APSCU Press Release: The U.S. Department of Education’s “F” in Negotiated Rulemaking

Bad Public Policy Will Displace Millions of Students Over the Next Decade; Inhibit Employer Needs for Job Ready Workforce
Washington, D.C., December 13, 2013

Today, the U.S. Department of Education failed to achieve consensus on its misguided regulatory effort aimed at measuring quality through a graduate's near-term earnings.

The lack of consensus is not surprising considering the Department's failures during the regulatory process:

1. Failed to evaluate the impact on students
While claiming to be focused on student outcomes, the Department has made it impossible to discuss the proposed regulation’s impact on students. Based on analysis of earlier versions of the regulation, hundreds of thousands of students in thousands of programs will lose access in the early years of the regulation, and by the end of the decade millions of students will be denied access to career programs of their choice.

2. Failed to analyze the actual impact of the regulation
The Department’s current regulation uses two metrics to evaluate programs. Both metrics require multiple years of data, yet the Department provided only a one year snapshot of data. By not fully analyzing the regulation, the Department has made it impossible to accurately analyze or discuss the regulation.

3. Failed to explain their arbitrary nature
With no explanation, the Department has gone from a single metric, to three metrics, to two metrics, thus proving that they are blindly groping for something to publish in the Federal Register without clear direction or purpose. This supports the view of many in the higher education community that this matter should be left to Congress. 

4. Failed to apply the regulation evenly and fairly across all of higher education
At a time when we should be discussing improving outcomes across all of higher education, the Department proposed a regulation that arbitrarily uses two metrics to determine program quality at a subset of institutions. If applied to all of postsecondary education, many institutions would be unable to meet the arbitrary debt-to-earnings ratio of 8 percent.

For example, programs offering a bachelor’s degree in education from the University of Michigan, a law degree from George Washington University Law School, or a bachelor’s degree in social work from Virginia Commonwealth University would all fail the Department’s debt-to-earnings metric.

5. Failed to heed the advice of others
Multiple leaders in postsecondary education have said that using earnings to determine program value is misguided. Comments include:

Nicholas Dirks, chancellor, University of California, Berkeley said schools should not be rated based on the earnings of their graduates.

Catharine B. Hill, president, Vassar College noted that a ratings system based on earnings ignores the fact that earnings often increase over time.

Drew Faust, president, Harvard University said looking at the salary a college graduate earns in his or her first job as a proxy for the value of a college education is a huge mistake.

During the negotiated rulemaking sessions, a number of negotiators expressed the view that colleges and universities cannot control the economy, the availability of jobs, where students choose to live and work or individual choices about borrowing.

6. Failed to follow their own research
An October 2013 National Center for Education Statistics (NCES) report found that 26 percent of bachelor’s degree recipients at public four-year institutions, who were repaying their loans, faced monthly loan payments greater than 12 percent of their monthly income. At private non-profit institutions, 39 percent exceeded the 12 percent debt-to-earnings threshold and 35 percent at private sector institutions exceeded the threshold. Yet the Department has proposed an 8 percent debt-to-earnings metrics threshold as the government standard for affordable debt.

7. Failed to have a representative negotiating committee of the very students and institutions impacted
 Of the 28 representatives the Department selected for the negotiating committee, only four represented private sector colleges and universities. Several of the committee members were on-the-record opponents of the existence of private sector institutions.

Steve Gunderson, president and CEO of the Association of Private Sector Colleges and Universities released the following statement on the negotiated rulemaking session, “the cumulative actions of the Department will result in denying access to hundreds of thousands of students immediately and millions of students by the end of the decade. We hope that Secretary Duncan will see the error of the Department’s ways and stop this process before it becomes an economic nightmare for students and employers seeking skilled workers.”