Applying GE / Financial Transparency to a Specific Program

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Although a somewhat specialized degree, Master’s programs in Library & Information Science (MLIS) offer some interesting insight into the challenges of measuring and holding schools accountable for Gainful Employment (GE) financial metrics (aka Financial Transparency) as being put forward in the US by the Department of Education (ED). Looking at these programs through the lens of GE raises some interesting issues with the quality of the data and the extent to which it is a meaningful measure.

Fifteen years ago, a librarian sent me a link to the video below that remains one of my favorite things, and well, librarians have become a central part of my immediate family and social circle. If you have ever been to a professional convention - whether for librarians or not - this should make you chuckle.

The comments are pretty great as well.

Given my connections to librarians and the current brouhaha around the new Gainful Employment (GE) regulations coming out of the US Department of Education (ED), I naturally was interested to see what impact proposed Gainful Employment (GE) rules would have on Schools of Library and Information Science and their flagship degree, the Master’s degree in Library and Information Science.

However, my interest extends beyond personal curiosity. The field of librarianship generally requires a specialized degree * from institutions accredited by the major professional association. Costs vary significantly. While I did not do an exhaustive search, I found several programs in the $30,000 plus range (for example the University of Rhode Island at $32,000 and the University of Illinois at Urbana Champaign at $37,000) but some much higher (for example the University of Southern California at $81,000).

But salaries are not that high. Although librarian salaries vary considerably by sector & field, the Bureau of Labor Statistics pegs librarians median pay at just under $62,000 per year. One study found the median starting salary for 2019 library science graduates was $53,000. Based on personal observations, these salary levels may be somewhat high, but as I don’t have good alternate sources we’ll stick with these levels for this post.

Given this, I was expecting many MLIS programs to fail Gainful Employment financial thresholds (meaning that they would require students to sign a disclosure form).

I was wrong.

The new Gainful Employment rules

A recent article in Inside Higher Ed outlined the proposed Department of Education rules designed to punish institutions whose programs do not lead to students being able to afford student loan payments as well as making more than someone who didn’t go to college at all. Technically the Gainful Employment regulations only apply to programs at for-profit institutions as well as to non-degree programs at both for-profit and non-profit institutions, but ED’s proposed rules would also mean that all programs provide financial transparency based on the same metrics. For those programs that fail GE metrics, students would have to sign a document acknowledging they saw the information. Creating that acknowledgment form and ensuring students sign it will be the institution’s responsibility.

As Phil Hill described in a post on the topic, this ruling will have a big impact on many programs in the non-profit sector even though they are not subject to the main thrust of GE. Requirements to have students sign acknowledgements that their programs don’t fulfill GE might well have a chilling effect in a sector where enrollment is already a challenge.

The chart below shows the spread of academic programs against the GE thresholds, color-coded by the credential level. The Y axis is a measure of Debt to Earnings (also known as Excess Debt Payments), where ED calculates that students have more debt than they can handle (8% of total earnings or 20% of discretionary earnings). Up is bad, down is good, zero is dividing line. The X axis is a measure of Earnings Premium (program graduates making more than a state average of high school graduates without a postsecondary degree). Left is bad, right is good, zero is dividing line. To pass both metrics, a program would need to be in the bottom right quadrant. To avoid making prospective students sign a disclosure form that they have seen this data (too much debt), a program would need to be in the bottom two quadrants.

The First Professional Degree and master’s degrees in green and purple respectively are on slightly shaky ground with respect to GE, with big implications for those programs and access to federal financial aid.

Library science programs

Looking specifically at MLIS programs, they do pretty well in terms of GE metrics - better than I expected. All of the programs below the red line pass the Department of Education mandated threshold for debt levels and earnings premium. The size of the circle is the relative size of each program.

Take the case of program debt of $37,000 taken on by someone making $62,000. That debt amortized for 15 years at 5.82% yields a ~$309 per month debt payment. The GE threshold for debt-to-earnings would ~$4,960, leading to the program passing. That same set of earnings and debt amortized at 10 years (as the College Scorecard data shows but not as the GE rules are defined) would put a program right on the line of passing debt-to-earnings.

Broader questions about GE

Doing an analysis on a small set of programs forces one to look at the details, and this look brought to light several issues with Gainful Employment, Financial Transparency, and the data used to assess those metrics - issues that go well beyond library programs. In analyzing the data, there are three shortcomings with the College Scorecard (CS) data that will be extensively used to calculate GE.

First, the College Scorecard makes it very difficult for people (including institutional staff) to see the debt payments that debt-to-earnings is based upon. The Scorecard metric uses solely a 10-year amortization that does not apply to bachelor’s, master’s, doctoral, and first professional programs. Further, the debt payment metric does not align with the correct cohort of students who took out the debt. Using this Scorecard data on its surface results in a more extreme picture with many more programs falling outside of Gainful Employment.

We have worked to duplicate the methodology described in the Notice of Proposed Rule Making (NPRM) on the Gainful Employment regulations instead of using the provided metric. We calculate our own amortization payment schedule based on the amortization period (10, 15, 20 years) and interest rate (4.27%, 5.82%). Additionally, we use the proper debt cohort aligned to earnings.

Second, and perhaps more importantly, the analysis raises the question of how meaningful the GE requirements are in terms of reducing student debt levels. Note that most MLIS programs easily pass the GE threshold despite some high tuition levels and low starting salaries. The 15-year amortization schedule for master’s degrees makes it much easier to pass GE metrics, but does the Department of Education believe that you should spend 15 years paying off the loans for a short graduate degree? I’m confident that this is not the intent, but there is a risk of setting expectations for fairly long payoff terms.

Third, we considered adding to this analysis a look at which programs use an Online Program Management (OPM) partner, but we determined that this would not be an accurate categorization. Take the University of Denver and its 2U partnership that started in 2018. The 2015/16 cohort would not apply nor would the 2019/20 3-year earnings. That is a serious time lag.

Using the College Scorecard and the overall GE approach leaves little to no room for meaningful measurement or program improvement. In the case of the University of Denver, the earliest we’ll get any data on the OPM program is next year, and that will not have 3-year earnings - the key to the GE metrics. So the earliest we’ll get meaningful data on UD’s OPM-based MLIS is 2027, fully nine years after the program started. Then consider the intended hypothetical that UD decides to cut tuition based on its financial transparency disclosures - add at least another four years for those changes to show up, 2031 at the earliest.

If you want to improve student debt levels, you need a feedback loop that is much shorter than that.

What this means is that if the Department of Education is serious about Gainful Employment and Financial Transparency, it needs to get serious about improving the availability of good data to calculate key metrics. Universities and colleges will also need to be vigilant about what data are being used to calculate these metrics.

Parting thoughts

There is a lot to unpack and explore about the way the proposed rules about Gainful Employment are going to affect programs, particularly at non-profit institutions. The fact that so many contributed comments to the Department of Education on the proposed rules shows that many people are now following the issue. Many of those in higher education who are yet to engage with the issue should start doing so soon.

Postscript: As we described in an earlier post, we plan to share our data and set of interactive visualizations on the Gainful Employment issue with subscribers. Our plan is as follows:

• Clean up the data a bit more to make it easier to read and analyze (give us another week, or two at the most);

• Share spreadsheet-level dataset for On EdTech+ subscribers; and

• Share access to our Tableau visualizations - with the ability to look up and highlight specific academic program types (CIP codes) and specific institutions - for On EdTech Enterprise subscribers.

Watch the blog for further details or contact us for more information.

* The field is opening up, with some entering the field with a PhD or other type of qualification. But requiring the MLIS is still very common.

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