- On EdTech Newsletter
- Posts
- First View Academic Programs and Gainful Employment Ratios
First View Academic Programs and Gainful Employment Ratios
Using IPEDS / College Scorecard data to visualize how GE rules would theoretically impact different program types
Phil Hill
May 19, 2023
Was this forwarded to you by a friend? Sign up, and get your own copy of the news that mattered sent to your inbox every week. Sign up for the On EdTech newsletter. Interested in additional analysis? It’s free through May 24, 2023. Upgrade to the On EdTech+ newsletter.
With the possible exception of the planned University of Phoenix sale to the University of Idaho, the biggest education news this week was the reintroduction of Gainful Employment proposed rules. Inside Higher Ed described the rough outline of the proposal.
Under the new gainful-employment rule, a program would have to pass two tests: a debt-to-earnings ratio and an earnings threshold. They’ll be assessed separately on the metrics.
Programs would fail the debt-to-earnings ratio if the median annual payments of graduates are more than 20 percent of their discretionary income or 8 percent of their annual income. Programs that fail either or both metrics in a single year would be required to provide warnings to students, according to a department fact sheet. Those that fail the same metric in two out of three consecutive years could lose access to federal student aid.
This situation applies only to non-degree certificate programs at any Title-IV participating school and to degree programs at for-profit schools. And that is one of the main debates right now - whether it is fair or good policy to exclude nonprofit degree programs.
The real debate is whether to apply new Gainful Employment rules at all, as there is no chance at all that the Department of Education (ED) would consider including nonprofit degree programs in the current Administration.
As a thought experiment to gain some perspective, I have entered all of the College Scorecard data into a visualization of median annual debt payments vs. median annual earnings four years after completion. On top of this I drew a line showing the second of the two metrics that would apply in most cases (debt payments less than 20% of discretionary income defined as above 150% of the federal poverty level). This is not a perfect measure, as it is not clear the specific calculations and data fields to be used by ED, but it is a rough approximation.
The first chart shows all Bachelor’s Degree programs with valid data in the most recent College Scorecard updates, broken down by control - For-profit institutions on the left, private nonprofits in the middle, publics on the right. The size of the dots represent the rough size of the program enrollments.
The second chart shows the same but for Master’s Degree programs.
You’ll notice that A LOT of degree programs would fail Gainful Employment proposed rules if they applied to all programs, including at nonprofits. And this is especially true for Master’s Degree programs.
This is an initial view - before I share publicly to non-premium subscribers and blog readers, what questions do you have, corrections to suggest, and alternative views would you like to see?
I have other breakdowns per institution, per specific program (e.g. the infamous MSW example), etc.