WASHINGTON, D.C. [09/13/18]—Today, U.S. Senator Tina Smith (D-Minn.)—a member of the Senate Education Committee—stood up for students in Minnesota and across the country by calling on Education Secretary Betsy DeVos to withdraw a proposal aimed at striking down a rule to protect students and borrowers from career training programs that leave students saddled with debt and poor job prospects.
Sen. Smith said students in Minnesota and across the country deserve to know which career training programs are successful, and which programs have a history of providing a low-quality education and overly-expensive degrees that have little value on the job market. Under the “gainful employment” rule, poorly performing programs should face the possibility of losing access to federal student aid if they fail to improve, she said.
“The Department’s proposal to remove the gainful employment rule will leave students in Minnesota and across the nation, at risk,” wrote Sen. Smith in her letter to Secretary DeVos. “I am concerned for the almost 13,000 students in Minnesota who have graduated from one of 73 programs identified for concerning or unmanageable debt levels relative to their earnings as of April 2018—programs that have either failed or are in the zone, under the gainful employment rule. These graduates have borrowed almost $290 million to finance their education. These expensive and poorly performing programs stand in contrast to the career training sector overall in Minnesota, which has over 28,000 students graduating from 313 programs that pass the gainful employment rule.
“The Department’s proposal would have serious consequences for students in Minnesota and around the country looking to improve their lives by investing in their education…instead, I strongly encourage the Department to guard against poor performing career and technical education programs that harm students, including those in Minnesota, by fully enforcing the existing gainful employment rule.”
Sen. Smith believes this is yet another troubling example of actions by Secretary DeVos that fail to uphold a commitment to students. In addition to today’s letter outlining how gutting the gainful employment rule would hurt Minnesota, Sen. Smith also joined 30 of her colleagues in calling on Secretary DeVos to reverse course.
You can read a copy of Sen. Smith’s letter here or below:
September 13, 2018
The Honorable Betsy DeVos
Secretary of Education
U.S. Department of Education
400 Maryland Ave, SW
Washington, D.C. 20202
Re: Docket ID ED-2018-OPE-0042
Dear Secretary DeVos:
I write in strong opposition to the Department of Education’s proposal to rescind the “gainful
employment” rule. I encourage the Department to withdraw its proposal to rescind this rule,
because with that proposal the Department would fail to adequately protect students and
borrowers from low-performing career training programs. If the Department gets rid of the
gainful employment rule, it will be abdicating its responsibility to provide guardrails for students
seeking to attend career training programs. I am concerned that this proposal runs counter to the
intent of the Higher Education Act and inappropriately prioritizes the interests of unscrupulous
colleges over students and taxpayers.
The Higher Education Act is clear on the importance of career training programs, but also
recognizes these programs’ particular objectives, which is why Congress required that such
programs offer students a path to “gainful employment in a recognized occupation.” The statute
requires eligibility standards and concrete accountability for such programs, whether they are
offered at for-profit or nonprofit colleges. The Department’s proposal to publish program
outcomes data is necessary and helpful, but insufficient for the purposes of gainful employment.
The Department’s proposal to remove the gainful employment rule will leave students in
Minnesota and across the nation, at risk. I am concerned for the almost 13,000 students in
Minnesota who have graduated from one of 73 programs identified for concerning or
unmanageable debt levels relative to their earnings as of April 2018—programs that have either
failed or are in the zone, under the gainful employment rule. These graduates have borrowed
almost $290 million to finance their education. These expensive and poorly performing
programs stand in contrast to the career training sector overall in Minnesota, which has over
28,000 students graduating from 3 13 programs that pass the gainful employment rule. Far from
constituting federal overreach—based on the number of programs identified (73) out of the total
number of programs (386)—the gainful employment rule takes a reasonable and well-targeted
approach to determining the worst performing programs or programs at risk of low-performance.
The gainful employment rule and Department data appropriately identify programs in Minnesota
that perform well and those that perform poorly. For example, an undergraduate certificate
program in massage therapy offered by Globe University had 93 graduates who had
mean annual earnings of only $18,073 and total median debt of $18,545, with a median annual
loan payment of $2,561. Sanford-Brown College offers a criminal justice bachelors degree
program that had 68 graduates who had median earnings of $29,673 and total median debt of
$36,575, with a median annual loan payment of $3,896. The gainful employment rule identified
all of these programs as failing, and rightly so.
The rule also identified gainful employment programs in Minnesota that are successful for their
graduates. According to data from the Department, Ridgewater College offers a welding
technology undergraduate certificate program that had 48 graduates who had mean annual
earnings of $40,078 and a total median debt of $6,619, with a median annual loan payments of
$914. Ridgewater College also offers an undergraduate certificate program in massage therapy
that had 51 graduates who had $18,367 in mean annual earnings and a total median debt of
$5,069, with median annual loan payments of $700. Minnesota West Community and Technical
College offers an undergraduate certificate program for licensed practical/vocational nurse
training that had 73 graduates who had median annual earnings of $40,103 and total median debt
of $5,851, with median annual loan payments of $808.
Student outcomes, like debt-to-earnings data, are vital for assessing the value of career training
programs. The explicit purpose of this type of education is for graduates to access training for a
specific career with appropriate compensation. If a career training program is too expensive
relative to the wages its graduates earn, then it has failed to prove itself a worthwhile investment
for students’ time, effort, or taxpayer-supported federal student aid.
Colleges that offer career training programs that provide graduates high levels of debt and poor
labor market outcomes should be prompted to reexamine their practices and should face the
possibility of losing access to federal student aid if they fail to improve. Without such
consequences, federal student aid will continue to flow to subpar programs and put students’
financial situations needlessly at risk. By proposing to rescind the gainful employment rule, the
Department eliminates consequences for unscrupulous career training programs and places the
burden of risk entirely on students, who might be so unlucky as to attend, invest in, and graduate
from a program that will not pay off. The decision to eliminate the gainful employment rule is
equivalent to handing a $5.3 billion check of taxpayer dollars to programs that will bring no
economic benefit to students, according to the Department’s own cost-benefit analysis.
The Department’s proposal would have serious consequences for students in Minnesota and
around the country looking to improve their lives by investing in their education. I reiterate my
strong opposition to the Department’s proposal and strongly urge the Department to abandon it.
Instead, I strongly encourage the Department to guard against poor-performing career and
technical education programs that harm students, including those in Minnesota, by fully
enforcing the existing gainful employment rule.
Sincerely,
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