DOE Calls for More Transparency to Make Postsecondary Education Worth the Cost

​An amended Department of Education (DOE) regulation, effective July 1, 2024, calls for postsecondary schools to make the cost of a college education—and one that leads to a good-paying job—more transparent to students and their families.

There is increasing public recognition, "that some higher education programs are not 'worth it' and do not promote economic mobility," the DOE commented in the Federal Register on Oct. 10, when the final rule was published.

Student debt is uppermost on the minds of today's college students. In a recent survey by Handshake of 1,148 members of the Class of 2024, more than two-thirds (69 percent) of the participants who have student loans said that debt will influence the jobs they will consider upon graduation. It's also why 33 percent of this class plan to take on a second job—freelance, gig or part-time work—to supplement their full-time position.

The amended rule follows the announcement on Oct. 4 that President Joe Biden canceled an additional $9 billion in student debt; the move comes just as repayments are due starting this month after a three-year pandemic-related pause. The most recent debt forgiveness affects 125,000 people. To date, the Biden-Harris Administration has approved $127 billion in debt cancellation for nearly 3.6 million borrowers, according to a White House statement.

More Accountability

The DOE wants more accountability from higher education programs that participate in Title IV of the Higher Education Act of 1965. Under Title IV, federal programs provide financial assistance through aid such as Pell grants and direct loans to students.

The DOE noted the regulation changes are a result of listening to a number of researchers over the last several years who have recommended "an added layer of accountability through a high school earnings metric" to ensure students financially benefit from their training. 

Additional measures were needed, the DOE said, to protect students from financial harm resulting from "programs that consistently produce graduates with very low earnings, or with earnings that are too low to repay the amount the typical graduate borrows to complete a credential."

"As we noted in the [Notice of Proposed Rulemaking], most postsecondary programs provide benefits to students in the form of higher wages that help them repay any loans they may have obtained to attend the program," the DOE said in the Federal Register announcement. "But too many programs fail to increase graduates' wages, having little or even negative effects on graduates' earnings." 

[SHRM Foundation toolkit: Skilled Credentials at Work] 

In fact, employers in some sectors are beginning to place less of an emphasis on a college degree as a job requirement. The share of jobs that require a degree fell to 44 percent in 2022, down from 51 percent in 2017, SHRM Online reported, citing research from the Burning Glass Institute. 

IBM, Accenture, Dell and Google have all taken steps to reduce the number of jobs that require a degree, and are reworking job descriptions to attract talented nongraduate candidates. More recently, Walmart has said it is removing the degree requirement from hundreds of corporate job descriptions. State agencies have followed suit; in July Virginia joined states such as Maryland that have removed the college degree requirement for many of its jobs.

"While having a degree can be a useful indicator of ability, it can also be a red herring," said Lee Biggins, CEO and founder of Chicago-based jobs site Resume-Library. "Except in the case of specialized professions—doctors, dentists, lawyers—the old adage generally holds true: 'Employers require a degree, but most jobs do not.' " 

James Neave, head of data science at Adzuna, a job search engine headquartered in Minneapolis, pointed to 7.6 million advertised vacancies on its site in the U.S. in September, noting more than 10,000 job openings that don't necessarily require a degree offer salaries over $200,000.

"Emerging technologies are growing fast, making a degree less valuable than hands-on experience and knowledge," he said. "We're seeing workplaces transitioning to recognize skills in the same way they have traditionally understood degrees."