New regulations proposed by the U.S. Department of Education could result in many massage schools being unable to offer federal financial aid to students. Career Education Colleges and Universities (CECU), an association representing the proprietary sector of higher education, has issued a call to action for industry members to provide feedback to the Department of Education.
The problem, advocates say, lies in the fact that the Department of Education has determined that massage therapists make on average $12.50 per hour—and due to that debt-to-earnings ratio, massage school graduates would therefore not be able to repay student loans.
However, according to the U.S. Bureau of Labor Statistics, the median wage earned by massage therapists is $46,910 per year, or $22.55 per hour if working 40 hours per week. Most massage therapists work fewer than 40 hours per week, making their hourly earnings even higher.
“The Department of Education has grossly miscalculated the average hourly compensation of massage therapists and estheticians, and [is] applying the debt-to-earnings ratio based on therapists earning an average of $12.50 an hour, which we know is very inaccurate,” said CG Funk, Chief Therapeutic Experience Officer at Massage Heights Franchising LLC, in an email to MASSAGE Magazine and massage industry stakeholders.
In separate email correspondence with MASSAGE Magazine, Funk said she believes the Department of Education is including earlier COVID-19 pandemic years, when many massage practices and franchise locations were closed for at least several months, in its calculations.
“These new rules will affect massage, cosmetology, and skincare schools by removing their ability to offer government student financial aid, which 80{6b2fa08d5993bc7e76ffaca7a3a295e96a3274ffb0576a302ceddffe26335ebd} of their students utilize,” said Funk. “As we know, these types of careers offer non-traditional hours, self-employment, and account for not just hourly pay but also percentage compensation and tips (which workers don’t always claim), so the debt-to-earnings ratio calculations simply don’t apply equitably to these professions.”
CECU’s President and CEO Jason Altmire said, in a release, “CECU is disappointed that the Department of Education did not take into account stakeholder feedback and failed to implement substantive changes to its gainful employment proposal, which continues to exempt the majority of postsecondary education programs and fails to protect millions of students. The rule unfairly targets programs at proprietary institutions and fails to account for the unique challenges facing students and communities that career-oriented programs serve.”
During the public comment phase, said Altmire, “We urge the Department of Education to consider sensible changes that improve the rule to protect all students and hold public, private nonprofit, and for-profit institutions equally accountable for their outcomes.”
The Alliance for Massage Therapy Education was contacted for a statement about the proposed rules, but did not reply by press time.
Submit a Comment
Massage therapists, students and employers are asked to submit—by June 20 at 11:59 p.m. EDT—a comment on the Department of Education’s site addressing these proposed rules.
Comments must be submitted via the Federal eRulemaking Portal at regulations.gov. To navigate directly to the comment submission page, click here and select the “Comment” box directly under the heading. Include the Docket ID (Docket ID ED–2023–OPE–0089) at the top of your comment.
The complete call to action, with detailed instructions and potential talking points is shown below.
A summary of the rules may be read here.
The Call to Action
The following is the call to action created by the Career Education Colleges and Universities:
Industry Call to Action: Comments on Gainful Employment
“The US Department of Education released proposed rules that will significantly impact the beauty and wellness industry. Specifically, the Gainful Employment Rule could force the ultimate closure of most of the beauty and wellness schools in America significantly impacting the workforce that is already hurting for new professionals.
The following is an overview of the rule along with draft guidance on how to submit your comments to the US Department of Education on the proposed Gainful Employment rule.
Overview of Gainful Employment (RIN: 1840-AD57)
As expected, the Department is proposing to re-establish the gainful employment framework, which it calls its strongest ever. Although the Department’s proposed rule resembles the 2014 GE rule that was not enforced because of Industry legal proceedings, the NEW rule omits critical protections that were designed to ensure a fair process and the use of the best possible data. The proposed GE rule also introduces a new additional accountability metric that, if failed, would lead to a loss of eligibility, even if a program’s D/E rates were passing. Additional details are as follows:
- This proposed rule would apply to all “gainful employment” programs at Cosmetology and Massage schools.
- A program would simply fail if its annual earnings rate is greater than 8 percent and its discretionary earnings rate is greater than 20 percent.
- If a program fails one year, it would be required to begin distributing warnings to current and prospective students and to post similar warnings on the school’s website. If a program fails two out of three consecutive years, the program would lose Title IV eligibility. For a period of several years, institutions also would be prohibited from introducing new programs that resemble failed programs.
- The Department intends to use debt and cost information from years predating the effective date of the new rule. In other words, if the proposed GE rule becomes effective July 1, 2024, the Department will use debt and cost information from prior years (potentially as far back as 2017) to calculate the first round of D/E rates.
