WALL STREET JOURNAL: Making ‘Profit’ a Dirty Word in Higher Education

Career College Central Summary:

  • Opinion from Steve Gunderson

    • On Oct. 30 the Obama administration put out a news release boasting about denying access to higher education for nearly a million students, cutting off their path to career skills and the middle class through a “gainful employment” regulation. This regulation prohibits students enrolled in programs at certain institutions of higher education—primarily for-profit institutions—from receiving federal student aid unless the program can show that their graduates’ annual loan payments do not exceed 20% of discretionary income, or 8% of total earnings.
    • The Education Department’s new rule—all 945 pages of it—has nothing to do with protecting students from taking on too much debt, ensuring accountability of higher education, or saving taxpayers money. We know this is true because if you applied the regulation to a law degree from George Washington University, a bachelor’s degree in hospitality administration from Stephen F. Austin State University or a bachelor’s in social work from University of Texas, the programs would all fail to meet the standard.
    • According to Education Department data, if the regulation were fairly applied across all of higher education, 43% of graduates from public colleges and 56% from private nonprofit colleges would fail the department’s debt-to-earnings standard and their programs would lose access to federal financial aid. The Education Department gives these institutions a pass while coming down hard on students attending for-profit institutions.
    • At a congressional hearing in April, Education Secretary Arne Duncan was asked why the gainful employment regulation doesn’t apply to all programs in higher education. He punted, claiming that the development of the college rating systems would address the rest of higher education. In reality, the present administration has targeted for-profit higher education for years, through narrowly focused regulations that have been struck down by the courts.

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THE WALL STREET JOURNAL

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