Visualizing If Gainful Employment Applied to Most Degree Programs

Using College Scorecard data to show how degree programs at most institutions would fare

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With the release of the proposed Gainful Employment rules by the US Department of Education (ED), there has been quite a bit of discussion online about whether the exclusion of nonprofit degree programs is fair, based on legal precedent, and wise policy. This post will share some visualizations based on College Scorecard data based on the rules. Given the topic, I’m putting a lot of the content above the paywall of this premium post.

Note to premium subscribers:

  • I have revised the data since Friday’s newsletter based on reader feedback and further research, particularly with 15-year amortization and 3-year instead of 4-year earnings metric - see new visualizations below.

  • I apologize for the newsletter mistake where I said that the University of Iowa was acquiring the University of Phoenix. I meant to say the University of Idaho.

Synopsis of Rules and Debate

Inside Higher Ed covered the basics of the proposed Gainful Employment rules:

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. The real debate, however, 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.

More Than A Thought Experiment

Initially as a thought experiment to gain some perspective, I 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.

Some data notes:

  • Data are from the Most Recent Data by Field of Study download;

  • While the 3-year earnings metric is straightforward, I am not sure if ED is using different data for the debt payments than is available in the College Scorecard, which only lists 10-year amortization of debt - for bachelor’s and master’s programs ED uses a 15-year amortization (NPRM pp 638-639), so I have adjusted the debt payment metric accordingly, but treat the following as an estimate;

  • Only ~15% of programs listed have valid data for debt and earnings, largely due to the suppression of data for privacy reasons when there are too few students to keep information anonymous; and

  • For the Gainful Employment threshold, the line will have a different slope for earnings below $31,225 than above due to the 8% of earnings / 20% of discretionary earnings metrics.

Why do I say “more than a thought experiment”? Because there are two parts to the proposed rules, and while the Gainful Employment ratios and debt thresholds do not apply to all programs, there are plans to collect and publicize most program data, as described in ED’s fact sheet [emphasis added].

The proposed rule also includes provisions that would create a new disclosure website hosted by the Department to provide students and families with better information about the financial value of undergraduate and graduate programs across all sectors of higher education. This would include new information on program costs (including tuition and fees, books, and supplies), non-Federal grant aid, loan burden (including both private and Federal loans), earnings of completers, any applicable occupational and licensing requirements, and licensure success exam passage rates (where relevant). This reporting will, for the first time, allow the Department to give students and families a personalized estimate of what they’ll pay out-ofpocket to earn credentials in specific postsecondary programs, along with key information on the debt and earnings outcomes of program graduates.

Bachelor’s Degree Programs

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 blue line shows my estimate of the Gainful Employment threshold, with programs above and to the left of the blue line failing the debt / earnings metrics (although this only applies to the left for-profit chart).

To give a sense of how to read the data, this image shows a highlight of Columbia University’s Bachelor’s of Computer Science program, with median annual earnings of $135,658, annual debt payment estimate of $1,863, and (theoretically) allowable GE debt payment threshold of $23,385.

As seen above, there appears to be a greater percentage of for-profit programs that would fail than theoretically would nonprofit private or public programs. But, there are plenty that would fail in all three cases.

Master’s Degree Programs

Now let’s look at master’s degree programs, with much wider range of values (partially or largely due to unlimited nature of Grad PLUS loans and fewer restrictions on public institution tuition rates.

Additional Examples

Let’s look at a few more examples of individual programs, first with the infamous USC Master’s of Social Work.

This is a program that would fail the GE ratios, but then again, so do many private nonprofit Master’s programs - it is not the worst offender.

Consistently some of the best programs in terms of debt to earnings ratios are nursing programs, including in the for-profit sector as seen by Chamberlain’s Master’s of Registered Nursing and Nursing Admin program.

Another program of interest is Georgia Tech’s Master’s of Computer Science program, the one that started with Udacity as a MOOC-based program.

And finally, what if we mapped out all Master’s programs at the University of Southern California, which we have explored in recent Online Program Management (OPM) related posts.

Well, my therapist is calling me, so I better leave this alone for now.

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