Globe official: Feds listened, but measurements still off

I’ve just spoken with Thomas Kosel, director of government relations for Globe University / Minnesota School of Business, to get his reaction to the gainful-employment rules.

He said he hasn’t had a chance to talk to the members of the Minnesota Career College Association about the rules, so is not speaking for them.

But here’s his take:

“The department clearly did read the comments (from critics of the draft law) and digest them, and they made some adjustments. … I think it’s a victory for students, because the metrics are a little bit wider, so more programs will be able to meet and comply now. So that’s good for everyone. I give them credit for adjusting.”

More specifically:

“When you look at the metrics that the programs will be measured by, like the debt load to wage, they went from 8 percent to 12, so that’s a significant increase. On the repayment side, they dropped it from 45 to 35, so that’s certainly an easier metric to make. So on that respect it’s to their credit.”

That said, he told me:

“Fundamentally, the problem I still have with the whole concept is that they’re trying to use those metrics to measure something that I don’t think is correlated. In other words, I don’t think those measurements are going to reduce student debt by themselves. … They don’t measure the quality of a program, they don’t measure the outcomes of the program — in terms of placement and those things — they just look at wages, which can vary across the country or vary by the size of a firm. So fundamentally I think it’s the wrong measurement.”

Also,

“Somebody could argue that it’s a type of price control. It would be nice if it was across the board – for public and nonprofit also … Obviously, we want to price ourselves so the students can afford us. (The regulation) certainly is a way of putting ceilings on our prices because of the ratio of wage to debt and all that. Is that a function of the Department of Education? I guess that’s a question that can be debated for a long time.”

So what changes have the rules prompted so far?

Globe has already starting putting the financial literacy of students “up front”, offering information both in the admission process and first quarter of classes.

He also said the school is trying to find ways to place students “in the best program possible” and give more support so students land “in the right career field.” That includes helping with interviews, building relationships with employers and increasing the number of available internships.

Kosel said the rules may require a change for students: the ability to be more focused:

“There just isn’t any room for somebody to change majors as often as people have in the past because that can accumulate debt.”

Kosel said he knows of no concrete attempt to challenge the new law in court.