Feds Say Marketplace Will Expose Bad Colleges, But States Find It’s Not So Easy

This article was originally published by Stateline, an initiative of The Pew Charitable Trusts, and was written by Sophie Quinton. 

Education Secretary Betsy DeVos plans to help students pick a college and a major by publishing more information about how much they might earn and owe after graduation. But, as experience from nearly two dozen states illustrates, the plan will be challenging to implement, and it’s unclear whether teenagers and other prospective college students will use the new information to make decisions.

The consumer information push is related to the Education Department’s decision to scrap the Obama-era gainful employment rule, which cut off funding for career-focused colleges if they saddled students with too much debt. The rule was aimed largely at for-profit colleges; the department announced in January 2017, just before President Donald Trump’s inauguration, that such schools made up 98 percent of the 800 or so schools out of compliance with the regulation.

Now, instead of regulating such institutions, the Education Department hopes a marketplace approach will help all students make informed decisions about where to enroll—possibly by requiring colleges to post earnings and debt data on their websites, and also by revamping the College Scorecard, a federal website built to help students compare colleges.

The department has announced it will add earnings data by major or program of study, and it’s possible other changes will be made as well.

DeVos has been criticized for her top deputies’ connections with for-profit colleges and her holdings in the for-profit college industry. But the decision to publish more information is far less controversial than the fight over regulating the industry. Many experts who research college outcomes cheered the Education Department’s decision to include data by major or program, because the subject students choose has a big impact on their earnings.

But adding more information doesn’t solve two fundamental challenges: how to make sure government scorecards share accurate, meaningful information, and how to make sure students use it.

Almost half of states have already published tools that break down what students typically earn after completing a particular program. Minnesota and Washington go a step further, and track which industries graduates end up working in.

In surveys, college students often rank getting a job, learning about a career and making more money as their top reasons for continuing their education. Yet it’s hard to say whether federal or state websites are reaching students who might want the data.

One study by researchers at the College Board found that after the current version of the College Scorecard was released in 2015, students at affluent public and private high schools sent more applications to colleges where graduates had high earnings. The Scorecard didn’t have much effect on students from low-income families — who are more likely to later struggle to pay off their college loans.

“They’re the least likely students to access the data—the students who need it most,” said Michael Itzkowitz, a senior fellow in higher education at Third Way, a left-of-center Washington, D.C., think tank, and a former director of the College Scorecard, which is run by the Education Department.

Itzkowitz said that while he supports publishing more information, he’s skeptical it’ll be enough to hold colleges accountable. The scrapped Obama administration rule revealed that hundreds of programs were leaving students in poverty. For-profit colleges offer the vast majority of programs that failed to meet the federal standard; students at for-profits are also more likely to default on their loans.

Collecting the Right Data

Rising tuition prices and student debt loads—Americans now collectively owe some $1.4 trillion—have led policymakers to think about how to collect and publish better information that could guide college choices.

In addition to the federal scorecard, 23 states have published tools that students and workers can search for earnings and debt information, according to the latest survey from the National Skills Coalition, a Washington, D.C.-based group that advocates for workforce training.

But most tools rely on partial data.

State websites, for example, generally match public college and university enrollment records to unemployment insurance information. The data excludes people who work for the federal government, freelancers and independent contractors, however, because those people aren’t covered by the unemployment insurance program. And the data usually excludes private for-profit and nonprofit institutions.

The federal College Scorecard, meanwhile, matches federal grant and student loan records for all colleges to Social Security wage data. But those enrollment numbers exclude students who paid for college on their own—from students from wealthy families on elite campuses to many students from low- and middle-income families who attend low-cost community colleges.

The University of Texas System may have the most complete data in the country, thanks to a partnership with the U.S. Census Bureau. It includes earnings data for alumni nationwide regardless of whether they relied on financial aid.

