Ep 420 - Gainful Employment (and the 100% rule) with Les Sweeney

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0:02:01.4 Les Sweeney: I'm Les Sweeney and you're listening to the ABMP podcast, a podcast that speaks to the massage and bodywork community. I'm delighted to be here today to talk about some of the government regulations issues that the massage profession is dealing with as we begin 2024, specifically gainful employment, as well as the Massage Interstate Compact. And I'm especially lucky to have my friend Lance Hostetter joining me today. Lance is our Director of Government Relations for ABMP. Hi, Lance.

0:02:31.3 Lance Hostetter: Hi, Les. Thanks for having me.

0:02:32.5 LS: Absolutely. So, Lance, I was thinking we might wanna cover a couple subjects. We've got a few topics here to chew on and talk a little bit about for starters. Let's talk about the gainful employment rules that became first enacted last October and have certainly caused quite a bit of unsettlement, I guess you would say, in the massage education community and certainly something that we've been paying very close attention to and working on as well. So, maybe start by saying what exactly happened with this? 

0:03:04.6 LH: Yeah, well, gainful employment and the rules that we're referencing here today are a broader part of higher education regulations set forth by the Biden administration. And these have a history that date back all the way to 2010 and the Obama administration. And it's important to know the goal for these regulations is consumer protection, particularly for students. And what the federal government is trying to do is to limit the debt students accrue by going to for-profit schools. So, you're thinking about what the administration is thinking about is largely those predatory schools that are kind of out of existence now. But in doing so, they've set a number of rules that impact particularly clock-hour programs that we care about. When you think about clock-hour programs, you're thinking about occupational schools.

0:04:00.7 LH: And what falls in there is massage. And so, gainful employment, the two sections that we're gonna talk about are gainful employment and the 100% rule. Gainful employment takes into account a student's ability to make money after they leave a program. So, the federal government is saying by these new rules, hey, you have to prove that your students can earn back what they're paying to go to your school. If you can't, then we're gonna place restrictions on you to ensure that you can't do that. That's the first part. The second part is the 100% rule. And the 100% rule was formally the 150% rule. And what that was is the federal government said clock-hour program schools, occupational schools can provide education to students at 150% of the state minimum requirement for licensure in your state. So, for a 500-hour state like Colorado, where we're based, a school could have a 750-hour massage program. And the idea is that the state sets the minimum for public safety and the school is concerned about the quality.

0:05:17.1 LH: So, 150% of the state minimum allowed schools to focus on quality. The new rule, they've lowered that to 100%. There's a catch-22 in that, as you know. And the catch-22 is there's another section of the gainful employment rules that say in order for students to be eligible for student aid, Pell grants and loans, actually direct loans, not so much, but Pell grants specifically, you have to go to a 600-hour clock-hour program. So, if you're a 500-hour state, you can't accept students into your program who are Pell-eligible. So, it disqualifies students from being able to participate in that program. Obviously, this has a great impact on the massage industry and massage schools. And I think that's something that we're going to address further in our government affairs work. But that's a brief history of where we are and how we got here.

0:06:16.0 LS: For those listening, Lance has been part of the ABMP team for the last year, and I'm older than dirt and have worked in this space for a while as well. And philosophically, I think there aren't a lot of people probably who have an issue with the fact that the government, the way I've explained it historically is the government's the bank, and the bank sets the rules. When you apply for mortgage or you got a car loan or do whatever, the bank sets the rules and tells you whether you're qualified or eligible or not. And so, I think the government as the bank has said, we're not in the business of lending money to students who are being put through excessive cost or hardship in order to get a degree in order to start practicing. Philosophically, I'm supportive of that perspective. In practice, it has been the equivalent of the ant killing the sledgehammer. And as you mentioned, this started back in the early teens under the Obama administration.

0:07:20.1 LS: And it helped root out some of those bad actors that you spoke of. And there were bad actors. It wasn't a massage problem as much as it was a vocational education problem. And at the time, they were going after the University of Phoenixes of the world. And I always remember the poster child story. I think it might have been in the New York Times of someone who had racked up $86,000 of student debt and could only get a job at the makeup counter. And they were saying, you know, this is cattywampus. This can't work. We have to fix this. But a lot of good programs get swept up when this thing happens. And when it was partially implemented in the Obama administration, there were some negative effects. They started to more aggressively enforce the 150% rule. And again, in philosophy, you can understand that the government says we're lending money for someone to go to a program and the state has decided it's this amount of time and now I have to go pay for twice that or three times that. That might feel excessive. But the nature is certainly specifically to massage and part of our argument has been, and the hard part about this is we are literally, you know, one of the leaves floating on the river and the river is the higher education system.

