Multiple researchers and a non-profit organization say that the research cited in an Education Department proposal for eliminating an Obama-era rule to protect students from predatory for-profit colleges is misrepresented to incorrectly justify those plans.
The Trump administration has been working to dismantle the gainful employment rule for months and, in July, delayed the rule to hold colleges and universities accountable when their programs’ graduates had debt over a certain share of their income. The rule would have held numerous for-profit colleges accountable, since they often leave students with a great deal of debt, and with lower incomes than they expected.
The department released its proposal for scrapping the rule earlier this summer, and public comments closed on the issue on Thursday. Ben Miller, senior director for post-secondary education at American Progress, said the proposal was unusually short, at 88 pages, compared to a typical proposal for a rule such as this, which might ordinarily run 300 to 500 pages long.
Sandy Baum, nonresident fellow at the Urban Institute, wrote a blog post in August on the research organization’s website arguing that the department misrepresented her research and “cites my work as evidence that the GE standard is based on an inappropriate metric, but the paper cited in fact presents evidence that would support making the GE rules stronger.”
Baum further argues that in the 2008 paper she co-authored on student debt, she called for better standards to figure out how much students could afford to spend on repaying loans. Although the student debt community looked to the mortgage industry standard of 8 percent of someone’s income, Baum said it should be linked to borrower incomes specifically. Baum said the rule as it stands now is “if anything, too permissive,” and that it didn’t make any sense to use this research to justify rescinding the rules. She wrote:
We concluded that no borrower could reasonably afford to spend more than 18–20 percent of their income on student loans and proposed 20 percent of discretionary income (income exceeding 150 percent of the poverty level) as a standard on which to base an income-based loan repayment plan. (This became the standard for GE.)
ThinkProgress also spoke to Nicholas Hillman, an associate professor at University of Wisconsin-Madison, whose research was also cited in the proposal, and said the department misinterpreted his findings. The department referred to his 2016 research, “Education Deserts: The Continued Significance of ‘Place’ in the Twenty-First Century,” which he co-authored with Taylor Weichman of the same university.
This section of the proposal reads, “The average first-time undergraduate student attending a two-year public institution enrolls at an institution within eight miles of his or her home. The distance increases to 18 miles for the average first-time undergraduate student enrolling at a four-year public institution. Accordingly, we believe that while it is important for a student to know that a program could result in higher debt, it is not appropriate to eliminate the option simply because a lower-cost program exists, albeit outside of the student’s reasonable travel distance.”
Hillman said, “They are correct in saying students stay close to home for college and I think that point is extremely important and I’m glad they’re looking at that.”
He added, “But they say it’s not appropriate to eliminate basically a failing program simply because there is a lower cost option? That is a misinterpretation of my research findings. They later say that students should be able to select more expensive programs because of the convenience. That is also inconsistent with my research.”
Hillman said that, on average, the upward mobility for public institutions consistently outperforms for-profit colleges.
“Having an expensive [college] that delivers poor outcomes as your only option … these are people who need gainful employment the worst,” Hillman said. “The corollary would be if I only had one restaurant in town and I want to go out to dinner, but that restaurant consistently makes their patrons sick. I could be well-informed about that restaurant all day long, but eventually the regulators need to come in and clean that up. The regulators need to make sure that the place is healthy. You know, if my only option is, say, a for-profit that has abysmal outcomes and charges more in tuition, this is exactly what gainful employment is designed to protect me against.”
Matthew Chingos, director of the Urban Institute’s education policy program, co-wrote a 2015 report with Grover J. Whitehurst titled, “Deconstructing and Reconstructing the College Scorecard,” which was also cited in the proposal. Chingos said it was probably fine for the department to use it as a citation because it stated how many factors affect earnings. But he added that the proposal misses key information on how the higher education “marketplace” really works.
Chingos wrote in The New York Times in August that the Trump administration’s decision to replace gainful employment regulations with new data on the College Scorecard website doesn’t ultimately make sense because, as Chingos writes, “… the market for higher education is different from traditional markets in ways that mean merely providing more information, while helpful, is not enough.”
“Having an expensive [college] that delivers poor outcomes as your only option … these are people who need gainful employment the worst.”
“If you’re a kid coming straight out of high school with great SAT scores, you probably can go to any college in Virginia. So, knowing that the economic majors at Virginia Tech make more than economics majors at UVA is useful information to you. You can use that,” Chingos told ThinkProgress.
“But most people aren’t considering a statewide college search. Most people are either going to their local community college or wherever is nearby, or they’re an older adult returning to college or going for the first time. They’re not moving with their family to a dorm. They’re looking locally. For those people, higher education is not a market in the traditional sense,” Chingos added.
Last week, the National Student Legal Defense Network submitted a petition under the Information Quality Act to the Education Department, requesting a correction of the proposal. The petition said the administration hasn’t done enough to support the claims it makes in its proposal. The NSLD has mentioned Sandy Baum’s post challenging the use of her work in the proposal and said the proposal “contains numerous factual claims that are unsupported by sources, do not stand for the proposition cited, or otherwise fail to explain the methodology used.”