Higher Education for All. April 18, 2014.
APSCU president and CEO Steve Gunderson sent a letter to Education Secretary Arne Duncan today on the Department’s use of discredited facts, including one deemed “bogus” by The Washington Post Fact Checker. Gunderson also addressed the Department’s flawed approach to the proposed gainful employment regulation and contradicting statements on what the Department is trying to measure with the regulation.
Gunderson wrote, “The underlying problem is that the Department is not measuring earnings gains; instead you are using an arbitrary debt-to-earnings metric that according to NCES data many private nonprofit and public bachelor’s degree programs would fail. This logic is flawed, as it creates a regulation that would eliminate programs that produce a net earnings increase for students.”
View the full letter in PDF or below.
Dear Mr. Secretary:
The purpose of my letter is to call attention to the flawed methodology your Department has been using to make the case for the proposed gainful employment regulation. The day the Department released the regulation publicly, you spoke from the White House press briefing room and made a statement that was later discredited by The Washington Post “Fact Checker” and the methodology called into question.
The analytical problems within the Department go much deeper than this one statistic. Your fundamental approach to the gainful employment regulation is flawed. I want to draw your attention to one statement from your Department’s response to The Washington Post that I find indicative of the problem:
“There likely is an earnings gain in the vast majority of the programs that we evaluated. It just may be the case that a student may be making something less than a high school dropout before they enroll in a program, and three years after they graduated they are still making something less than a high school dropout.”
Such language points to the problem with your approach on the gainful employment regulation. If the vast majority of programs give graduates an earnings gain, then shutting down those programs will deprive those students of that earnings gain.
The underlying problem is that the Department is not measuring earnings gains; instead you are using an arbitrary debt-to-earnings metric that according to NCES data many private nonprofit and public bachelor’s degree programs would fail. This logic is flawed, as it creates a regulation that would eliminate programs that produce a net earnings increase for students. Consider the following hypothetical:
As a high school graduate “Jane” is making $18,000 per year before completing a private sector program. After completing her program, she begins earning $24,000 per year.
Now, let’s assume Jane had to take out a loan to get this education and the payment for this loan is $300 a month. Before her investment in her own education, she was making $1,500 a month. Now, she is making $2,000 a month, an increase of $500 a month. Even when you subtract her student loan payment, she is still making $200 more on a monthly basis. That is $2,400 more a year in her pocket that she would not have had otherwise.
Based on your Department’s proposed regulation, a program’s cohort could fail the debt-to-earnings metric, and be shutdown, even if nearly all the graduates are like Jane. This would deprive millions of students of the opportunity to better their financial position and livelihood.
Obviously, a regulation that makes students worse off is not the outcome you are seeking, but that is what can happen with this misguided approach. For the benefit of all students, we should be comparing the lifetime earnings gain that results from education to its costs. Exclusively looking at arbitrary point-in-time earnings as proposed in the gainful employment regulation misses the real value of postsecondary education. Furthermore, this measure is agnostic to what students were earning prior to enrollment. You have established a bias against students with low incomes from the beginning and often those students are enrolled by private sector and community colleges across the country.
I disagree with that approach, and the goal of our institutions is the opposite. Our students are those who are underserved by traditional higher education and we are meeting their needs today in a way that heavily subsidized state universities and private nonprofits are not. Our students are not the highest earners among recipients of credentials, but they are better off than they were prior to pursuing an education. Stripping these students of that opportunity is the wrong thing to do and is, in fact, contrary to the stated goals of this Administration.
Thank you for your time and consideration on this matter. Private sector colleges and universities broadly support accountability that applies to everyone, while recognizing the diversity of students and institutions. President Obama has made recognizing this diversity a key element in the creation of his new rating system. We stand ready to work with you to improve access, opportunity and outcomes across all of higher education. Unfortunately, the gainful employment regulation, and the faulty data points created to support the regulation, are not the correct way to conduct public policy.
President and CEO
Association of Private Sector Colleges and Universities