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Ohio proposes gainful employment rules

It seems like state legislatures are getting a little cranky with colleges and universities about the value of their degrees. Ohio is the latest state to take up gainful employment legislation to force colleges and universities to be more transparent with students about the costs and financial outcomes of their degree programs.

Last year, New Jersey Governor Phil Murphy signed into law rules that require “performance quality standards” for colleges and universities. Earlier this month, Texas Governor Gregg Abbott signed into law a new budget formulation that rewards (and punishes) schools based on their performance. Even the federal government is getting into the act with the new “gainful employment” rules.

Ohio House Bill 27 passed 88 to 1. The bill, if passed by the Ohio state senate and signed into law, will require Ohio higher education institutions to provide students with an information sheet that contains the projected net cost of a degree program, the duration of financial aid packages, the difference between grants and loans, and an estimate of the monthly student loan payment for a degree program. And here’s the kicker: the school must also disclose post-graduation data on “outcomes” for former students who have completed the program.

According to Adam Matthews, the author of the bill who represents District 56, northeast of Cleveland, he’s hoping the legislation would help students identify programs that will cost more than they produce in post-graduation income.

That also seems to be the purpose of the New Jersey law, the Texas law, and the Department of Education’s gainful employment rules. More often than not, where there’s smoke, there’s fire.

Gainful employment complaints aren’t going away

Even absent student loan debt, students need to know how much money they can expect to make with a college degree. Colleges and universities aren’t doing a good job of identifying (and eliminating) degree programs that have low income potential. No one goes to college so they can have a low-paying job. Nonetheless, some occupations – even necessary ones – pay less than others.

Having earnings data on hand would enable colleges and universities to identify those occupations that are both low paying and necessary – like child care workers, teachers, social workers, librarians, emergency medical technicians, firefighters, and home health aides – and challenge the legislature to develop ways to supplement the pay of these positions.

Gainful employment rules will act for degree programs like CAFE standards do for cars. At some point, you have to leave the poor performers behind. States like New Jersey, Texas and now seemingly Ohio are already there.

Photo Credit: Kimli