Last week, I had the opportunity to sit down with the leaders of a large chain of beauty schools for a conversation about rethinking accountability for for-profit colleges. They presented an interesting proposal that would judge colleges by setting clear and universal definitions on a few key metrics, improving the ability of accreditors to audit and verify that information, disclosing that information to students, and also using it to potentially close bad actors.
For example, accreditors would develop a universal definition of a placement rate that colleges would have to adopt. Accreditors would then conduct random forensic audits of schools to make sure reported data are accurate. And since that information was verified and standardized, it could be disclosed to students as a more useful measure. A similar process would be used for completion and licensure rates.
Standardized and verified data collection would improve the quality of those measures, but it fails to solve the underlying problem that the utility of those variables are not uniform across the for-profit education sector.
To put it generally, there are four main issues that for-profit higher education faces. Some schools do not have good graduation rates. Some schools have crippling amounts of debt. Some are too expensive for what they are providing. And some are not providing training that leads to jobs or licensure. (I’m setting aside recruitment issues because that’s a separate problem that isn’t quantifiable in the same way.)
But these problems don’t all manifest equally in all places. Completion rates aren’t as big a concern at schools of two years or less the way they are at four-year institutions. Very few of the stories about programs that weren’t approved to get the student ready for licensure are based at the four-year level. Some shorter programs may be shown as too expensive, but their aggregate debt levels pale in comparison to their four-year peers.
In other words, it’s a diverse sector. And just like any diverse body, the problems and concerns vary in type and degree.
But if you think of an accountability system as something that tries to correct for the problems that can’t be solved by general market discipline, then this diversity is problematic. If we just hold colleges to a graduation rate standard, then all you’ll capture are the four-year schools. If you do it based on the misrepresentation of accreditation, then you’ll only get shorter programs, ignoring concerns about debt burdens. And placement rates are difficult to calculate and require a great deal of subjectivity at schools where the career path and what’s considered a successful job is less clear.
Fortunately, there’s one metric that solves all these problems. It fits any type of school, any type of program. It’s clear and easily understandable by prospective students. And it can be implemented with minimal administrative burden on the school.
Money.
The vast majority of the for-profit sector is oriented toward jobs. Schools’ overarching goal is to provide students with better career and job opportunities and the associated earnings benefits that come with those chances. At the end of the day, those completion, placement, and licensure rates don’t matter if the jobs students obtain aren’t paying a sufficient wage to support the cost of that training. So why not just measure what vocational programs are doing by seeing their effect on students’ bottom line?
Setting up an accountability system around earnings eliminates significant administrative burden. Schools don’t have to spend time tracking down alumni and determining placement. They don’t have to check licensure passage rates. All the information can come straight from the state or federal tax rolls, so verifying it can fit within the existing auditing process.
Students also benefit from a focus on earnings. They can compare wages across schools, locations, and program types and always have it be in units that they understand. There’s no worrying about weighing graduation rates versus placement rates or anything like that. It’s a measure that speaks directly to their motivations for going to school in the first place–better earnings and the better life that comes with them.
Many schools aren’t thrilled with the idea of involving earnings in accountability because it’s harder to estimate what their alumni will earn. But a switch to emphasis on earnings should drive them to form better relationships with their employers–figure out the wages that the market will bear and what kind of skills will produce the best earnings benefits. That information can then be used to drive decisions around what programs get offered, their size, and what should be emphasized within those programs.
A focus on earnings doesn’t say that better data on completion or placement wouldn’t be useful. Knowing the odds of graduating by program or something of that nature could help drive the decision-making process. But unless wages are part of the conversation around vocational accountability, then the most important outcome for all of those programs is being ignored. For-profit colleges present themselves as “market-funded” institutions, it only makes sense then that they should be judged on what the market is actually willing to pay for their graduates.
