The University of Texas is one of the nation’s top public universities, renowned for its rigorous academic standards, the caliber of its teaching staff, and world-class quality of its research programs. Alumni include bold-faced names in nearly every business sector and corner of public service, as well as 28 Rhodes Scholars, 26 Truman Scholars, 20 Marshall Scholars, 18 Pulitzer Prize-winners, and even nine astronauts. Its graduates enter the workforce with all the stature and advantage that derives from attending a “public ivy” (league) university.

A recent study, entitled “Are Graduates from Public Universities Gainfully Employed?”, found that as many as 54 percent of the degree programs at this prestigious institution – as well as many others across the higher education spectrum – would fail the current Gainful Employment metrics proposed by the Department of Education. Does this mean that the University of Texas’ programs are of low quality? Should we shut down its access to federal student aid funding? Of course not. That is why the proposed metrics for the Department of Education’s Gainful Employment regulations are so badly flawed.

The study, conducted by Mark Schneider, the former Commissioner at the National Center for Education Statistics and now a visiting scholar at the American Enterprise Institute and Vice President at the American Institutes for Research, showed that more than one-third (or up to 54% if you look solely at the student borrower population) of the University of Texas’ programs would not pass the GE Rule. That’s because, under the current draft of the Rule, impacted programs must comply with a debt-to-earnings ratio of no more than 8% for graduates receiving federal Title IV funds – even though the national average for degree programs is closer today to 13%. When the Texas study researchers examined other institutions in that state, they found that more than one-quarter of Texas bachelor’s programs would be at risk if they were beholden to this particular GE Rule test. It’s alarming – and is not grounded in the realities and practicalities of today’s higher education environment.

Student borrowing at the taxpayer-subsidized University of Texas is substantially below the national average. As APC member Monroe College noted in its submitted comments to the Department during the GE Rule’s public review period,

“If close to 30% of the programs at this public system would not meet the debt-to-earnings ratios in the proposed GE Rule, it is likely that a much higher percentage of programs at more expensive public and not-for profit colleges could not meet the Rule’s requirements. We therefore find no support for the assumption that programs that do not pass the Rule are of low quality and should be prohibited from receiving federal funding. Instead, this publicly available debt-to- earnings data demonstrates the Department’s chosen thresholds are too low and arbitrary.”

MonroeGEGraphIndeed, the data coming out of Mr. Schneider’s study is compelling because it challenges the policy basis for pursuing for-profit degree programs so aggressively, while requiring nothing from similar- or worse-performing programs at public or non-profit institutions. These findings also support APC’s position that there is a significant disconnect between what the Department of Education said it wanted to accomplish with the GE Rule, and what the proposed metrics in place to do so would actually measure or achieve. The Department has not chosen to pursue an approach that focuses on traditional values for determining if an educational program adequately prepares students, such as increases in graduates’ income and graduation and job placement rates.  As a result, far too many quality programs will unfairly pay the price for these misguided metrics.

To be clear, APC fully understands the Department’s goal to rein in the proverbial bad actors in higher education — where the Department can establish a record that institutions provide a sub-par education that leads to high levels of debt but insufficient job prospects.  We disagree, however, that such outcomes can only be found on the campuses of some proprietary colleges. A look at the graduation and job placement rates of many taxpayer-supported community colleges across the country tell a stark and sobering tale on that note, which we’ll address in a future blog post here.