How to better regulate higher education

That’s a positive development, but only if the Department uses this time to truly engage with members of Congress, the sector and other educators in a meaningful discussion of how to better regulate all of higher education.  To date, the discussion hasn’t been a discussion; it’s been an ideological shouting match.

What’s this regulation about?  Designed to keep students from choosing programs the Department deems bad investments of time and money, and primarily affecting for-profit career colleges, it requires more comprehensive disclosure for prospective students and a two-pronged test to measure program effectiveness.

It makes no sense for prospective students at career colleges to get completion, placement, debt load and other important information, while others considering the same majors at non-profit or public institutions don’t. That would be like requiring nutritional information on packages of food, but only in some grocery stores.  Why not require it be available everywhere for everyone to see? Oh wait, we do.   

Second, the test embedded in the regulation is flawed.  A test that predicts which programs are worthwhile would be valuable. But, if the test can be made to work, why not apply it to all career education programs at all institutions as well? Here are a few important facts. University of Phoenix (UOP), a for-profit, has a reported repayment rate of 44% and median student federal debt burden of $14,299. Georgia State University, a public university, has a reported 44% repayment rate and median debt burden of $17,935. Both are regionally accredited. Both miss a 45% USDOE repayment rate threshold. Shouldn't students at both institutions have the same protections?

Should a student and his or her parents considering Alabama State (a public university), which is regionally accredited, know that its repayment rate is 14% - among the worst in the nation? Under Gainful Employment, because Alabama State is a public university, the student and parents would not know that. Yet, an identically accredited for-profit offering the same career education majors with the same student debt and a repayment rate of 28% - twice that of Alabama State -- would be subject to termination from or limitations in federal student aid programs, denying its students access. Shouldn't Alabama State be subject to the same sanctions?

The obvious answer: of course.

Bottom line: the notion that we should do a better job of helping students make more informed choices that will leave them in better financial shape once they’ve earned their degree is smart.  Only political or ideological considerations would result in selectively applying the approach that does so. In any event, Gainful Employment, as currently constructed, won’t get us there.

Here's what will. Commit to universally applying Gainful Employment in a way that allows the time and provides the capability for all institutions to make changes needed to 'hit the mark.' Bring a broad base of affected constituents to the table to refine the rule. Commit to setting targets using visible data - such as BLS wage data - for assessing each program's potential. Recognize that if Gainful Employment (or any other regulation) has a built in tendency to pressure institutions to accept fewer otherwise qualified high financial need or high risk students it must be changed to eliminate that tendency.  Give students credit for performing as expected (and encouraged by the Department) against loan repayment time frames and terms, not against some arbitrary odd metric. Ensure innovation is not impeded. And, commit in the process to using real, comparable data to assess all schools' efficacy.

 Gainful Employment needs to be changed - so it helps fix what's broken without breaking what works. Then, it needs to be applied to all career education majors at all institutions. Only then will it achieve its potential to be the single test of efficacy that simplifies accountability and obviates the need for other indirect tests and limitations.

And, only then will it result in sound oversight that improves the landscape for its critical beneficiaries: students. All of them.

Randy Proto is the President and CEO of the American Institutes school group, which specializes in health care career education and serves over 2,000 students annually. It includes the American Institute College of Health Professions, American Institute and American Institute School of Health Careers located in Florida, and the Fox Institute schools in Connecticut and New Jersey.