A true "education" is a profound and complex thing. Narrowing its purpose to "gainful employment" in a "recognized occupation" demeans our notions of "higher" learning" while shoe-horning its purveyors into a new, decidedly un-capitalist, field of "employment guarantor." Yet, the Department of Education’s "Gainful Employment Rule" does precisely that.
Should a school "guarantee" the employment of Classics majors when there are few Classics positions to be had? How about Flower Essence Therapists? Or Lawn Maintenance Specialists? I am all for grounding in the liberal arts, especially when schools deploy the great books shared inquiry model of St. John’s College Santa Fe (where I am discussing Joseph Conrad’s "The Secret Agent" this week), but I didn’t expect St. John’s to "guarantee" me anything upon granting me a Masters in 2002. In a free market economy, that notion is absurd on face.
However benign in its reformulated requirements, the “Gainful Employment Rule” leads one to question the very principle of governmental intrusion into education funding. Of particular concern is how the mandate animates the Department’s ongoing disposition towards social-engineering-via-student-loan.
To a marginal observer like myself, the mandate smells of the recent subprime mortgage mess, whose roots go back to an earlier government mandate (the Community Reinvestment Act of 1977 or CRA) that prodded banks – whose strictly fiduciary CAMELS rating can be subtly affected by their highly political CRA compliance — to make low-interest loans to high-risk borrowers. If we learned anything from the “Great Recession” – our collective punishment for the economic and moral bankruptcy of the government’s housing mandate — shouldn’t we query whether taxpayers should be green-lighting high-priced education loans to students (or parents/guardians of students) without the credit history, assets, and demonstrated willingness to repay such loans? Is it any surprise that short-selling savant Steve Eisman – a star of Michael Lewis’ “The Big Short” – has set his sights squarely on loan practices at for-profit education colleges? Especially when such colleges are caught between the need to graduate sufficient students to meet stricter matriculation standards and the concurrent demand that they grant loans to the highest-risk applicants (who are the most likely NOT to graduate)?
Few would dispute that the federal government can and should impose restrictions on institutions dependent on its $90 billion Title IV loan and grant largesse. But the pressing question is whether, at this critical hour, the government can afford such educational altruism, especially when our national debt stands at 14.25 trillion dollars, and when the government appears powerless to move students into occupations that would appreciably improve our GDP and gross tax receipts.
If the current debt crisis is a “Sputnik moment” for our country, shouldn’t ALL governmental programs be up for review? And, even if, as Senate Democrats propose, federal education funding remains sacrosanct during deficit negotiations, shouldn’t taxpayers at least be assured that the veracity of student loan applications has been empirically verified (especially after the housing crisis autopsy revealed that a large percentage of loans in many CDO tranches were based on deliberately fraudulent mortgage applications)?
What’s more, as part of the Democrats’ “grand bargain” to preserve education loan funding, shouldn’t we, at minimum, require a reasonable 2.5 GPA from loan recipients? Naturally, this GPA requirement would be easier to attain at less rigorous colleges and universities, and easily gamed by schools dependent on federal financial aid. Nevertheless, it would be a start, as we develop a more objective and stringent metric, such as the Education Department’s own NAEP, National Assessment of Educational Progress (a.k.a. “The Nation’s Report Card”), a high school exam that could morph into a yearly knowledge test of all Pell Grant and Stafford Loan recipients.
In other words, instead of the onus falling solely on educators to insure students get “gainful employment” to pay back government loans, maybe the onus should fall equally on the loan recipient to demonstrate his or her academic focus, drive, and worthiness. Currently, the ONLY academic requirement for continued receipt of federal student aid is that one show “satisfactory academic progress.” Schools generally translate this to mean a cumulative D+ or better average, while taking a full or near full load. Have we ratcheted down the academic expectations in this country to such a level that we now consider a D+ “satisfactory?” Really?
On July 8, the U.S. Bureau of Labor Statistics reported that unemployment in the country went up a notch to 9.2%. On the same day, we learned from staffing provider, Kelly Services, that three million jobs are going unfilled in America because applicants lack basic STEM (Science, Technology, Engineering, and Math) skills to even apply. If we deducted three million from the current 14.1 million unemployed, we would have a newsworthy percentage drop in unemployment.
These numbers show that our unemployment problem goes far beyond the tired political rhetoric about tax cuts and unemployment benefits. It is structurally rooted in a growing cultural, critical, and scientific illiteracy. As just one of many examples, right now in the U.S. there are twenty-five applicants for every unskilled construction job opening, but the inverse ratio for jobs in tech and computer science. If we are serious about generating “gainful employment,” shouldn’t we be free to tailor financial aid to students who major in fields that are most in demand, and that would most benefit the long-term competitive position of this nation?
As America seeks to win on a global economic battlefield, we must recruit, train, and fund AAA-rated students, from whatever ethnic, religious, or economic background, not students who have consistently demonstrated, from grade school through high school, their educational junk-bond status. In addition to providing a needed stick to prospective recipients of federal loan carrots, these reasonable achievement standards would simultaneously deter the more egregious marketing practices of for-profit colleges that troll for Title IV students in America’s most blighted, and, thus, most vulnerable, neighborhoods.
With these reforms, for-profit colleges would become engaged advocates for tougher primary and secondary school standards, and in the search for top college applicants. In addition, such standards would motivate for-profit colleges to partner with taxpayers in enforcing grade and test excellence as a requirement for Title IV aid, especially if Title IV funding was contingent on a sizeable percentage of a school’s student body passing a yearly knowledge-based exam.
With higher standards and vigorous testing, all educational institutions would become partners with corporations in advocating for the loosening of H1-B visa requirements for technically competent foreign students. Educational institutions would not only attract the planet’s best and brightest, but likewise meet the government’s gainful employment standard by funneling qualified graduates directly into our country’s tech, finance, and science sectors, who’ve decried for years the lack of properly trained applicants.
You see, the Department of Education has the cart before the horse. Simply enacting “gainful employment” standards is too little, too late. And enabling outrageously large education loans based solely on one’s economic or ethnic status, or because of the utopian idea that everyone deserves a college education, whether they want, need, or can afford one, is madness. It is precisely this mindset (everyone deserves a house) that got us into our present financial mess.
Instead, we need to solve the low retention, low loan payback, and low employment of our college graduates by solving the problem at the critical early junctures of recruitment, admissions, and financial aid, not after the fact as a dubiously prepared graduate receives his or her diploma in a field where few job openings exist.