A Better Approach to ‘Gainful Employment’

On February 9, Senator Ron Wyden, Democrat of Oregon, introduced a bill on the Senate floor entitled the “Student Right to Know Before You Go Act.” The bill gained bipartisan and bicameral support when it was introduced in the House by Duncan Hunter (a Republican from California and chairman of the House Subcommittee on Early Childhood, Elementary, and Secondary Education).

Hunter and Wyden have been working together to increase the quality of educational data and improve transparency in measures of the success of colleges and universities. This proposed legislation was the product of this work. While its chances of passage are likely low, it is a smart piece of legislation that could help transform our expensive and inefficient system of postsecondary education.

A key provision of the bill would support states in expanding or creating postsecondary student level data systems that include measures of student success in the labor market (including average individual annual earnings by educational program, degree received and educational institution) from all institutions within the state, public and private (nonprofit and for-profit). It presents a much smarter approach to measuring what is called “gainful employment” than the U.S. Department of Education has managed so far.

In 2010, the Department of Education waded into the issue of the labor market returns of college degrees. This foray was tied to proposed regulations that would punish institutions whose students were not earning sufficient income to pay off their student debts. Whatever the merits of the idea, the department set off a firestorm with its regulations and with the quality of the data it released in August of that year.

The proposed regulations would have shut down a large number of the programs run by for-profit institutions plus some community college programs as well (like so much else surrounding the gainful employment debate, the number of programs affected was hotly contested). The department backtracked on the original regulations and last year issued watered down regulations. There was much to dislike about the department’s efforts, but one of the most problematic was putting the regulatory cart before the data horse. In short, the database to support the high-stakes regulations was at best thin and cast doubt on the department’s ability to base any gainful employment regulations on a sound foundation.

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