0:08:38.1 LS: It's not all about massage, but we as a profession are the ones being adversely affected. And what's happened is that programs are now being told, you can't offer, you know, as of this coming July, you can't offer federal aid. And as you said, it's in the form of Pell Grants. Well, about half of eligible students get Pell Grants. And it typically represents between $4,000 and $5,000. So it's not immaterial. It certainly affects schools and their ability to operate, but it's also an access issue. And especially in massage where we've seen the number of people going through massage programs drop to 20,000 to 25,000 per year. And we have employers saying, we need more massage therapists.

0:09:24.1 LS: That's a separate topic for conversation. But nevertheless, the implementation of these rules feel like they're just creating and not even a headwind, but a bit of a hurricane. And it feels like it's just overkill in regulation, which historically, you know, my personal perspective is I'm not opposed to this concept, but in practice, it's gone way off the rails.

0:09:47.4 LH: It's interesting, isn't it? The idea here is that we're protecting students from collecting too much debt that they can't pay down. I think that's the overriding goal here. But to your point about access, are we cutting off opportunity for students in this same way? And I think the answer is yes. I think that however positive you feel about the idea of the regulation, does it go too far that it also impacts students negatively? And I think the answer here is yes, it does.

0:10:18.6 LS: Especially as it relates to massage, because we know that there are 47 states that regulate 46 or 47 states that regulate massage. Twenty-three of them have a 500-hour requirement. So they are smack dab in the middle of that catch-22 you talked about, which is any state that's... Any school that's gone through an accredited program. And it's important to note, this is only for aid-eligible schools. And that represents about 45% of massage programs. So it's not every school out there, but any school that is accredited and offers financial aid is subject to this.

0:10:54.3 LS: And if you're in a state like Nebraska, where you have a 1,000-hour program and you have a 1,000-hour requirement, you're not gonna be affected. But if you're in Florida or California... Or excuse me, Colorado or 21 other states, you are gonna be affected if you happen to offer a program that's longer than 600 hours and are accredited and eligible for financial aid. As you referenced, you can still get a loan, but Pell Grants are taken off the table. And Pell Grants are special because they're special, because they're grants, they're not loans. And one of the things, you know, we've... The world's changed with our interest rate environment these days. But one of the comments I used to make when I would talk to schools or students, and they'd say, well, they're eligible for loans.

0:11:39.0 LS: And I typically would say, it's not the interest, it's the principal. Well, these days, it's the interest too, but it's the amount of money you're borrowing to go to school that just puts you in that hole before you get started. And Pell Grants were exactly that, a great gift. And they were fulfilling the purpose that they had been set up for, which is to offer opportunity for people to get training and enter the workforce. And that's what's frustrating in this exercise is that in the effort to go, and I think there's also this misconception out there, certainly as it relates to massage, but that the schools are the bad guys. I've worked with massage programs for the last 27 years. They're the good guys. They're the ones out there doing the work. And we could have a line of school owners and directors out the door telling you, we're not here getting fat and happy.

0:12:30.9 LS: This is hard work, and we are struggling. And now you've just basically pulled this rug out from under us. So you can hear my frustration. I totally understand. But that's what's, we've spent the first third of this conversation identifying the problem. I don't think there's any question how we feel about that perspective.

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0:13:39.0 LH: Yeah. So what are some of the, what are the some of the possible remedies that schools and states can start thinking about or are pursuing currently? 

0:13:48.3 LS: Well, it's interesting because part of what's happened for us is this outreach to say, are you guys gonna do something about it? And we are. It's not a magic wand, first of all. It's a federal regulation that was instituted by the Department of Education that affects way more than just massage. So it's not even that, let's assume for a second, we had a functioning Congress. It's not even that the Congress could necessarily undo this. It's a federal regulation. So you're really, you know, the old, you can't fight city hall. This is, that feels a lot like you can't fight city hall. So the alternatives are what we've discussed is we gotta help schools figure out how to adapt.

0:14:27.3 LS: Well, we also know that schools that are accredited, because by definition, they have to be accredited in order to be eligible for Title IV funding, changing their programs is a little bit like turning a battleship. It does not happen quickly or easily. And not necessarily because of the school, but because of all the hurdles they have to jump. They gotta serve the state. They gotta serve the accrediting agency. They have to have approval through the feds through these changes. So the idea that these schools can suddenly say, well, we were 750 hours, but we'll be 500 by July 1st is not practical. And also, they're small businesses.

