Last Friday, U.S. Secretary of Education Betsy DeVos announced she was killing off gainful employment rules governing for-profit colleges. These Obama Administration era regulations deny federal student financial aid to individuals attending institutions considered not having enough attendees “gainfully employed” after attending school.
On the face of it, this seems like reasonable regulation. Let’s direct federal aid to institutions where there are positive vocational outcomes for most students. However, the devil is in the details, and I believe DeVos made the right decision, for two reasons.
First, the Federal Reserve Bank of New York says that, as of March 2019, 41.3% of recent college graduates are “underemployed,” meaning they are working in jobs that are relatively low-skilled and filled usually by those with lesser education, such as high school graduates. The underemployment rate of all college graduates is also a very high 34.1%. Some of these folks are making a pretty good income (as some relatively lowly educated persons get good paying jobs), but most are not.
The supposition that college has or should have a primary purpose of preparing persons for jobs is debatable, and beyond that there are respected economists (e.g, Bryan Caplan at George Mason University) who have argued exhaustively that little of the higher typical earnings of college graduates is actually attributable to employable skills gained while in college. College degrees are screening devices enabling employers to identify the… (continue reading)