by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Jenna Robinson’s latest Martin Center column explores the potential impact of increased transparency on college student debt.
The Department of Education is poised to replace Obama-era regulations on for-profit colleges and universities with more broad-based transparency measures. On August 10, Education Secretary Betsy DeVos revealed her plan to fully repeal the “gainful employment” regulations that required for-profit colleges to publish information on their graduates’ student debt levels and post-graduation earnings. Under the regulation, schools who failed to meet government standards for their average debt-to-earnings ratio lost federal funding.
In place of the gainful employment rule, DeVos proposed a new rule that would require all schools to publish data on student outcomes. The data—such as debt levels, expected earnings after graduation, completion rates, program costs, accreditation, and consistency with licensure requirements—would then be published on the College Scorecard website.
This level of transparency could help students make better decisions about their college education. But it is not clear that students will change their behavior with the new information, as some state transparency efforts have shown.
Unlike the gainful employment rule it will replace, DeVos’ new regulations have no enforcement mechanism. Reported student outcomes will have no effect on federal funding of higher education unless Congress or the Department of Education add to the rule in the future. It’s unclear whether they will do so.