If regulators are going to start asking if some kinds of higher education are actually worth it, it would be pointless to exempt others from scrutiny.
If regulators are going to start asking if some kinds of higher education are actually worth it, it would be pointless to exempt others from scrutiny.
C olleges and universities proudly flaunt their “nonprofit” status while many of their graduates are mired in debt and their highest-paid employee is their football coach. Why, then, are they getting a pass on accountability standards?
That should be the central question this month as Department of Education regulators gather to revive an Obama-era rule called “gainful employment.” The original goal and underlying principle were laudable: Federal funding ought to be cut off from colleges that leave graduates with underpaying jobs and mountains of debt.
The rules, however, were lopsided and insulated degree programs with similar or worse outcomes at public and nonprofit institutions from meaningful scrutiny. With very few exceptions, they applied only to students enrolled in educational programs at for-profit colleges and nondegree programs (e.g., certificate and diploma programs) at public and nonprofit institutions. In other words, the same protections weren’t afforded to the roughly 12 million undergraduate students enrolled in degree programs at public and nonprofit schools.
This giant loophole would make the “gainful employment” rule practically meaningless. As we’ve learned, the line between for-profit and nonprofit colleges is almost indistinguishable. A recent study found that thousands of academic programs at heavily subsidized public and nonprofit institutions would fail to meet the gainful-employment standard because their graduates do not go on to earn enough to pay back their student debt.
Students and families are rightly concerned about whether the “traditional” college experience is worth the significant investment. Compelling evidence to the contrary is everywhere, thanks to data that wasn’t readily available a few years ago:
A bachelor’s degree in anthropology from Ithaca College costs $132,656, on average, and two years later, graduates are earning $19,227. A philosophy degree from Oberlin costs $142,220 and graduates two years later make $18,154, on average. At Syracuse, a bachelor’s degree in studio and fine arts costs $137,888; two years later students who got one are earning an average of $17,624.
As they sit down to update the rules, regulators should ensure that they are fairly applied across all institutions regardless of tax status.
During the rulemaking process, agencies must base their reasoning and conclusions on the record and consider research and data submitted during the pre-rule and proposed-rule stages. But much of the information the department relies on conveniently excludes the growing body of research that shines a light on the many failing programs at public and nonprofit institutions, especially at the bachelor’s and graduate levels. These programs also deserve significant scrutiny from federal and state policy-makers, and their students deserve similar consumer protections.
The 13 non-federal negotiators appointed by the department to the rulemaking committee have a historic opportunity to establish an accountability and transparency agenda that is developed fairly and applied equitably across institutions of higher education regardless of their IRS classification.
This is especially important since earlier this week the department circulated a draft of proposed changes for negotiators to consider during their meeting next week. The proposed changes would still leave public and nonprofit institutions off the hook. How? By requiring them to disclose certain performance metrics, such as median earnings and debt, while not holding them accountable for poor outcomes. However, the department would still strip federal funding from career education programs that fail to meet the gainful-employment standard.
If negotiators cannot achieve consensus on a new rule, the department would benefit from developing a proposed rule without being bound to the committee’s ideas. Without the equal application of safeguards for programs at public and nonprofit institutions, public and nonprofit institutions can continue offering taxpayer-subsidized programs with poor employment outcomes and focus scrutiny on their competitors in the for-profit sector to push them out of the marketplace.
This is not about protecting one segment of the higher-education sector; it is about restoring fairness and trust in higher-education accountability. When laws and regulations treat all institutions fairly and equitably, it improves access and choice for families to make informed enrollment decisions. This has the benefit of saving billions in taxpayer dollars from being funneled into institutions of all tax statuses whose programs fail to deliver a positive return on investment.