A Few Words on ‘Gainful Employment’

The big higher education news this week is that the Obama administration released its “gainful employment” rules aimed squarely at beleaguered for-profit colleges, which are the schools most likely to offer programs that are explicitly about supplying job skills. This attack does not seem to come because for-profits are objectively worse performers than the rest of the decrepit Ivory Tower, but because it is easy to demonize institutions that—unlike much of higher ed—are honest about trying to make a profit. Oh, and because going after the real culprit—an aid system that gives almost any person almost any amount of money to go to college—would require federal politicians to take on a system they created, and that makes them look ever-so-caring.

Perhaps the only unexpected thing about the regulations is that they do not include cohort default rates—the percentage of an institution’s borrowers defaulting on their loans within two or three years of entering repayment—among the assessments of aid worthiness. Instead, they just use debt-to-earnings ratios. The American Association of Private Sector Colleges and Universities—proprietary colleges’ advocacy arm—suspects this was done because including the default rate was projected to ensnare some community colleges, and the administration wanted this to be all about for-profit institutions.

There is reason to believe this may be true. The administration has lauded community colleges as the Little Schools That Could for a long time, and, indeed, directly compared them to for-profit schools in its press release for the new regulations. “The situation for students at for-profit institutions is particularly troubling,” they wrote. “On average, attending a two-year for-profit institution costs a student four times as much as attending a community college.” What didn’t they mention? According to federal data, completion rates at community colleges are around 20 percent, versus 63 percent at two-year for-profits. The data aren’t perfect—they capture only first-time, full-time students who finish at the institution where they started—but it is a yawning gap that illustrates a crucial point not just about gainful employment, but overall higher education policy: emotions and political concerns, not objective analysis, seem to drive it.

And speaking of objective analysis: We will be hosting what should be a great, diverse panel discussion on Wednesday, November 5, that will look at the changing face of higher education—including, no doubt, gainful employment—as well as offer predictions about what the previous night’s election results might mean for higher education. Hope to see you there!