Ravalli Republic. August 09, 2014. By Rep. Joanne Blyton.
America’s higher education system truly is the envy of the world, but it isn’t without its challenges. We’ve seen accelerating costs to attend college leading to increasing student debt loads. And even with more Americans attending college than ever before, our country is still experiencing a “skills gap” whereby firms are finding it harder to fill skill positions with qualified workers.
These are big problems that need our attention. Unfortunately, they’re not just being ignored by the Obama administration, they’re actually being made worse by the Department of Education’s (DOE) strange quest to dismantle “for profit” higher education.
The latest volley comes in the form the proposed “gainful employment” rule, an 841 page mishmash of regulations designed to give DOE the ability to prohibit for-profit schools that don’t meet certain benchmarks from participating in federal student-loan programs.
The gainful employment rule is the type of classic, Orwellian double-speak we see so often from Washington these days. The effect it would actually have is to reduce employment opportunities because it would severely restrict education opportunities for many Americans.
Make no mistake, the objective of this rule is not to help students. It’s a blatant attempt to put a large swath of our higher education system out of business.
The tragedy of this rule is that those for-profit schools fill a valuable role as part of our higher-education system. There are roughly 3,500 career-focused, for-profit colleges around the country. Most offer technical degrees and predominately serve veterans, older students seeking second careers, the poor, minorities, and other non-traditional students.
The data shows that earning a degree or training from these institutions have positive effects on income. For countless Americans, this has been the ticket to getting a better job, escaping poverty, and improving quality of life.
DOE’s proposed gainful employment rule would deny student-loan eligibility to any for-profit school for which graduates have an annual, average monthly student loan payment in excess of 8 percent of their monthly incomes. The rule sets an additional requirement on student-loan default rates.
The gainful employment rule would not apply to other colleges and universities. And that’s probably a good thing since few of them would be able to meet the stringent requirements. The average non-profit, public university has a debt-to-income ratio of 12 percent. Private non-profit universities do even worse, with a 16 percent ratio.
The data shows that for-profit schools outperform private non-profit universities in the debt-to-income measure, on the average, at about 13 percent – nearly identical to their public university counterparts. Additionally, these students actually have loan default rates slightly lower than those at non-profit community colleges.
The data clearly shows that DOE’s gainful employment rule is arbitrary. Where it gets dangerous is that it also creates a great deal of new power for the Washington bureaucracy by giving them the power to pick and choose favored institutions. And it’s the students – many of them adults who make financial decisions everyday – who will suffer, robbed of the chance to improve their lives through training and education.
This rule needs to be scrapped. Washington bureaucrats may not understand that not everyone can attend a traditional, four-year college. And with our economy becoming ever more dependent on technology and innovation, these tech-oriented schools are exactly what we need to fill a growing number of vacancies in skilled positions.
The last thing we should be doing is limiting educational opportunities for Americans, particularly low-income Americans looking for new skills to lift themselves out of poverty.
Rep. Joanne Blyton is the Vice Chair of the Montana House Education Committee. She represents House District 59 in Carbon County and surrounding areas.