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Low financial value should raise concern at WCC

Yesterday, I wrote about the Biden administration’s apparent plan to resume the Obama-era “gainful employment” rule in some way. Recently, the administration solicited comments from the public regarding the metrics the Department of Education should use to measure “value.” The administration intends to identify what it terms low financial value programs and withhold federal financial aid.

In early assessments of the proposed model, as much as 30% of programs at public institutions would fail the value test. Community college programs may be exceptionally vulnerable to the Department of Education’s value tests. Recently released data from the Georgetown Center on Education and the Workforce shows why.

The Center examined aggregated post-graduation earnings data from over 4,400 institutions in all 50 states and at all credential levels. In Michigan, an associate degree produces a median monthly income of $2,767 ($33,200). A non-degree certificate produces a median monthly income of $1,800 ($21,600).

Neither of these income levels constitutes a living wage ($39,900) for a single adult in Washtenaw County. Whereas the Obama gainful employment test measured a graduate’s debt-to-earnings ratio, the Biden model seems to be headed toward somewhat softer ground. In the solicitation for public comments, the administration seems open to considering elements not strictly limited to earnings and the cost of acquiring a credential.

For example, the Biden RFI asks the public to comment on ways to measure the “nonfinancial value” of a program. This may allow the administration to properly assess the value of certain low-wage programs like childcare work. Paradoxically, a parent’s ability to participate in the economy is fully dependent on childcare, yet somehow, childcare workers are only worth $15/hour.

Low financial value standard poses larger questions

The low financial value standard should be a concern for Washtenaw Community College. WCC has gone all-in on non-degree certificates and now issues so many that it is no longer considered a two-year school. If most graduates are holding credentials that provide the lowest return on investment, and the Biden calculation looks at more than just the debt-to-earnings ratio, WCC’s non-degree certificate strategy could come with a heavy price tag.

The ultimate goal of Biden’s low financial value project is to create a list of the lowest of low-value programs. The Department of Education will then selectively withdraw federal financial aid from programs that have landed on Biden’s Naughty List. Credentials that generate $1,800 per month are a lot closer to “low-financial-value” than those that can generate a living wage.

It’s time for WCC to re-evaluate its non-degree certificate strategy for a number of reasons. First, if the low return-on-investment in non-degree certificates prohibits students from using federal financial aid for them, that’s a problem for the College. Second, if the low return on investment in non-degree certificates prevents students from getting a job that generates a living wage, that’s a larger philosophical question. Is it either moral or desirable to prepare someone for permanent low-wage employment?

Photo Credit: Tyler, via Flickr