Gainful employment: an immodest proposal

So for-profit universities have hired Lanny Davis to get some friends to become strange bedfellows fighting the federal government's draft gainful-employment rules, which would require colleges and universities that engage in vocational education/workforce training to document that the cost of the education does not completely overwhelm the likely benefit (with measures of repayment rates and job-placement). That's one of the two strategies to fight gainful-employment rules: pay someone to twist the arms of his long-term friends to repeat nonsense. The other strategy is what I think of as the "mud-in-your-eye" approach, to argue that if for-profit universities need to be overseen with gainful-employment rules, why not non-profit universities?

My response: sure. Bring it on, with a few conditions.

Fundamentally, if we're going to have gainful-employment rules across the board, let's look at listed tuition and fees and focus on higher-tuition institutions with three factors: listed tuition/fees and completion percentages. Institutions that either have high graduation rates or tuition low enough that dropouts don't leave with significant debt shouldn't be examined closely. If you have very low graduation rates and charge an arm and a leg? Then I think loan-repayment and job-placement data should be examined, regardless of the profit status of an institution. If the term "scam" properly applies to a pricy non-profit institution, then the shoe should be worn.

Let's start with reality: where could an initial cut-line on tuition go? The College Board reports that about half of college students attend places that charge $9,000 or less per year in tuition and fees, and that might be a tempting place to start. I will guess that today's median tuition/fee arrangement (median in terms of students, not institutions) is $10,000 per year. But that doesn't tell us how likely such a dividing point is likely to affect public, private nonprofit, and private for-profit colleges and universities. Let's get specific, and for the following I am using either 15 hours or a semester depending on whether the institution reports a per-semester or per-hour charge:

Hillsborough Community College (Tampa, Florida): $78.24 per credit hour, or $1,174 per 15 hours 

University of South Florida (Tampa campus): roughly $170 per credit hour, or $2,550 per 15 hours

Iowa State: $3,180

Community College of Vermont: $3,825 

Kent State: $4,515

Kaplan University B.S. program (for-profit): $371 per credit hour, or $5,565 per 15 hours

Michigan State: $5,861 

UC Berkeley: $6,231 

University of Phoenix (for-profit): $465 per credit hour,  or $6,975 per 15 hours

Penn State: $7,625 

DeVry University (for-profit): $580 per credit hour  $8,700 (tuition-only: I could not find a fee schedule)

Rensselaer Polytechnic Institute (private, non-profit): $20,340 per semester

Note: I used in-state residential tuition for all public institutions, and, yes, I deliberately picked RPI for a high-end nonprofit tuition. I think the Community College of Vermont is either the most expensive or close to the most expensive public community college in the country. So if you set the minimum cut-point for gainful-employment rules at $10K per year or $5K per semester, every public community college in the country will be exempt from gainful-employment rules for any program, at least until they raise their fees. The less-expensive public universities would also fall under the line. Florida's universities are dirt-cheap (something that, combined with budget cuts, threatens the quality of undergraduate education), but there are plenty of four-year institutions such as Iowa State and Kent State that fall under the line. The high-status flagship public universities? That's roughly where the for-profit tuitions fall, and I hope anyone who is paying tuition to Kaplan, University of Phoenix, or DeVry is getting the equivalent of a Berkeley or Penn State education. Of course, the higher-priced public flagships would fare quite well in comparison with the for-profits on both graduation rates and post-attendance employment.

And then there are the highest-cost private non-profits, but Rensselaer's 82% six-year IPEDS graduation rate is far, far above the for-profits. If you set the threshold for scrutiny for a four-year college at a 6-year graduation rate of 60% or so (and let's assume we can figure out a better measure than the current IPEDS number), then the focus of gainful-employment rules will be on higher-cost institutions that cannot get a significant majority of students to the finish line. And I think that's reasonable. 

The lesson here: if the for-profits scream unequal treatment, I say both public and non-profit institutions shouldn't be afraid one whit of equal treatment if the scrutiny is focused on high-tuition, low-graduation institutions. Disclosure: I teach at USF, and since our in-state undergraduate tuition is well below Vermont's community-college tuition and fees, gainful-employment rules applied with these filters are guaranteed to be irrelevant to USF today and for years to come.