What “Gainful Employment” Means to Students

Robyn Tellefsen | July 23, 2012

what gainful employment means when evaluating a collegeWhen you’re 18 years old and fresh out of high school, the college information that matters most to you probably includes extracurricular offerings and the intangible fun factor. When you get a little bit older and you’re going back to school to get ahead in your career, your college criteria tend to shift. The emphasis is less on the “college experience” and more on “return on investment.” In other words, you want to know that the degree for which you paid dearly will pay you back.

No reputable college can guarantee your employment upon graduation, but you can get a pretty good idea what to expect by looking at the grads who have gone before you. That’s where the Department of Education’s “Gainful Employment” data comes in, though unless you’re a born number cruncher, the statistics might be no more useful to you than hieroglyphics.

Enter a free new web tool created by CollegeMeasures.org that makes it easier to review the data and determine whether specific college-level career training programs are making the grade. The website is a joint venture of the American Institutes for Research and Matrix Knowledge Group and is designed to drive improvement in higher education outcomes in the U.S.

The web tool is organized by state and allows users to view institutions by name to see if each of their programs complies with federal requirements.

For the uninitiated, “gainful employment” is based on three performance standards:

1) Loan Repayment Rate – at least 35 percent of students repay their student loans;

2) Annual Income to Debt Ratio – graduates’ total yearly loan payments are 12 percent or less of their annual income; and

3) Discretionary Income Debt to Earnings Ratio – annual loan payments do not exceed 30 percent of a graduate’s discretionary income (the amount available after paying for necessities such as food, housing, and clothing). Institutions must meet at least one of these standards in order to be eligible for federal financial aid.

Here are some highlights from the data:

  • SCHOOLS: Grand Canyon University in Phoenix, AZ, boasts a perfect record – all 12 of its programs passed all thresholds. Over half of its programs are education related.
  • STATES: One of the most successful states is Connecticut. None of its 52 programs failed all metrics, and 77 percent of its programs passed all thresholds – the second-highest percentage in the nation.
  • STUDIES: Numerous areas of study had a perfect record of no failing programs, with the largest being Mechanic and Repair Technologies (159 programs) and Construction Trades (60 programs).

And some lowlights:

  • SCHOOLS: Eighteen schools had a 100 percent failure rate, though many of these offered only one program. Sanford-Brown College in McLean, VA, had all three of its programs fail.
  • STATES: Alabama had only two of 27 programs pass all metrics, with seven programs (19 percent of their total) failing all thresholds.
  • STUDIES: The field of study with the worst performance was Homeland Security/Law Enforcement, which had 24 percent of its programs failing all three metrics. The next two lowest performers were Visual and Performing Arts (15 percent failure) and Communications Technologies (15 percent failure).

As with any data, you can’t consider the numbers in isolation; you’ve got to weigh them against additional factors. Just because the Homeland Security programs were low performers in this metric doesn’t mean you should write them off altogether. Even the Department of Education warns that these informational rates were not intended to form a basis for making assumptions about specific Gainful Employment programs or for making projections about future years’ rates.

So if the school and program you’re interested in didn’t do so well, use the data as a jumping-off point to dig deeper and ask more questions – before you enroll.

–Robyn Tellefsen


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