Yet the stakes remain high. The first release of gainful employment data showed that more than 350,000 students graduated from the worst-performing programs with nearly $7.5 billion in unaffordable debt. Hundreds of these programs are still enrolling new students today. While only two-fifths of career education programs are at for-profit colleges, 95 percent of the worst- performing programs under the gainful employment rule are operated by for-profit colleges. Recent research confirms that many for-profit programs leave students worse off than before they enrolled at the school. One study found that the average graduate of for-profit college certificate programs experienced minimal or no earnings gains yet had sizeable debts to repay. The Rule Is Particularly Important for Women, Low-Income Students and Students of Color The Department’s proposal claims that the gainful employment rule “could significantly disadvantageinstitutions or programs that serve larger proportions of women and minority students and further reduce the educational options available to those students.” Yet such claims fly in the face of the Department’s own prior analyses and well-documented concerns about disproportionate enrollment of these groups at for-profit colleges, where costs and debt are high and outcomes poor. The Department explored the question of the gainful employment rule’s effect on educational opportunity for underrepresented students in great depth in its past rulemaking, concluding that “theregulations do not disproportionately negatively affect programs serving minorities, economically disadvantaged students, first-generation college students, women, and other underserved groups of students.” Courts upholding the rule have specifically recognized this analysis.
In fact, women, low-income students and students of color are disproportionately targeted by for-profit colleges, making concerns about poor-quality programs in that sector acutely relevant to these communities. These are the students who will benefit most when colleges are compelled to either improve the value of poor-performing programs or stop using federal student loans. Recent research has confirmed that students can and do find better educational opportunities when low-performing programs and schools are not propped up with federal funds. Analysis of the Department’s gainfulemployment data further shows that programs with high costs and poor outcomes are often located near programs serving similar students with better outcomes at lower cost. The Department’s Proposal Would Repeal Disclosure Requirements, Not Strengthen Them The Department describes its intent to strengthen accountability by publishing program-level student outcomes at all colleges and universities. Yet instead of proposing concrete disclosure requirements, theDepartment’s proposal merely raises questions about whether it should require stronger disclosures, describing vague, non-binding concepts that are impossible to evaluate. For example, the Department fails to describe what data it plans to make available, when it will publish it, how it will verify it for accuracy, or how it will ensure the data gets into the hands of students in a manner that is effective in influencing their decisions. Instead of taking specific steps to strengthen disclosure, the proposal repeals existing disclosure requirements. In its cost-benefit analysis, the agency even claims as a benefit the time saved by students who will no longer have to be informed that their program has poor outcomes. In other words, theDepartment’s proposal is little more than lip-service, touting the importance of more disclosure while simultaneously counting as a benefit to students the time savings of eliminating disclosure. Designed with career education students in mind, and informed by consumer testing, the gainful employment disclosures provide information on program costs and the extent to which programs’graduates find employment and have debt to repay. Repealing them is in direct conflict with the Department’s stated goals of informing student choice.
Ultimately, while clear and targeted disclosures are important, disclosures are no substitute for accountability. This is particularly true when students face the types of high-pressure and deceptive recruiting practices that are too frequently seen within the for-profit college industry. Repealing a strong accountability system in favor of any disclosure-only regime will put students and taxpayers at risk. The Department’s Proposal Ignores Its Own Prior Research and Distorts External Evidence The Department raises questions about the existing gainful employment rule without acknowledging the extensive public record on these topics, ignoring the reams of evidence compiled through its own years of careful analysis and study. In addition to the examples highlighted above, the agency does not acknowledge its own existing factual findings on the economic benefits of improved educational value created by the rule, the relationship between the debt-to-earnings ratios and the economic cycle, and many other topics explored by the Department in depth in 2009-11 and 2013-14. Even research that has long been central to the gainful employment policy debate is cited differently now, without explanation for the change. For example, the Department’s analysis of the centralquestion of the rule—what level of debt is affordable?—dismisses the 8 percent debt-to-earnings standard as not grounded in research, citing the work of Sandy Baum and Saul Schwartz. The Department never even acknowledges the tougher 20 percent debt-to-discretionary-earnings standard that Baum and Schwartz recommend and that is part of the existing rule, or the fact that they consider the 8 percent threshold to be too lenient. No wonder Baum calls the department’s application of her work “illogical.” She goes on to note that her research is actually in direct contradiction to theDepartment’s characterizations and that “he <2014> GE rules are, if anything, too permissive.” The Department Must Implement Existing Law While the Department may seek to rescind the gainful employment rule through the statutorily required rulemaking process, until such a rescission goes into effect it is obligated to enforce the law as it exists today. It has given no explanation for why it took more than a year to start a new collection of data to produce the next round of debt-to-earnings rates. Following a court ruling that held the rule could not be enforced as written under very narrow circumstances, the Department abandoned any standards for programs appealing their results, without soliciting any public comments or explaining that it went farbeyond the court’s instructions. It has repeatedly pushed back the timeline for required disclosureswithout any justification. These delays are illegal and must end.
We urge you to abandon this unwise and ill-developed proposal and to instead implement the law immediately. Sincerely, Allied Progress American Association of University Women (AAUW) American Federation of Labor & Congress of Industrial Organizations (AFL-CIO) American Federation of Teachers Americans for Financial Reform Education Fund Association of the United States Navy Association of Young Americans (AYA) Center for Law and Social Policy (CLASP) Center for Public Interest Law Center for Responsible Lending Children's Advocacy Institute The College Access Consortium of New York, Inc. College Advising Corps Consumer Action Consumer Advocacy and Protection Society (CAPS) Consumer Federation of California Demos East Bay Community Law Center The Education Trust EMPath Empire Justice Center Generation Progress Goddard Riverside Community Center Government Accountability Project The Harvard Project on Predatory Student Lending Higher Ed Not Debt Higher Education Loan Coalition Hildreth Institute Housing and Economic Rights Advocates The Legal Aid Society of NYC Legal Services NYC Maryland Consumer Rights Coalition Mississippi Center for Justice NAACP National Association for College Admission Counseling National Association of Consumer Advocates National Association of Consumer Bankruptcy Attorneys (NACBA)
National Center for Law and Economic Justice National Consumer Law Center (on behalf of its low-income clients) National Consumers League National Student Legal Defense Network National Urban League New America Education Policy Program New Settlement Apartments College Access Center New York Communities for Change New Yorkers for Responsible Lending NJ Citizen Action One Wisconsin Now PHENOM (Public Higher Education Network of Massachusetts) Public Citizen Public Counsel Public Good Law Center Public Law Center Service Employees International Union (SEIU) StreetSquash Student Action Student Debt Crisis Student Veterans of America The Institute for College Access and Success (TICAS) U.S. Public Interest Research Group (PIRG) UnidosUS United States Student Association University of San Diego Veterans Legal Clinic Veterans Education Success Veterans for Common Sense Vietnam Veterans of America Woodstock Institute Young Invincibles