DOE’s justification for rescinding Gainful Employment rules distorts research

The Department of Education has rescinded the Gainful Employment regulations developed by the Obama administration. These regulations were designed to cut off federal student aid to postsecondary programs that produce earnings too low to support the debt students incur while earning credentials that promise to lead to good jobs. This action is a significant step toward removing necessary protections for vulnerable students.

In an effort to justify its action, the department cited research about community colleges in our 2017 book, Making College Work, seriously distorting its message.

Our work shows that unlike other community-college credentials, which are valued by employers, associate degrees in the liberal arts hold little labor market value as final degrees. The Education Department uses this finding to argue that the gainful-employment rules — which actually apply to non-degree programs at all institutions, not just the for-profits — unfairly singled out the for-profit institutions. The department rescinded these rules rather than applying them strongly and sensibly or improving them.

The problems some community-college students face in no way justify loosening the accountability of for-profit institutions. Most for-profit programs explicitly promise students preparation for specific occupations. General associate degrees are not directly career oriented; instead they are designed to lead to transfer to four-year programs.

As we note in our book, credentials from for-profit institutions often have less value than similar ones from community colleges, while students pay vastly more for them. Indeed, the evidence is even more negative now on the value of for-profit credentials than when we wrote our book.

Credentials from for-profit institutions often have less value than similar ones from community colleges, while students pay vastly more for them.

Moreover, debt loads are much higher among for-profit students than among those who attend community colleges. More than half of the students who earn certificates and associate degrees at public two-year colleges leave without debt. Only about a quarter borrow $10,000 or more. Tuition prices are much higher at for-profit institutions and the vast majority of students borrow; almost 60 percent of associate-degree recipients borrow $20,000 or more and about 20 percent of those earning short-term certificates in this sector borrow this much.

Given these facts, we clearly and explicitly argue for stronger regulation of the for-profit schools, through Gainful Employment or other such rules. Treating them differently than community colleges makes complete sense, in light of their stated goals and their worse records on all of these dimensions.

But the Education Department not only ignores our writings on for-profit institutions; they also distort and misinterpret our results on liberal arts associate degrees.

Though associate degrees in liberal arts have little market value on their own, they can be valuable for students who transfer to four-year institutions; and liberal-arts curricula in community colleges provide important general education for all students, even in occupational programs, no doubt improving their problem-solving and communications skills.

We therefore argue in our book that, while more students should be encouraged to earn associate degrees in high-value fields, we should also improve transfer to and completion at four-year schools — rather than abandoning associate degrees in liberal arts or regulating them.

It is important to recognize the strengths and weaknesses of all programs at all institutions. But the problem of students incurring high levels of debt while pursuing preparation for specific types of employment is unique to the programs covered by the gainful-employment rules. The decision to rescind these rules is a mistake, given the poor record of the for-profit institutions. To base that decision to any extent on a misreading of our research adds insult to injury. The department should not misuse such research to justify its ill-advised policy actions.