The Department of Education is finalizing its Gainful Employment regulation, intended to hold postsecondary career education programs accountable for their students’ economic outcomes. Many career education students attend for-profit schools that too often promise great jobs upon graduation, but leave students buried in debt. Just 10 percent of higher education students attend for-profit colleges nationwide, yet borrowers from these schools account for nearly half of all defaults on federal student loans.
Despite the overwhelming evidence in favor of reform, the for-profit college industry enlisted The Parthenon Group, a consulting firm, to criticize ED’s justification for the rule. Previously ED demonstrated through statistical analysis that student characteristics like race/ethnicity and socioeconomic status only explain a small proportion of the variability in a program’s student outcomes. In other words, whether students succeed after leaving school depends more on the performance of their GE program than on the student’s characteristics. Parthenon claims that ED’s method is flawed, and proffers its own analysis that, not surprisingly, does its best to excuse schools from responsibility for poor outcomes. The analysis suffers from serious flaws, however, that render the findings biased and impossible to interpret.