What McAllen, Tex., Tells Us About Problems in the Gainful-Employment Rule

Hispanic women enter the workforce with two strikes against them.

The first strike: They’re women, who earn an average of 82 cents for every dollar paid to men.

The second strike: They’re Latina. Hispanic women workers in the McAllen region in South Texas earn less than 40 percent of what white non-Hispanic men make. Nationally, Latinas lose an estimated $1.2 million in earnings over a 40-year working career because of these wage gaps.

The U.S. Department of Education’s latest update to the gainful-employment rule could be a third strike. A new income threshold test would require a majority of graduates of nondegree programs to be paid more than the median high school graduate in their state between the ages of 25 and 34. The change applies to all nondegree programs, including industry-aligned certificates for in-demand occupations that can be earned in less than a year. Programs that fall short on these new measures could lose access to federal financial aid.

Postsecondary accountability structures are critical to providing learners with access to effective programs. They can ensure that these programs have value and deliver a return on investment. And they protect American taxpayers, whose tax dollars flow to these institutions either as direct support or as student loans, and college graduates, who should not be saddled with debt that limits their future prospects.

But the new rule fails to account for regional and gender-based disparities in wages that institutions cannot control. U.S. Census data shows tremendous variation in earnings data by race and sex, which means that statewide medians may not accurately reflect the wages accessible to certain populations of learners with a high school education. The upshot is that certain populations of learners in regions like McAllen stand to be unfairly penalized because they will be unable to access jobs that pay wages anywhere close to the median of high school graduates statewide.

The new income threshold test could be devastating to learners in states with significant regional wage gaps, especially in regions like McAllen, at the southern tip of Texas, where wages and the cost of living are much lower than in the state’s other metropolitan areas. In the Austin area, hourly workers earn around $33 per hour. In the McAllen region, however, the average hourly wage is about $21.

McAllen’s population and workforce, meanwhile, are growing rapidly, with health care as a critical industry. Between 2012 and 2022, the McAllen-Edinburg-Mission metropolitan area experienced a 10 percent increase in population and a 23 percent increase in jobs. Data from the McAllen Economic Development Corporation projects growth over the next decade will require the health-care industry to expand by another 28.3 percent to meet our region’s health-care needs.

This need for skilled health care is driving our region to bring together industry stakeholders and educational institutions to further strengthen our workforce. This includes connecting prospective workers with career counseling, mentoring, professional development, wraparound services and skills training to enter high-demand fields such as health care, which can provide pathways to higher wages.

However, the new gainful-employment rule will punish growing regions like ours and severely limit our ability to train the health-care workforce and meet vital community needs. Data released in 2023 as part of the negotiated rule-making process showed that under the new rule, every medical assistant certificate program in the McAllen region failed the new income threshold test or did not have enough data. In Austin, where institutions offer the same programs, graduates are paid about $7 more an hour on average (roughly 60 percent more) than graduates of McAllen programs—not because of any difference in program quality or postgraduation job opportunities, but due to regional wage differences.

Because women hold 78 percent of all health-care jobs in the McAllen region and nearly 87 percent of the region’s health-care workers are Hispanic or Latino, the rule’s impact could be devastating to Latina women in particular. Latinas often rely on entry-level certificate programs to enter the health-care sector, where talent remains in short supply. These valuable credentials open the door to jobs that can provide regular hours, health insurance and stability. And because their credentials are stackable, they can go on to earn more advanced degrees that can lead to higher salaries and family-sustaining careers.

Policy should measure what matters for the individual learner. We have the tools to better measure return on investment and program value, and we should not be afraid to use them. Instead of penalizing Latinas for regional wage differences they cannot control, we should encourage them to find pathways to careers and a route out of low-wage work.