We’re moving ever closer to the big “gainful employment” reveal. The Biden Administration has vowed to resuscitate the Obama-era gainful employment rules -with a twist. The original GE rules took aim at private, for-profit colleges and universities. The effect was spectacular, and I’m sure that’s what the administration was going for.
This time around, it appears as though the gainful employment rules (part deux) will set their sights not on institutions, but rather on programs. It also seems like post-graduation earnings is the yardstick that ED intends to use. The new rules aren’t yet released, but if they apply universally – that is, to all higher education institutions – public, two-year institutions could find themselves in ED’s crosshairs.
The pernicious policy of converting degree programs into non-degree certificates could come back to haunt places like Washtenaw Community College. The new gainful employment rules could act for higher education like CAFE standards do for the auto industry. Every year, automakers need to weed out the models in their fleets that have the lowest fuel economy. This approach allows vehicle manufacturers to meet the ever-increasing combined fuel economy standards for a manufacturer’s entire vehicle lineup.
Gainful employment standards would function similarly for higher education. When schools are penalized for their graduates’ poor earnings, they will weed out programs with the lowest earnings potential. Under the proposed rules, programs that fail to meet specific post-graduation earnings outcomes will no longer be eligible for federal financial aid.
This approach raises the question of how a school like WCC – which has deliberately eliminated degree programs in favor of non-degree certificates – would fare when ED starts looking at post-graduation earnings. Certificate programs typically don’t fare well in terms of earnings, especially when students substitute non-degree certificates for associate degree programs.
Ready or not, gainful employment rules are coming
It’s not likely that the gainful employment reboot will result in earthshaking closures of entire institutions. (It might, but that’s not the new intention of the policy.) By refocusing employment metrics on earnings at the program level, the Biden Administration can make the same point without generating the shocks that the Obama-era regulations did.
While some people would argue that getting rid of private, for-profit schools is positive, one cold fact remains. These schools not only survive but thrive largely because public two- year schools gave up on occupational and vocational education. By ceding that ground, public community colleges have made it difficult on themselves to re-enter that particular marketplace. Occupational and vocational education programs are expensive to develop, implement, and operate. They fill a community need for everything from nursing to skilled trades, but only at great expense to the student. I would argue that’s the reason they were publicly funded in the first place. Transfer programs are easier and less expensive to run, so they have a certain appeal to people who want to pretend that they can run a community college like a business.
Community college administrators should get to work on creating high-wage degree programs because it’s about to be “all about the Benjamins.”
Photo Credit: 401(k) 2012, via Flickr
