Cosmetology Schools Everywhere
Most Cosmetology Schools Exist Outside of the Federal Student Aid System
As policymakers debate new regulations on career programs under the Gainful Employment (GE) rule, a key concern of the for-profit sector has been the fate of cosmetology programs that disproportionately fail proposed metrics based on earnings and student loan debt. The GE regulations would impact nearly all for-profit programs as well as non-degree programs in other sectors that receive federal student aid under Title IV of the Higher Education Act of 1965. These “Title IV” programs receive taxpayer funding in the form of Pell Grants and federal student loans.1 Given that Title IV institutions and programs rely on public funds and face mandatory data reporting, there is good reason why Title IV programs have been the focus of most analyses of the cosmetology sector. In fact, a recent report by the Century Foundation finds that 98 percent of Title IV cosmetology programs would fail the newly-proposed high school earnings threshold under GE, as cosmetology graduates typically earn less than the average high school graduate in their state. For-profit and cosmetology school advocates have decried the new rules as devastating to the sector, but, as we show below, the impacts on the sector may be very different when we consider the full set of cosmetology schools in the United States—including those that do not participate in Title IV.
In the analysis that follows, we show that the 1,000 or so Title IV cosmetology institutions make up only a small portion of all cosmetology schools in the United States, when counting both Title IV- and non-Title IV-eligible institutions. Our numbers build on previous research that suggests that many hundreds, if not many thousands, of cosmetology schools operate outside of the federal student aid system. Since these “non-Title IV” schools would be unaffected by new regulations aimed at Title IV-participating institutions and programs, arguments that GE would limit student access to a cosmetology education are largely unfounded.
The existence of large numbers of cosmetology schools operating completely outside of the federal student aid system, also indicates that even Title IV institutions that lose federal aid under GE could continue to operate. Previous research on for-profit institutions and the case studies below suggest that these schools may even lower their tuition—and thereby reduce student debt—in the absence of federal subsidies. If quality is similar, students would be better off in these low-cost institutions.
Critical for policy, our analysis suggests that even if all Title IV cosmetology programs lost access to federal student aid under GE, a large number of cosmetology programs and institutions would continue to operate–many in the same counties as the failing Title IV programs and many with lower tuition and similar pass rates on exams. The implications are critical for cosmetology students, who are disproportionately women and people of color, and for policymakers as they strive to improve equity and accountability in higher education.
