Thoughts on Preserving Education Access

I am on my way home from Phoenix, collecting my thoughts after attending the American Association of Cosmetology Schools' (AACS) Spring Operations Conference.  In addition to catching up with old friends, one of the highlights included meeting Congressman Robert Scott and hearing him speak on some of the education issues facing our nation.  I  also had the opportunity to participate as a panelist to discuss the current status of the Department of Education's rule making efforts.

A significant amount of time this weekend focused on the Department's proposed "gainful employment" regulations.  As people in the proprietary school world know, these proposed regulations are the Department's second attempt at regulation in this area.  Most provisions of the first set of gainful employment regulations were vacated by a federal court in June 2012.

The new round of gainful employment regulations are presented by the Department as an effort to identify the quality of a gainful employment educational program.  Under the proposed regulations, gainful employment programs are measured by comparing the debt incurred by program graduates with the incomes earned by such graduates.  If the debt-to-earnings ratio for a particular program meets the Department's standards, then students at that school remain eligible for participation in the federal student aid programs.  If the program's debt to earnings ratio exceeds the Department's standards, then the institution and its students risk losing the ability to participate in the federal student aid program.

This is a very simple overview of the proposed regulations.  The initial publishing of these regulations covered 841 pages.  Responses to proposed regulations of this magnitude have been as one might expect.  Many commentators believe that the Department is overreaching, while others think that the proposed regulations don't go far enough to protect students.

There are many opportunities to find issues and challenges in the course of analyzing 841 pages of regulatory language.  The public has until May 27, 2014 to provide comments to the Department with respect to these regulations.  If the past is any indication then there will be thousands of submissions covering every aspect of the proposals.  I will be one of those providing my two cents later this month.

After participating in the AACS conference over the past four days, one nagging thought is how these proposed regulations, if implemented as drafted, will affect student access to postsecondary education.  The proposed regulations do not focus on program outcomes such as graduation rates, student licensure rates or graduate job placement rates.  Program eligibility is tied solely to the debt-to-earnings ratios of the program's graduates.  A program's graduates may actually be repaying their federal student loans.  Theoretically a school could have 0% loan default rate.  Nevertheless, if earnings are not enough when compared to debt levels, then participation in the federal student aid programs may be jeopardized.

My concern is that by focussing solely on debt and earnings ratios, the Department may actually limit access to postsecondary education for those who need it the most.  Congressman Scott addressed this very issue in his remarks to the conference on Saturday.  Focussing solely on students' economic outcomes could place schools located in economically challenged areas in jeopardy because jobs are harder to attain in such areas.  Schools located in more affluent locations with identical program offerings would have an advantage in their efforts to satisfy the Department's proposed standards.

The Department's stated goal with the gainful employment regulations is to improve education quality and access.  However, as drafted these regulations may actually work to limit access to potential students who most need an education to improve their job and career opportunities.