That sound you heard Friday at 5:15 p.m.? That was the collective thud of the heads of for-profit college executives hitting their desks in dismay when they got a first look at the sort of loan repayment data the U.S. Education Department expects to use in its proposed new regulatory scheme, aimed at ensuring that vocational programs prepare their graduates for "gainful employment."
The numbers were lower than many observers (supporters and critics of the for-profit college sector alike) expected, and while officials of the companies immediately disputed the legitimacy of the department’s data and again challenged the government’s underlying regulatory approach, they also seemed to recognize that the statistics presented yet another threat. One company, Strayer Education, went so far as to schedule a news conference for 7:30 a.m. today — before the stock markets open — to explain, and presumably contest, the department’s numbers for its campuses.
Department officials couched the mountain of information they released Friday — the equivalent of a doctoral dissertation in statistics, it seemed to this under-educated reporter — in a slew of caveats, noting the many ways in which it is either incomplete or preliminary or otherwise inappropriate for reaching too-sharply-drawn conclusions, particularly about the eligibility of individual institutions or their programs.
That was especially true for the information related to two of the three measures the department proposes, which are designed to reveal whether the median debt loads of students who completed a given program in the three previous fiscal years are at or below what the department considers a reasonable percentage of their annual earnings or discretionary income.
While the department released several tables and reports to explain how its officials calculated those debt-to-income ratios, the complexity of those calculations, and the fact that they will be dependent on income and earnings data about students that most colleges do not have, mean that the income ratios largely remain an enigma.
The data released by the department do not provide 100 percent clarity about the other major "gainful employment" measure: the extent to which recent students repay their loans. Most notably, the information provided Friday looks at the performance of entire institutions, rather than of specific academic programs, which is how the department ultimately plans to make its assessment.
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