New Gainful Regs: For what will it profit a man if he gains the whole world and forfeits his soul?

For what will it profit a man if he gains the whole world and forfeits his soul? — Matthew 16:26, something called The Bye-bul? 

Not to get all Old Testament on that thing, but this verse came to mind as I woke up to news of the new gainful employment regulations released today. It’s the kind of verse I know best because southern mothers scream it at you for all manner of social violations. But, I digress.

The Gainful Employment Rule “requires schools to provide their students with an education adequate enough for them to pay their college loans back” so that they will be gainfully employed after they graduate from college. That’s from the Education Department website. The Rule is a procedural thicket that has gained ideological significance only because its viewed as the first (or last?) line of defense for (or against?) predatory (or democratic?) enrollments at for-profit colleges.

Ed Central has a good breakdown of what of the Rule changed and what remains the same.

The consensus appears to be that political maneuvering to the tune of tens of millions of dollars and numerous lobbyists weakened the Rule.

I am inclined to agree even as I continue to argue that gainful should not be at the center of these debates. In fact, to the extent that we argue about gainful it is a political win for the for-profit college sector AND politicians because it crowds out other debates.

One of the biggest potential issues from the new Rule is what Ed Central sums up thusly:

This final version rests on only one accountability measure: a ratio of the amount of debt graduates from a postsecondary program took on compared to their earnings…The single measure is surprising because the version of the rule released in March also included a second indicator that looked at the percentage of student loan borrowers that defaulted on their loans within three years of leaving school. This was the same as an existing cohort default rate measure institutions must address, only applied at the program level as well. This measure had value in that it included all students who borrowed for a program, whereas the debt-to-earnings rate only looks at graduates. This matters, since we know dropouts account for about 63 percent of student loan defaulters.

If we are measuring the efficacy of credentials by graduates, the incentive to address the reality of those who “swirl” in and out of higher education over a life course is pretty weak. And swirling is a function of socio-economic indicators like parental status, wealth, income, and especially labor market conditions. If I went to school to get a job and then get a job while I’m in school (and, duh, I need a job), I may leave school. But given the changes in job tenure and rising instability among low wage occupations (precisely the kind that make enrolling in school for a credential really attractive) I’m likely to need to return to school when the next job disappears or becomes untenable.

This is, by the sector’s own words, the primary population it serves.

In this set up, for-profit colleges become better sieves – stratifying students in favor of those with the preconditions to persist, graduate and earn employment — while benefitting financially from the casting a wide net for student aid dollars of those without those preconditions.

Some say the Administration went soft on the new Rule. Probably. But I’m more interested in the narrative of political hopelessness that emerges. Somehow, I am to believe that gainful is all the Administration has in its toolkit in defense of taxpayers and students. That is just wrong.

Caveat here. Not since the dark days of my college class presidency have I been a politician. I know issues can be politically untenable but that is not the same as issues being too difficult to address.

Take for example concerns about debt to income. Advocates have pushed for the Income Contingent Repayment plans to be less cumbersome to apply for and receive.

Wouldn’t doing so help students who accrue debt and are more likely to swirl? If labor market conditions are hostile to some types of students, ICR could help blunt the qualitative effects of student loan debt. That could especially important to those in the for-profit college sector. Private loans don’t participate in ICR plans. That’s a problem. But it could be slightly less of a problem given the  make-up of for-profit credentials conferred. They still dominate in lower level credentials that are less likely to run afoul of federal student loan caps than are those enrolled in graduate degree programs. Thus, these students take out fewer private loans.

But, that doesn’t address the expansion of bachelors, masters, and doctoral degrees and debt. That’s another thing I’ve been puzzled by. The public sector is still an employer, albeit a smaller and more brutal one than I would prefer. And women and minorities still benefit when the public sector sets recruitment, salary and occupational trends. Do we have any idea how the public sector views for-profit credentials? That’s the kind of intervention that is sensitive to political power but rarely discussed.

In the end, Gainful is a regulatory rule. It’s about counting and measuring and less so intervening or addressing. It can look good politically even when its construed as the Administration caving. I mean, they gave it a shot, guise! Thus, it becomes a narrative that obscures the ways that power could be enacted, possibly with more and better effects for students as opposed to business and markets.

But then we’re back to politics and, again, I’m not a politician.

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