The tool shows higher earnings for graduates of the flagship University of Texas at Austin than the College Scorecard does, said Stephanie Huie, vice chancellor of strategic initiatives for the system. “People who start out from well-off families have connections, and they tend to be getting better-paying jobs,” she said. Sixty-four percent of UT-Austin students receive financial aid, below the national average—86 percent—for four-year institutions.

Adding data by major to the College Scorecard—as DeVos plans to do—will be a gargantuan task involving more than 50,000 degree programs, Itzkowitz said. “This would require new data calculations that have never been done before, and definitely more capacity within the department itself.”

The Education Department has no plans at this time to hire any additional personnel, according to its press secretary, Liz Hill.

The challenge is heightened because the Education Department cannot collect data on individual students, other than financial aid data. Companion bills that would allow the department to collect more information were proposed in Congress last year by Utah U.S. Sen. Orrin Hatch and Michigan U.S. Rep. Paul Mitchell, both Republicans, but they haven’t gone anywhere.

Nuance in the Numbers

The data that makes it into government scorecards also tells a complicated story. Higher education associations have concerns about exactly which details make it into these scorecards and how the information is communicated.

“I think we really need to look at what is causal, and what isn’t,” said Sarah Flanagan, vice president for government relations and policy development at the National Association of Independent Colleges and Universities, which advocates for private, nonprofit colleges.

For instance, some colleges selectively admit high-achievers—often from wealthy families—who are more likely to go on to earn big bucks. Urban colleges can connect students to higher-wage jobs. Some students included in outcomes data may not have graduated, which could deflate their earnings or debt loads. Others may have gone to graduate school, which could inflate their earnings or debt loads.

Flanagan said that overall, her organization supports the College Scorecard and other efforts to share consumer information with students, but that students also need to consider the best fit for them—where they’d be most comfortable and least likely to drop out.

Allowing users to compare programs is crucial, said Alessia Leibert, a project manager at Minnesota’s Department of Employment and Economic Development. “Families already think a lot about schools—in terms of prestige, in terms of being close to home. But they don’t think a lot about career choice, in terms of major.”

For example, she said, some short-term information technology credentials in Minnesota have as big an earnings payoff as an associate degree. Many history majors go on to become teachers, so budding history majors might want to consider their interest in that career.

But even if data is broken down by major and program, it still needs to be compared by location, said Tod Massa, policy analytics director at the State Council of Higher Education for Virginia. “If we could put that into the context of what it costs to live, then we’ve got something powerful.” His team is working on adding city- and county-level cost-of-living data to Virginia’s college outcomes tool, and aims to add local income data soon.

Sharing Information With Students

The websites also need to reach students and their families to be useful. State officials say it’s not enough to put the data online and hope students find it. “There’s a lot of outreach needed,” Minnesota’s Leibert said.

Since 2014, she said, six analysts for Minnesota’s employment agency have been regularly holding presentations about the tool at high schools, college campuses, workforce centers and career counselors’ professional conferences.

It’s difficult to reach everyone, however. Leibert recently gave a presentation to college officials at a University of Minnesota campus who had never heard of the website, she said. “They were impressed with the tool once they learned about it.”

Earnings and debt information may not make or break someone’s college choice since all kinds of factors are involved in such a big life decision. “These data are just one small piece of the decision-making,” said Michelle Van Noy, associate director of the Education and Employment Research Center at the School of Management and Labor Relations at Rutgers University.

Van Noy is interviewing undergraduates for a research project on career decision-making. “They’re thinking about what they enjoy doing, what they’re good at, what fits into their lifestyle,” she said of the students. “They’re certainly also concerned about earnings.”

Students who review earnings data are unlikely to change their major, according to a recently released report by Van Noy and her colleague Alex Ruder. Though students do change their expectations for how much money they’re likely to earn after graduation.

Some students with low test scores and poor high school grades don’t have much of a choice, particularly if they don’t have the money or inclination to move elsewhere to go to college.

Just 4 percent of Virginia students who can’t get into a selective institution have “a true, information-based choice between at least two programs within 25 miles of their home,” according to a 2016 study by the Urban Institute, a nonpartisan think tank based in Washington.