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Low-value educational programs in the crosshairs

For the last couple of days, I’ve been writing about the recently released request for information (RFI) by the Department of Education. The document solicits feedback from the public regarding potential ways to identify low-value educational programs. The RFI represents the strongest indication yet that the Biden administration intends to revive the Obama administration’s “gainful employment” rules.

The gainful employment rules targeted for-profit colleges; the Biden administration seems willing to extend its rulemaking to all educational institutions. Additionally, it appears to consider metrics other than student debt-to-earnings ratios to determine the value of a program.

The RFI signals the administration’s belief that federal financial aid is a form of investment. If that investment does not produce “value” for either the student or the community, then the Department of Education should terminate its investment.

Ultimately, the rule would not require a college or university to discontinue low-value educational programs, but the federal government will not authorize financial aid for students enrolled in a program that carries the “low-value” label.

Under such a rule, colleges and universities would need to collect and submit even more data regarding their graduates’ long-term employment and earning outcomes. To be clear, colleges and universities don’t have complete control over certain factors – like how much their graduates earn, where jobs are, or how many jobs open in any given year. But if these elements become part of the Department of Education’s metrics, colleges and universities must make firm decisions about the programs they offer, or how many students they admit into programs each year. Non-degree certificate programs will most certainly be looked at very carefully, if for no reason other than their questionable income-producing potential.

Debt may not be the hallmark of low-value educational programs

Additionally, the new rules will require institutions like WCC to provide evidence to back up their fluffy marketing claims regarding the employability of their graduates. The new rules may require institutions to disclose not only how much their graduates earn on average, but also whether their alumni are working in industries related or unrelated to their degrees. The final rules could also require institutions to provide income data disaggregated by race, gender, and ethnicity.

Initially, the Obama administration intended to publish rankings for institutions, under the assumption that ranking would put additional performance pressure on targeted institutions. While the ranking system never materialized, the Biden administration is talking about publishing a list of institutions whose programs do not meet whatever value standards the administration ultimately establishes.

Institutions must start doing a much better job of guiding students through the process of selecting degree programs and educating them (with actual facts) about their employability and earning potential upon graduation. Once implemented, the new rulemaking will likely force institutions to be more realistic and more transparent about the quality and cost of their programs. The only losers will be institutions that continue to peddle low-value educational programs.

Photo Credit: Oregon State University, via Flickr