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Using Bureau of Labor Statistics earnings estimates as an alternative to actual earnings data for gainful-employment programs would seriously mislead prospective students about the value of those programs, according to a report released today by New America.
The Obama administration's gainful-employment rule was written to hold career education programs accountable for graduating students with debt they couldn't repay. It did so by tying access to Title IV federal student aid to programs' performance on a debt-to-earnings metric reflecting graduates' earnings two to three years after leaving a program.
Both for-profit colleges and the Department of Education have under Secretary Betsy DeVos proposed applying the rule to all higher ed programs using BLS earnings for workers in a given occupation and in a given region. New America's report finds that that proposal would, on average, overstate median annual earnings for career ed programs by 80 percent.
In 96 percent of programs subject to gainful employment, actual earnings were lower than median BLS median earnings, the report finds. That's because the data reflect earnings in a field regardless of credential level, what institution a student attended or how many years of experience they have in a field. And the report's authors raise concerns that BLS data have limited value for online students and that they don't always neatly reflect a particular field of study.
