NAICU Washington Update

Cantor Remarks Bolster Measuring Colleges’ Success Via Graduates’ Earnings

March 12, 2013

Efforts to link assessment of a college program’s value to the amount of money its graduates make gained momentum last month. House Majority Leader Eric Cantor (R-Va.), in an address to the American Enterprise Institute(see section below), lauded legislative efforts by Sens. Ron Wyden (D-Ore.) and Marco Rubio (R-Fla.) to collect and publish information about the average earnings of college graduates. Under their Student Right to Know Before You Go Act, college programs would be linked to their graduates’ earnings figures in order to allow comparisons of programs at different institutions. Cantor’s endorsement of the concept adds a new sense of urgency to the legislation, suggesting it could move through Congress more quickly than expected -- perhaps as soon as this spring.

The Wyden-Rubio bill was one of the few bi-partisan higher education bills introduced during the last Congress. It is gaining traction amidst a growing chorus proposing that college program quality should be measured by graduates’ earnings. Organizations such as College Measures are working with several states to publish these earnings analyses. A notable example – one which has become a national model – is the report published on the website of the State Council of Higher Education for Virginia.

Early interest in the earning potentials of college graduates was driven by efforts to curb fraud and abuse within the student aid programs -- a campaign that led to development of the so-called “gainful employment” regulations. However, current focus on earnings is broader based, spurred by a constant barrage of news reports highlighting college costs, student debt and high unemployment levels.

Normally, proposals such as the Wyden-Rubio bill would be considered as part of an overall reauthorization of the Higher Education Act. However, with action on HEA unlikely for several months or even years, the Wyden-Rubio bill may well move on a faster track. In fact, many have speculated that the measure could be approved as part of legislation to prevent the student loan interest rate increase that is currently scheduled to go into effect on July 1, 2013.

NAICU members with concerns about equating the value of a higher education with the earnings of recent graduates should express those concerns to their senators and representatives.

Excerpt from remarks of House Majority Leader Eric Cantor to the American Enterprise Institute on February 5, 2013:

One of our priorities this year will be to move heaven and earth to fix our education system for the most vulnerable. And when those children graduate from high school, we must expand their choices and college should be a viable option. In 1980, the average cost of college was roughly $8,000 a year. Today, it is over $20,000, and less than 60% of the students who enroll in a four-year program graduate within six years. Clearly, something is broken.

According to President Obama’s former jobs council, by 2020 there will be 1.5 million jobs without the college graduates to fill them. While there is a persistent unmet demand of 400,000 to 500,000 job openings in the health care sector alone. Recent reports indicate there are not enough applicants with the skills necessary to fill the jobs in the booming natural gas industry in America.

Suppose colleges provided prospective students with reliable information on the unemployment rate and potential earnings by major. What if parents had access to clear and understandable breakdowns between academic studies and amenities? Armed with this knowledge, families and students could make better decisions about where to go to school, and how to budget their tuition dollars. Students would actually have a better chance of graduating within four years and getting a job.

Helping students realize opportunity and a career, while keeping tuition costs low, makes common sense. Senators Rubio and Wyden have a proposal that they unveiled here at AEI, which addresses this goal. I look forward to working with them and Chairman John Kline in pursuing legislative action in the House.

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