A new law, signed in July by New Jersey governor Phil Murphy, could indicate a new accountability trend in higher education. New Jersey Assembly Bill 1695 requires the state’s Department of Labor and Workforce Development to “establish performance quality standards for career-oriented programs of study offered by institutions of higher education, degree-granting proprietary institutions, and private career schools.” In other words, New Jersey has adopted gainful employment standards for its higher education institutions.
The new law applies to both public and private two-year, four-year, and private, for-profit career training schools. The legislation requires the schools to publish data including cost of attendance, graduation rate, program faculty information and employment data for each program’s recent graduates.
Ouch, man.
We will not have to wait long to determine the impact because the new law takes effect immediately.
Prospective students will be able to find each program’s two-, three-, four-, and six-year graduation rates. The graduation rate data must also appear demographically; by major; by student-athlete status; by transfer status from two-year to four-year colleges, and to which institutions students transferred.
In addition, all institutions must provide detailed cost information regarding all aspects of a program. This includes the cost of a program with and without financial aid; the relative level of indebtedness a student can expect; and the comparative costs of a program for students with and without athletic scholarships.
The law also requires each institution to disclose the full-time/part-time status of each faculty member in a program, and the percentage of courses in a program taught by each.
And then there is the gainful employment and earnings data.
The new law is a consumer’s dream, and an institution’s nightmare.
Failing gainful employment test has consequences
The new law has teeth, too. Schools that fail to demonstrate that they exceed the state’s gainful employment standards face sanctions, including the revocation of the right to grant degrees and/or certificates for programs found lacking.
The new law is painful to read because the state’s frustration with its higher education institutions is brutally obvious. And the problem with laws like these is that they tend to catch on. When one state makes new restrictions or regulations work, other states line up to do the same. Subsequent adopters often use the language from early adopters as a model for their own legislation. (With the added benefit of hindsight.)
You might think that this approach to oversight came from New Jersey’s Republican legislators. You would be wrong. This is an initiative by the Democrats, who control the Assembly, the Senate and the Governor’s Office. According to Governor Murphy, the gainful employment law intends to protect students against unresolvable debt. It is a late-game reaction to language in the Higher Education Act of 1965 that prevents people from discharging student loan debts in bankruptcy.
Currently in Michigan, we can only hope that a future legislature takes up gainful employment rules for higher education institutions. Requiring higher education administrators to defend high-cost, low-return programs annually is long overdue.
Photo Credit: Daniel Lee, via Flickr
