By Joelle Fredman, Communications Staff
The federal government created the gainful employment (GE) regulations to help protect students from investing in expensive, proprietary institutions that left them buried in debt and unprepared to enter the job market. Unfortunately, in doing so it also created obstacles for community colleges offering vocational programs, according to a new report from the American Enterprise Institute.
The report, “The Path Less Taken: Barriers to Providing Career and Technical Education at Community Colleges,” found that while the law was designed to ensure that for-profit programs improve their graduates’ debt-to-earnings ratios, it may negatively impact students earning certificates at community colleges because GE regulations require these programs to exhaust resources collecting data and may inspire them to limit program size to avoid reporting requirements.
“GE imposes a number of burdensome reporting requirements on community college certificate programs that soak up considerable administrative time and do not accurately reflect actual program outcomes since only students who participate in Title IV (federal student aid programs) are included in official measures,” Diane Auer Jones, senior fellow in the Center on Labor, Human Service, and Population at the Urban Institute and author of the report, wrote.
GE regulations also require that these institutions record and report job-placement rates, which is difficult because the conditions for what qualifies as employment are not specifically defined, according to Jones.
Jones argued that in order to avoid reporting requirements, community colleges may try to keep vocational programs small so they do not qualify under Title IV participation, which would mean students couldn't use federal loans to help defray the cost of tuition.
The regulation may also dissuade an institution from offering certificates aimed at building a student’s skills and readiness for the job market, but do not directly lead the student to qualify for a specific job, according to Jones.
“On one hand, the GE rule encourages institutions to eliminate low-value programs, thus saving students from unwise investments. On the other hand, it can discourage institutions from offering certificate programs that may help individuals build skills and improve their employability,” Jones wrote.
Jones suggested that all schools should be held responsible to the terms of GE regulations and that the Department of Education should more clearly define the term ‘job-placement’ so that comparisons can be made between schools. She also argues that federal data sources be utilized to collect numbers on debt-to-earnings ratios so that institutions do not have to rely on employees to gather data or graduates to report it.
“Federal regulations that expressly target or disproportionately affect vocational education programs may make community colleges more reticent to offer them,” Jones wrote. “While consumer protection is certainly important, the unintended consequences of some regulations can make the cure worse than the disease.”
Publication Date: 11/17/2017