Anti-Student Gainful Employment Regulation To Displace 7.5 Million Students

Washington, D.C., May 27, 2014 - At the conclusion of the U.S. Department of Education’s public comment period on the proposed gainful employment regulation, the Association of Private Sector Colleges and Universities (APSCU) submitted comments to the Department detailing the regulation’s serious flaws, which include the following:

• The regulation’s severe impact on new traditional student access and opportunity. 7.5 million students could lose access to higher education by 2024 under the proposed regulation;
• The Department’s departure from its previous position that the gainful employment metrics were “designed to work together.” In 2012, the Department wrote they have “no magic mirror through which it can identify programs that are not preparing their students for gainful employment” and stated they “found no perfect single test” for gainful employment;
• The Department’s reliance on discredited sources, casting doubt on its impartiality and motivation. Among other things, the regulation cites to an error riddled GAO report that had to be reissued; a biased and partisan report of the majority staff of the HELP committee; and misleading statistical “evidence” that was called bogus by independent fact checkers.

In addition to APSCU’s comments, an expert analysis on the gainful employment regulation was prepared by Northwestern University education and labor economist Dr. Jonathan Guryan and Dr. Matthew Thompson of Charles River Associates. Among their findings, the economists found that the Department built the foundation for the regulation on a flawed analysis by:

• Incorrectly calculating the impact of the regulation on students;
• Using two highly negatively correlated metrics to define the same term: “gainful employment”;
• Ignoring student demographics and life circumstances;
• Measuring earnings levels in the short term, instead of measuring lifetime earnings gains.

The full Guryan/Thompson paper, as well as a summary of the analysis, is available online.

“During the regulatory process we witnessed the Department willfully mislead the public and policymakers by creating fake statistics, inaccurately representing the full impact of the regulation, and failing completely to address the loss of access to postsecondary education for 7.5 million students,” said Steve Gunderson, president and CEO of APSCU. “The Department, their allies, and proxies have misrepresented student outcomes, and the proposed regulation will harm both students who stand to benefit the most from postsecondary education with a career focus and employers seeking job-ready employees.”

“The Department has clearly forgotten the central purpose of the Higher Education Act – which is to assist in making available the benefits of postsecondary education to all eligible students,” Gunderson added.

The regulation unfairly targets students attending private sector institutions. While the Department purports to protect students, the regulation eliminates access for 7.5 million students over the next ten years, while doing nothing to protect students at public and private nonprofit institutions who have been identified by the Department’s own data as having unaffordable debt based on the gainful employment metrics. The regulation will disproportionately affect specific student populations, including:

• 5 million Pell Eligible students
• 4.75 million Female students
• 1.63 million African American students
• 1.4 million Hispanic students
• 530,000 Veteran students

The regulation is flawed, arbitrary, and biased. The Department does not have the authority to regulate student outcomes in this manner. The Department fails to analyze adequately the regulation’s impact on underserved students and in-demand programs. The regulation is backwards looking and does not evaluate all programs at all institutions. The regulation uses a one-size-fits-all approach, instead of taking into consideration the level of academic preparation and the socio-demographic characteristics of entering students.