Big Decisions Impact Federal Data Policy

by Rachel Zinn
June 30, 2015

Two major events last week — a court decision on gainful employment rules and an announcement from the Obama Administration on college ratings — are shaping the federal approach to publicizing and using data on postsecondary education.

A decision by a U.S. District Court upheld the Department of Education’s plan to use debt-to-earnings ratios to measure whether career-oriented postsecondary programs adequately prepare students for “gainful employment.”

The Department of Education (ED) released the final gainful employment regulation in October 2014. It’s designed to ensure that students are not using Title IV federal student aid, like Pell Grants and loans, to enroll in programs that result in more debt than they will realistically be able to pay back.

Programs that do not meet a specified debt-to-earnings threshold will not be eligible for federal financial aid. Post-program earnings will be calculated by matching ED’s data on federal aid recipients with earnings data held by the Social Security Administration.

The regulation has faced multiple court challenges and undergone several revisions since its initial release in 2011. The rule is now scheduled to go into effect July 1.

Also last week, ED announced a shift in its proposal to create college ratings. Instead of putting schools into categories based on selected performance metrics, ED will develop new tools to display data that may help prospective students and families select colleges. 

ED was vague about the data points that will be included in the new tools, set for release later this summer. As reflected in our comments submitted in February, WDQC believes that the information should include data on graduates’ labor market outcomes.

Over on the Hill, legislators also are grappling with the federal role in publicizing postsecondary data. In May, both the Senate and House introduced versions of the Student Right to Know Before You Go Act, which would create a federal student record system to report on postsecondary students’ progress and outcomes, including earnings.  For more background on the legislation, read this new brief from the Postsecondary Data Collaborative.

WDQC endorsed the bill through a public letter, and helped to organize support from other groups.

The movement to provide students with more information about labor market outcomes aligns with recent research from New America, which shows that the top three reasons prospective and current students cite as important for going to college all relate to employment. The number one reason — “to improve my employment opportunities” — was rated as “very important” by 73 percent of survey respondents and “important” by another 18 percent.

Survey respondents also noted that information about employment outcomes is important to help them decide on a specific college. For example, 70 percent rated average starting salaries for graduates as “very important” or “important.”

The New America report is based on a survey of more than 1,000 individuals ages 16 to 40 who do not have college degrees and plan on enrolling in a two-year or four-year college within the next 12 months, or are currently in their first semester. The survey results echo earlier research on the importance of workforce results chronicled in a CLASP report.