Should we regulate career colleges because the government owes low income students a job? That’s part of the message we’re getting from the Department of Education, which recently announced final regulations to penalize career colleges that don’t measure up. The purpose of the new rules is to prevent low income students from drowning in student loan debt because they can’t find decent jobs. The government hasn’t had a lot of success with this kind of stringent oversight of its own activities, including its efforts to reign in debt or to ensure better outcomes from public education. How can it justify a federal double standard, letting our money slip through its fingers while demanding accountability from colleges?
Will regulated career colleges guarantee jobs?
New gainful employment standards for career colleges that go into effect in July 2015 try to turn student loan debt into a guarantee of a middle class lifestyle:
Career colleges must be a stepping stone to the middle class. But too many hard-working students find themselves buried in debt with little to show for it. That is simply unacceptable,” U.S. Secretary of Education Arne Duncan said.1
A higher standard of living for low income Americans is a goal Washington under Obama admits it hasn’t accomplished. At its most shameful, the push to raise the minimum income turned to demands by Democrats to extort pay as high as $30,000 per year from businesses with a $15.00 per hour living wage.
Is it possible to balance loan debt with a job that makes it affordable? The goal of regulating career colleges is managing debt by guaranteeing incomes:
Under the regulations finalized today, a program would be considered to lead to gainful employment if the estimated annual loan payment of a typical graduate does not exceed 20 percent of his or her discretionary income or 8 percent of his or her total earnings. Programs that exceed these levels would be at risk of losing their ability to participate in taxpayer-funded federal student aid programs.2
The bullet points for the new guidelines are impressive. They include accountability, transparency, and better outcomes. Sound familiar? Accountability, transparency, and outcomes sound like the selling points for every bureaucratic initiative on the books. This one is all about bureaucracy, including an “interagency task force” for oversight and federal-state coordination to make sure career colleges measure up.3
Since the concern seems to be what we buy with taxpayer-funded student loans, how has regulation and oversight protected taxpayers from the public school system Duncan oversees?
Federal double standard: how accountable are public schools?
The gainful employment rules are all about making career colleges accountable:
The accountability framework defines what it means to prepare students for gainful employment by establishing measures that assess whether programs provide quality education and training to their students that lead to earnings that will allow students to pay back their student loan debts.4
Trying to make a connection between career education and finding a job is admirable, but should the government apply a measuring stick to outcomes it would never apply to itself or the teachers in its public school system?
Public schools accumulate debt and threaten to ruin taxpayers in states like Illinois with mandatory costs like exorbitant teacher pensions that have nothing to do with education outcomes. What do taxpayers get for their public education investment? In Duncan’s former Chicago Public Schools they get a record high 69.4% graduation rate for 2013-2014.5 We have been harangued to pay six-figure salaries to teachers who can go on strike and shut down schools as they did during the 2011 anti-Scott Walker protests in Wisconsin and recently in the strike in Waukegan, Illinois (see: Will Taxpayers Support Raising Teacher Salaries 165%?). We are required to educate illegal immigrants who rub elbows with the children of taxpaying citizens. Then, to add insult, many states subsidize their college tuition by lowering it to resident levels. To top it off, taxpayers have to hear arguments to hold teachers less accountable for the results of their instruction (see: How Government Treats Teachers Like Professionals).
While regulation-happy bureaucrats worry about a student’s inability to pay back loan debt, the Department of Education forecasts that it will pay out $2.4 billion in Pell Grants in error from 2014-2016,6 earning the program a place on the government’s payment accuracy high-error list. Liberal lawmakers could buy heaps of loan forgiveness with $2.4 billion.
America’s public school system is vast. Accountability and outcomes are hard to assess and harder to guarantee. Can we insist that private institutions guarantee students a job, or is this just another way to apologize for the failure to ensure opportunity and a segue to student loan forgiveness that, barring Republican midterm victories, would be at the top of the federal bailout list?
Higher education, whether a two-year community college or advanced degree, is all about the individual. Some make it. Some don’t. Can the government step in and force career colleges to guarantee success? Apparently, it can. Should it? Absolutely not.
The new regulations can be found here: https://www.federalregister.gov/articles/2014/10/31/2014-25594/program-integrity-gainful-employment.