Count Dr. Charlie Eaton among the skeptics.
A sociologist who studies inequality, the assistant professor at University of California – Merced recently presented a research paper at The National Bureau of Economic Research in Cambridge, Mass., about how high-profit incentives at some for-profit post-secondary schools result in fraudulent recruiting activity, low student graduation rates and comparatively low earnings for those who do graduate.
On Friday, two weeks later, U.S. Secretary of Education Betsy DeVos announced the Trump administration’s plan to rescind Obama-era Gainful Employment regulations that were put in place to police for-profit and other schools receiving federal title IV funding. It’s a policy change that Eaton and others in higher education contend will leave most vulnerable the students most likely to enroll in for-profit institutions – low-income and minority students, particularly African-Americans.
“This gives a get-out-of-jail free card to for-profit colleges to enroll students with heavy loan debt without providing much educational or career benefit,” said Eaton, who also is an affiliated faculty member in the Center for Studies in Higher Education at UC–Berkeley.
The Gainful Employment regulations that the Obama administration put into effect in 2014 established program–level title IV eligibility criteria based on debt-to-earnings ratios among graduates of title IV-participating post-secondary programs. The criteria included publicly disclosing to prospective students information such as academic program cost, completion rate and job-placement rate.
Programs that consistently failed to meet debt-to-earnings guidelines would lose title IV funding. This happened at significantly higher rates to graduates of for-profit schools and some minority serving institutions (MSIs), fueling what has become an epic student loan default crisis.
MSIs and smaller schools that struggle with compliance could benefit from the policy change, said Dr. Marybeth Gasman director of the Penn Center for Minority Serving Institutions (CMSI) at the University of Pennsylvania.
