David vs. Goliath
In 1986, I graduated from Penn State University. My costs to attend for four years are about the same it costs to attend there today for one year. In a little over two decades, the cost of higher education has skyrocketed; and what has occurred at Penn State is the norm. And in today’s job market, many students are unable to find employment in their chosen field – if they can find a job at all.
In an apparent effort to protect students from incurring high student debts, while at the same time not being able to pay them off, the Obama administration has enacted the Gainful Employment Rule (DOE Press Release). This rule is designed to punish institutions whose students graduate and their salary to loan-debt ratio is too high. In other words, too much of their income is going to pay back their student loan and these students are at a higher risk of defaulting on their loans.
The punishment for wayward institutions is a corresponding reduction in student loans. An institution that cannot extend student loans cannot survive. In theory it seems that the federal government is looking to protect unsuspecting students from predatory institutions; but upon closer inspection, this rule is designed for the federal government to seize control of higher education is this nation.
The major problem with this proposed rule is that it will only affect for-profit or vocational colleges. These institutions play a major role in developing young people to learn a skill and enter the workforce. These institutions fill a void left by traditional colleges and universities as they reach out to those who are not prepared for a four year school either financially, emotionally or otherwise.
Since this rule will only affect for-profit schools, its unfairness can easily be demonstrated. A criminal justice major at a vocational school will incur less than half the debt a criminal justice major will incur at a four year school; yet their earning potential in their chosen field are essentially the same – a police officer earns the same pay whether coming from a two-year program or a four-year program. Thus the distinction of whether or not you came from a vocational school (thus subject to the loan-debt ratio) or a traditional college is illogical.
Far from actually helping students, this rule will hinder their educational prospects as over time, many private institutions will be forced to close their doors as scarce funding will be funneled to public institutions to the detriment of the private institutions. With the closing of these vital private institutions, students who are not a good fit for a traditional higher education system will have their choices for college eliminated.
And the message will be sent to those schools not yet subject to this rule, do not stray from the chosen path or else.
The Gainful Employment Rule is just another example of the federal government controlling our lives. With this rule, the federal government can dictate who gets to educate our next generation. Eventually, not only will it dictate who can teach them but what can be taught.
November cannot come fast enough.
A good blog analysis of the financial impact of the Gainful Employment Rule: RegBlog