New data released by the Department of Education (ED) on Thursday shows that graduates of career training programs at public institutions tend to fare better in the workforce than graduates of for-profit career training programs.
Overall, the data shows that on average, graduates of public certificate programs earn about $9,000 more than graduates of for-profit certificate programs. Within the same field of study, graduates of public-sector programs earn about $2,700 more than graduates from the for-profit sector – a difference of about 13 percent, ED said.
Graduates of certificate programs at public institutions were also more likely to have attended programs focusing on more lucrative fields (such as nursing). ED also found that the median earnings of nearly one-third of graduates of certificate programs at for-profit institutions are less than the yearly income of someone working full-time in a minimum wage job ($14,500).
“For far too long, some career colleges have made dubious promises about the employment prospects of their graduates, promising high salaries that rarely live up to the hype. Americans who are working hard to get the knowledge and skills they need to succeed in the growing economy deserve better, accurate information,” said Under Secretary of Education Ted Mitchell, in a statement. “The earnings data released today shine a light on how graduates are actually faring when they enter the job market, and will ensure students don't make decisions based on too-good-to-be-true promises.”
As a result of the federal gainful employment regulations, non-degree granting programs at for-profit and nonprofit universities must submit data on certain student outcomes to show that their graduates are prepared to enter the workforce. The data released Thursday was part of ED’s data collection for gainful employment, in order to calculate debt-to-earnings rates. Under the regulation, the estimated annual loan payment for a typical graduate from the program cannot exceed 20 percent of the graduate’s discretionary income, or 8 percent of total earnings. Programs that consistently fail those metrics will be stripped of their Title IV eligibility.
The regulations – which went into effect July 1, 2015 – were highly contested by many in the for-profit sector, some of whom said it unfairly targeted for-profit institutions.
Steve Gunderson, president and CEO of Career Education Colleges and Universities (formerly the Association of Private Sector Colleges and Universities, or APSCU), said in a statement that ED had used “faulty data that lacks context,” and disputed the findings, saying two graduates from similar programs could have different earnings depending on where they live.
“It is absolutely absurd to compare totally different fields of study and suggest that programs traditionally taught in public institutions have higher incomes than programs taught in proprietary colleges,” Gunderson said. “This reflects the continuing ideological bias of this Department against our sector and is yet another example of why Americans are tired of out-of-touch bureaucrats in Washington.”
ED plans to release debt-to-earnings metrics in January, and will begin calculating earnings data for these programs in order to add the data to the College Scorecard.
Publication Date: 11/18/2016