Secretary of Education Betsy DeVos recently announced plans to eliminate rules put in place during the Obama administration that require career-education colleges to show that the credentials they award lead to gainful employment. In California, these rules have helped shift enrollment from expensive for-profit institutions to public community colleges, which offer career education programs at much lower cost. Indeed, California’s community college system is one of the most affordable higher education institutions in the country.
Many are concerned that eliminating gainful employment rules will lead to a loss of accountability and even a resurgence of enrollment in for-profit colleges. Some of those colleges have engaged in predatory recruiting practices, and many have high dropout rates and exorbitant student debt. In California, there are also concerns about a reversal of recent gains in affordable access to higher education—particularly among groups that have historically been underserved.
Partly because of the information provided by the gainful employment rules, career education students in California have been increasingly seeking degrees and certificates at the state’s large public community college system rather than at for-profit colleges. Between 2012 and 2017, the number of associate degrees and certificates conferred by for-profit institutions dropped by 25%. In comparison, the state’s community colleges saw an increase of 47%; in 2017, the number of degrees and certificates they awarded was more than eight times the number awarded by for-profit colleges.
Many for-profit institutions have targeted workers looking to get into in-demand fields such as health or family and consumer sciences. These for-profits have marketed options that lead to credentials—known as short-term certificates—that can be earned in less than one year. In 2012, private for-profit colleges awarded almost 21,000 short-term certificates compared to 38,000 awarded at the community colleges. But by 2017 the number of short-term certificates awarded had declined to fewer than 7,000 at for-profit colleges and risen to more than 55,000 at the community colleges. Many of the students who have shifted to the community colleges in recent years are from historically underserved backgrounds (e.g., African American, Latino, older, and low-income students). These students now have opportunities for career education without the hefty price tag attached to programs at for-profit colleges.
The elimination of federal gainful employment rules could have a negative impact on affordable access to career education. However, efforts by California’s community colleges to attract students who might be drawn to for-profit institutions will continue. So too will state rules that make institutions with low graduation rates and high loan default rates ineligible for Cal Grants. These state-level initiatives might not be able to prevent a resurgence of exploitative for-profits, but they could make a difference for many Californians.