The Education Dept. Wants to Hold Colleges Accountable by Reporting Graduates’ Earnings. One Problem: The Data Aren’t All There.

The U.S. Department of Education has proposed new rules requiring all colleges to report the earnings of their graduates for each academic program or major.

But the data are not yet available for many colleges and programs, and may not be ready for some time after the department’s proposal takes effect. Even when the earnings figures are available, they may not accurately represent the salaries of graduates of certain programs and institutions, said several higher-education experts, unless Congress takes action.

The proposed changes are part of the department’s effort to eliminate the “gainful-employment rule,” which was supposed to go into effect last year. That rule would have measured the earnings only of graduates of career-oriented colleges against their student-loan debt. Institutions whose graduates earned too little over several years risked losing access to federal financial aid.

The rule was created under a section of the federal Higher Education Act that requires job-training programs to ensure that students can earn a living after completing their programs, said David A. Bergeron, a senior fellow at the Center for American Progress and former acting assistant secretary for postsecondary education at the Education Department under President Barack Obama.

Before the Obama-era rule, colleges had only to check one of two boxes — yes or no — to indicate whether their graduates fulfilled that standard, Bergeron said. “Nobody ever said no,” he said.

But the rule was controversial because of the potentially widespread penalties for for-profit institutions and even public community colleges.

In rejecting the gainful-employment rule, the department has now proposed eliminating all penalties for colleges whose graduates perform poorly in the job market. Instead, the department plans to require all colleges to report the earnings of their graduates, on the theory that more information alone will help would-be students make better choices for their college education.

“Students deserve useful and relevant data when making important decisions about their education post-high school,” the secretary of education, Betsy DeVos, said in a news release. “Our new approach will aid students across all sectors of higher education and improve accountability.”

Colleges would have to report the earnings data, as well as other information about programs’ prices, student debt, and completion rates, on their websites, and the statistics would also appear on the government’s College Scorecard website.

‘Zero Percent’ Chance

But, tweeted Jordan Matsudaira, an associate professor of economics and education at Teachers College at Columbia University and a former economics adviser to President Obama, there is “zero percent” chance the information will be ready in time for the final rule, which is expected to be published in November and take effect in July 2019.

Career-oriented programs began collecting such data for the College Scorecard in 2012, Matsudaira said, in order to report earnings six and 10 years later. The soonest that information would be available is probably late in 2019, he wrote.

“To be clear, program-level information is a good idea and will be useful,” Matsudaira said. “We wanted to do this in the original Scorecard launch, but the data was not yet ready.”

But the Education Department will not wait to report the longer-term earnings, said a department spokeswoman.

“Although ultimately we want to focus on longer-term earnings after graduation, we do not want to wait until those data are available to revise the Scorecard,” Elizabeth Hill, the department’s press secretary, said in an email. “So in the initial years of the expanded Scorecard, we will focus on two- or three-year earnings data.”

That practice may initially make some small, liberal-arts colleges unhappy, said Bergeron, because their graduates may not realize their earning potential for several years or until after they earn a graduate degree.

A much deeper problem hampers the collection of earnings data from graduates who as students did not receive federal financial aid, said Clare McCann, deputy director for federal and education policy at New America, a think tank.

In order to collect such information on those graduates, the federal ban on a student-level data network would have to be changed by Congress, McCann said. While most students at for-profit colleges do receive federal loans and grants, some public community colleges enroll few recipients of federal aid, she said.

In California’s community colleges, for example, about three-quarters of students do not apply for federal aid, she said, so the data for those institutions might not accurately represent their whole student body.

Michael Itzkowitz, who helped develop the Scorecard during his time at the department, said the move to include earnings data for graduates of each college program was a positive step, but would take time, staff, and complex coordination within the department and with other agencies.

DeVos “should be transparent that these data won’t be available by the time the new gainful-employment rule takes effect — it may even be years before those data can be produced,” said Itzkowitz, now a senior fellow in higher education at the think tank Third Way.

And, like many other critics of the proposed rule, Itzkowitz was skeptical about the value of more data as a substitute for stronger regulations.

“The department’s one-sentence, nonbinding commitment in the preamble of the gainful-employment rule,” he said, “seems clearly designed to provide cover for what’s actually happening — the elimination of protections for students who enroll in low-performing higher-education programs.”

Eric Kelderman writes about money and accountability in higher education, including such areas as state policy, accreditation, and legal affairs. You can find him on Twitter @etkeld, or email him at eric.kelderman@chronicle.com.

Correction (8/14/2018, 11:57 a.m.): This article originally provided an incorrect job title and affiliation for Jordan Matsudaira. Effective last month, he is an associate professor of economics and education at Teachers College at Columbia University, not an assistant professor of policy analysis and management at Cornell University. The article has been updated to reflect this correction.