- The proposed rule provides limited opportunity for institutions to work with the Department to verify the data used in the D/E calculations.
- The Department does not specify which federal agency will provide the earnings data used for its calculations, though it is anticipated that it may turn to the Internal Revenue Service. Once again, the Department offers no meaningful solutions for the myriad issues associated with earnings data, including unreported income, unearned income, self-employment income, wage discrimination, wage disparities based on geography, or market fluctuations (e.g., a global pandemic).
- The proposed rule includes a new additional accountability metric that GE programs would need to pass to maintain eligibility for Title IV funds. This means that a GE program would need to pass both the D/E measure and the new metric, an “earnings premium” measure. This new measure will compare the median annual earnings for students who completed the program to the median earnings for a working adult aged 25-34 with only a high school diploma in the state in which the institution is located or nationally in certain circumstances.
- The Department estimates out of approximately 32,000 GE programs, about 1,800 are projected to fail at least one of the two metrics, which would impact about 24 percent of students enrolled in GE programs.
How to submit your comment:
A comment can express simple support or dissent for regulatory action. However, a constructive, information-rich comment that clearly communicates and supports its claims is more likely to have an impact on regulatory decision-making. These tips are meant to help the public submit comments that have an impact and help agency policymakers improve federal regulations.
It is VERY important that each letter is individual, as the US Department of Education will dismiss form letters.
Key goals of your comments:
Quality of Comments – Fact and data-based; tailored to your unique situation; not “form” comments.
Quantity of Comments – We need to make noise. Put effort into quality, but don’t let perfection be the enemy – file by June 20!
Diversity of Comments – All categories of impacted stakeholders should comment.
Employer Comments
• Employer Information
- State the name of your business – # of employees – years in the business.
- Demographics – {6b2fa08d5993bc7e76ffaca7a3a295e96a3274ffb0576a302ceddffe26335ebd} female – diversity
- Relationship with beauty schools
- Job openings today and the need for licensed professionals
• Economic Consequences of GE Rule Expected
• Inability to fill jobs
• Inability to expand
• Federal, State and local tax revenue loss
Key Strengths To Communicate
• Graduate hires earn far more than $12.50/hour (GE fails programs leading to hourly rate of $12.50/hour or less)
• Career trajectory, earnings trajectory.
• Employees work flexible schedules – share the average hours worked
Manufacture / Distributor or allied Business Comments:
Company information – # Locations, #Employees, How You Serve the Beauty and Wellness Industry
• Economic Consequences on Business Expected from GE Rule
• Loss of client base
• Loss of revenue
• Inability to expand
• Federal, State and local tax revenue loss
• Key Strengths To Communicate
• Commitment to beauty and wellness industry
• History in beauty and wellness industry
• Partnerships, initiatives, and Industry associations
- Initiatives that support diversity and inclusion
Massage/Spa Professionals Comments:
State the number of years in the industry and employment.
Key Theme: VALUE derived from program.
• Economic Value Derived from Education
• Manageable debt, making payments, not in default
• Skills learned in program left them better off than where they were after graduating from high school – prepared for state licensing exam to work in field
• Estimate hourly
• Ability to support themselves (and their family if they have dependents)
• Only local pathway to training for licensed occupation for in-demand occupation
• Non-Economic Value Derived from Education
• Freedom to Choose
• Ability to follow interest and passion
• Access to program
• Flexibility
• Desire to keep path open for future professionals
Comments specifically for Schools:
We do not believe that the Department of Education should impose sanctions for metrics calculated using data from years that exceed the required retention of records limit.
We believe there must be a process for schools to report on programs where the hours have been reduced and the debt reduced in recent years. The debt of previous years will not reflect the current program that is utilizing the same CIP code.
We believe a school should be able to demonstrate programs that were successfully taught out and not have the data apply to their GE data.
We believe that warnings will cause harm to existing students who are focused on pursuing their career.
We OPPOSE the Gainful Employment Debt-to-Earnings based on flawed earnings and lack of appeal. The proposal makes this problem worse, not better than the 2014 GE Rule.
We OPPOSE the Earnings Threshold which is based solely on those flawed earnings. It is poorly supported, targeted, and arbitrary in result.”
About the Author
Karen Menehan is MASSAGE Magazine’s editor in chief–print and digital. Her articles for this publication include “This is How Diversity, Equity & Inclusion Practices Make Business Better,” one of the articles in the August 2021 issue of MASSAGE Magazine, a first-place winner of the national 2022 Folio Eddies Award for editorial excellence.