The Department of Education is due to issue the formal gainful employment rule any day. Yesterday New York Times reporter Tamar Lewin wrote a piece “Facing Cuts in Federal Aid, For-Profit Colleges Are in a Fight” attempting to explain both sides of the debate. The article quotes Career College Association president, Harris Miller and cites a CCA-sponsored Charles River Associates report estimating that 18 percent of for-profit colleges’ programs, serving a third of for-profits’ students, would not satisfy the gainful employment regulations.

Unfortunately, the article also relied on Steven Eisman, a Wall Street analyst known for predicting the subprime mortgage crisis to comment on this story. Last week Mr. Eisman used hyperbole and emotion to compare career colleges to subprime mortgages and predicted that career colleges would be the next big downfall. However, he left out an important distinction: A mortgage is a liability; the same cannot be said for an education. An education is an asset in terms of the long-term annuity that it can provide a graduate in higher salary and new career opportunity. An education lays the groundwork for pursuing a successful career and will pay you back, a mortgage will not.

The debate is just getting started……