulemaking on various student aid settlements. Crafting negotiated rules requires consensus among those who will negotiate the rules, including representatives of for-profit colleges, who are likely to oppose anything the Biden administration proposes on this topic. However, if the parties fail to reach an agreement, which is expected, the Department of Education may propose any settlements it wishes (although such settlements may be challenged in court).
The Department of Education’s proposals would revert to a system of measuring earnings versus debt for college graduates. But they would also require all institutions, including those not governed by paid employment, to provide the ministry with information on completion rates, debt and other trends by program.
Paid employment has been the subject of intense debate for more than a decade. The department first proposed rules on the subject in 2011. These rules were based in part on the debt incurred by graduates to attend the program versus the income they received after completion. Programs that were expensive and for which students borrowed heavily to pay tuition but generally didn’t earn much after completing were punished by eventually losing their eligibility to receive federal student aid payments. Representatives of for-profit higher education in particular criticized the rules as being too complicated. The regulations were reissued in 2014 following a legal challenge to the original rules, which were based on a similar debt-earnings structure for gainful employment programs.
When the data was first released in January 2017, more than 800 programs, collectively enrolling hundreds of thousands of students, failed to meet departmental standards.
In 2019, the Department of Education (under the Trump administration) rescinded the 2014 rule almost in its entirety.
When negotiated decision-makers last considered the issue of paid employment, in January, the department did not make a formal proposal.
Instead, the department just released a series of questions, such as “Which metric(s) and which threshold(s) (pass/fail thresholds) in these metrics best distinguish between programs that prepare students for income-generating activities. employment compared to those who do not, including at different levels of diplomas? For example, we seek feedback on the use of reimbursement rates; debt ratio; remuneration thresholds; and other measures. And “What are the benefits of allowing institutions multiple consecutive years to fail a metric based on postgraduate earnings? What are the risks of allowing multiple consecutive years?”
The coverage proposal for all colleges (under paid employment rules) is as follows: “On a website hosted by the [education] secretary (also where paid employment warnings will be posted), students and prospective students will be able to access key information to help inform their decisions on where to enroll and what to study. This website may provide information on completion rates, median debt, loan repayment, and median earnings, as well as critical context for this information, such as occupations the program prepares students for, length of program, program enrollment, program cost and borrowing rates. Institutions will provide the information necessary to access this website to prospective and enrolled students to help inform college choices. (Some of this information is currently on the College scorecard.)
Although this is the only part of the paid employment regulations that the Department of Education has proposed to apply to all colleges, several observers of the debate said it was important.
In previous discussions about paid employment, representatives of for-profit colleges have repeatedly said that they will only accept rules that apply to all colleges.
“Requiring all institutions to provide robust information on student outcomes is a step in the right direction. However, the department’s paid employment framework targets only for-profit institutions and non-degree programs…We continue to call on the department to use the quality assurance authority to hold all institutions in all sectors of responsible higher education,” said John Huston, vice president of legislative and regulatory affairs for Career Education Colleges and Universities, the trade group representing for-profit institutions.
David Baime, senior vice president for government relations at the American Association of Community Colleges, supports the proposal.
“Community colleges have long argued that the types of disclosures currently offered by the ED should be expanded for all higher education programs, if they are to be required for those that fall under the definition of gainful employment,” did he declare. “No doubt all institutions will take a close look at the processes the department proposes to use to generate this information, as implementation costs can be significant. But we know that students, families, and policy makers crave better data. »
Jon Fansmith, assistant vice president for government relations at the American Council on Education, agreed. He stressed that the details of the proposal, which have not yet been released, were important. But, he said, “The more information you can put in the hands of consumers, the better.”
Fansmith said, “It’s always hard to comment on something that’s going to change.” But he said the proposals overall show the Biden administration’s seriousness in going beyond the Obama administration to go after colleges that have tried “to evade regulations.”