ACTA is an independent, non-profit organization committed to academic freedom, excellence, and accountability at America's colleges and universities.

ACTA is an independent, non-profit organization committed to academic freedom, excellence, and accountability at America's colleges and universities.

ACTA is an independent, non-profit organization committed to academic freedom, excellence, and accountability at America's colleges and universities.

A Convenient Scapegoat

November 17, 2014 by Alex McHugh

The second iteration of the Department of Education’s “gainful employment rule” will also be going to court. An earlier version was stuck down because one of the standards used—the loan repayment rate—was deemed to be arbitrary. But rather than re-writing the regulation to provide a fair standard of accountability that applies to all institutions, the Department of Education has instead chosen to continue targeting non-degree programs and the for-profit sector in particular.

This new iteration includes only a single metric: the student debt-to-earnings ratio. This is despite the department’s own admission during earlier litigation that it “has found no perfect single test” and its recommendation then that multiple measures be used together instead.

The department’s only change since the proposed regulation was first drafted in March was to drop the one other proposed metric, the student default rate. Tellingly, if that metric were included, 98% of the schools that would fail to meet the requirement today would be for-profits. Without it, that goes up to 99%, protecting almost all of the non-profit schools that would have failed under the earlier proposal. The department claimed the default requirement was dropped in order to “streamline” the regulation. Remember, this is a regulation that, in draft form, spans 841 pages and is immensely complicated in application.

Unlike the Department of Education, some supporters of the regulation are more clear about their goals, though they don’t think this version goes far enough: “This inadequate final rule makes it all the more urgent that the Obama Administration immediately take additional steps to enforce current laws to prevent the well-documented waste, fraud, and abuse by unscrupulous for-profit colleges.”

ACTA has long advocated for a more level approach when evaluating which schools can receive federal funding under Title IV. Rather than demonizing one part of the industry as responsible for all our woes, we should provide students with accurate and relevant data about different institutions so they can decide for themselves which will best serve their needs. Such a system would better serve students in a number of ways.

First, the for-profit schools targeted by the proposed regulation provide access to higher education to students that few other institutions would admit. As state funding to higher education, and to community colleges in particular, has fallen and is unlikely to increase again soon, for-profits have filled the gap, providing education for some of the most needy and least-prepared students.

Second, many students in degree programs at non-profit institutions are being failed by their institutions as well. The Association of Private Sector Colleges and Universities has noted that, at the 8% level set by the rule, many degree-granting programs would be shut down if the rule applied to them. Such a rule would:

…disqualify a law degree from George Washington University Law School, a bachelor's in hospitality administration from Stephen F. Austin State University and a bachelor's in social work from University of Texas. Further, according to the Department's own data, 43 percent of graduates from public colleges and 56 percent from private non-profit colleges would fail the metric.

Concern for students who graduate without having gained any education, yet are mired in debt, is well-placed. Unfortunately, the Department of Education seems bent on addressing only a small (8-9% of all students in 2012), politically-popular piece of the problem. What American higher education needs is real accountability, not the scapegoating of an important sub-section of higher education providers.


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