ON THE AGENDA | MARCH 18TH, 2014 | Allison Rizzolo

What's Missing When We Talk About Regulating Higher Ed

Improving schools and holding them more accountable is one way to tackle problems like high student debt, underemployment and unemployment. But empowering students to improve their own decision making is another, and equally important.

Ask a college president or a higher ed policy wonk what they think about for-profit colleges, and they'll likely have a strong opinion. But ask the same of a student who's attending a for-profit college and you'll probably receive a blank stare.

For-profit colleges dominate headlines - not only in education media, but also in mainstream press. One of the reasons for-profits are so newsworthy is because they're controversial.

Not all for-profits are the same. Many innovate quickly, offer skills and training directly applicable to the workforce, and provide the flexibility modern students need. At the same time, many are unscrupulous, leaving students saddled with debt and without a legitimate credential.

The federal government is trying to crack down on these less-scrupulous institutions. Via what's known as the gainful-employment rule, the government will withhold federal financial aid from any career education program (for-profit or not-for-profit) that fails to meet certain criteria. For example, average loan payments should not eat up 8 percent or more of a typical graduate's total earnings.

The gainful-employment conversation is mainly relegated to experts, and is relatively meaningless to many students who remain ignorant about for-profit higher education. Forty-seven percent of current undergraduates at a for-profit college say "nothing comes to mind" when they hear the term "for-profit college." Students at community colleges are also unfamiliar with the term, as are adults without degrees who anticipate returning to college. Furthermore, 65 percent of students enrolled in a for-profit college are unsure if their school is for-profit or not.

These are somewhat shocking statistics. But does it really matter if students don't know what for-profit schools are all about? After all, a meaningful and fair gainful employment rule is meant to protect students (and taxpayers) from predatory behavior.

But even the best gainful-employment rule may contain loopholes that leave students vulnerable. These regulations will take some time to implement, and schools will have a couple of years to adjust their programs found not up to par. Plus, to address problems like high student debt and low career preparedness, we need to think bigger than eliminating bad schools.

Our research indicates that, sometimes, prospective students are making uninformed or indiscriminate choices when it comes to selecting a school. It's easy to see how students could end up at a college or program that doesn't fit their needs, regardless of the quality of that school or program.

Here are a few alarming statistics from recent research with current students, adult prospective students and alumni:

  • Just 4 in 10 students currently attending a for-profit or community college considered more than one school before enrolling.
  • At 64 percent, the majority of adult prospective students learned about colleges through TV commercials, billboards and other advertising. Just 18 percent used interactive websites, like the White House College Scorecard. Only 21 percent have spoken to a college guidance counselor in the past year.
  • Just about half of adult prospective students think statistics like a college's graduation rate, loan default rate, or the types of jobs and salaries that average graduates get is "essential" information to know during college searches.
  • 61 percent of undergraduates at a for-profit school do not know how much debt the average student from their school graduates with.
  • At the same time, 7 in 10 alumni of for-profit colleges say students should pay "a great deal" of attention to information on student debt and the jobs and salaries of typical graduates before enrolling at a school.

It's not that these students are thoughtless or willfully ignorant. In fact, concerns about affordability, debt and job prospects top the list of worries and priorities for prospective students. The problem is that that they're not using existing resources or information to inform their college choices. Often, they donít know these resources or information are available, they canít easily find them or they donít think they're important.

For example, many adult prospective students feel the responsibility to graduate rests on the shoulders of the individual, not on the school. They believe they will stick to it and graduate - and it's good that they have this optimism! So, for them, information about graduation or drop-out rates isn't particularly valuable during college searches.

Even if truly "bad" schools are removed from the picture, even if students don't end up at a school that robs them blind, they may still end up somewhere that doesn't fit their needs. Improving schools and holding them more accountable is one way to tackle problems like high student debt, underemployment and unemployment. But empowering students to improve their own decision making is another, and equally important.

Learn more about how leaders in higher education, policy and philanthropy can work to better engage prospective students and help them make more informed college choices.


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