New research by the Texas Public Policy Foundation reveals that 89% of college programs that fail the ‘gainful employment’ test are at public and private non-profit schools. These programs fail to prepare students for gainful employment and can be linked to the crushing student loan debt crisis facing the country.

“We tend to think of student debt as an investment that will be paid off once we’re out in the workforce,” said TPPF senior policy analyst Dr. Andrew Gillen, the author of the report Lessons from Gainful Employment. “But what if you graduate from a program that doesn’t prepare you with valuable, marketable skills in the real world? Or, more importantly, what better decisions would you have made if you knew beforehand that a program you were considering failed the test and would likely saddle you with unpayable debt for decades?”

Unfortunately, for many students this information was unknowable because the regulations in place exempted the vast majority of programs at public and private non-profit schools from being evaluated. Instead, the evaluation focused almost entirely on for-profit schools giving the misleading impression that public and private non-profit schools made up a small percentage of failing programs.

“TPPF looked at what would happen if all the schools and programs were evaluated and found that, instead of representing just 2% of failed programs, public and private non-profits made up a whopping 89% of failed programs and 73% of the kids graduating from failing programs,” said Gillen. “The analysis shows the error of only applying accountability selectively.”

The regulations requiring the evaluation of schools under a gainful employment test were rescinded several years ago, but a U.S. Department of Education negotiated rulemaking committee is considering reinstating the rules. Gillen recommends expanding the test to ensure all school programs are evaluated to give students and families the complete picture when assessing which schools to attend and which programs would inflict students with generational debt.

“New approaches to accountability in higher education are sorely needed,” Gillen writes. “We encourage policymakers to include gainful employment’s positive contributions (program level evaluation and the inclusion of student earnings post-graduation) while avoiding gainful employment’s fatal mistake (selective rather than universal application of accountability).”

“The Biden administration has the opportunity to improve accountability in higher education by protecting more students through an expanded accountability framework that holds all institutions accountable for the outcomes of their students.”

Read the full paper here