0:15:02.0 LS: And any small business, if you told them your product is gonna be one third smaller in four months, go figure out how to make that happen. That's not an easy exercise either. So the hard reality is, and what we've kind of pivoted to as we've discussed it is we have to help, we have to work with schools to work with states to change the requirements, because the federal government has said the states are the gatekeeper and you can't go past it. So, you know, 10 years ago, ABMP was one of the seven national organizations that worked collaboratively and supported the development of ELAP, which is the Entry-Level Analysis Project. And the net result of that was an agreement that a standard for education should be a minimum of 625 hours of education.

0:15:50.8 LS: So part of the move here is to say, we gotta help these states get up to what has been identified as the profession standard at 625. So that means we gotta go to states, which is good job security for Lance Hostetter. Also might add a few gray hairs in the process, but.

0:16:07.6 LH: Those have already started.

0:16:10.0 LS: But that's part of the step here is to say, can we help states, can we help make an effective case that traditionally raising hours and people who have been members of ABMP for a long time will say ABMP's changed their stripes. Well, we were never about changing the requirements just for the sake of changing. There's a valid reason here because we've identified a national standard and we've also identified that this rule will deny access to future students. And it's a consumer protection issue from the perspective of the federal government. But to me, it's a student access issue that we are working on here too. So helping change the environment, regulatory environment will enable people to actually pursue a career in massage because as currently constructed, we're probably gonna have a decent number of schools that say, I can't make this work.

0:17:09.3 LS: I'm not gonna open. I'm not gonna stay open. And also, it's gonna get more expensive for people to go to school. And it's gonna be money out of their own pocket. And they don't have the backing of the federal government in the same way. So it's not, here's a hot take, it's not good.

0:17:26.6 LH: It's not good. I think, you know, looking at increasing regulation depending on where you sit on government involvement in those sorts of things is something not to take lightly. I think that what we've learned though, what you just said about students being the ones impacted here, you might get the question of, well, if you increase hours, how does that help students particularly? And I think the answer is, well, if you leave it below 600 hours, then you're not helping students at all. And if you increase it reasonably from 500 to that 625 range, that's not overly burdensome. That's not overstep. That's a reasonable number to look at. And I think we're starting to see that conversation arise in a handful of states like Colorado and Tennessee, potentially Florida and North Carolina. So folks are taking it seriously.

0:18:18.1 LH: And the thing is, is being led by schools. We're there along the way, helping create the talking points, helping decipher what policy levers needed to be pulled, connecting folks with the correct policymakers to do that. But it's really important to understand that I think schools are the face of this, students are the face of this, not ABMP, because your leaders wanna hear from you. You're their constituents. And I think what I wanna say is I can be a resource. Our team here can be a resource for you. If you're in a 500-hour state and want to talk about what this could look like in your state, we're here to help you through that process.

0:19:00.2 LS: I couldn't have said it better. And I think, you know, what's important for us is that, you know, we've been serving this field for 35 years. I hope we do so for at least that much longer. I may not be here in 35 years, depending on how my diet and exercise goes. But our view is we have a duty to do whatever we can to help benefit the profession. And this is an area where it is important. And we're committed to that on a state-by-state basis to help schools and students give ultimately, you know, we're always focused on what's the benefit for the future massage therapists? What's the value proposition for them? And the status quo is not good enough. And we're gonna work to see what we can do to change that. All right. We have a couple of minutes I wanna talk a little bit about. And you'll get to riff on this a little bit.

0:19:48.6 LS: There's been a development of an interstate compact, which a compact is an agreement among states to allow for portability and reciprocity in regulated environments. And it's come to massage. And we can thank the Department of Defense, as well as the Council of State Governments and leadership from the Federation of State Massage Therapy Boards. They've been the ones working on this. And we think this is a good thing. One of the things that we've been working towards legislatively for the past quarter century is giving massage therapists the ability to practice where they wanna practice with the least amount of burden regulatory restriction. And the compact is a step in that direction. Tell us a little bit about what that would mean or what the prospects look like for that.

0:20:38.2 LH: Well, first, let's think about the massage compact in comparison to something and use a little analogy. Think about when you jump in your car, and you live, I don't know, you live in New Jersey, but you wanna drive across the bridge to New York to go to a show or you do business on the other side. You have a driver's license issued by one state, and you're in another state. And you don't have to get licensed in that state to be driving. That's what we're trying to do with the massage compact is get a handful of states to agree to a common set of standards that allow you to practice legally across border states. So for that example of you live in New Jersey, but you work in New York, you have access to more clientele. You're in an area that is a conglomerate of people where you don't really recognize the state order.

0:21:33.5 LH: You go to where your business is. You go to where your clients are, those sorts of things. And I think if you think about it in terms of like the northeast part of the country, it becomes even more important to think about interstate compacts because it allows you to where your states are smaller and your lines are blurred a little bit or probably makes more sense. The Department of Defense would use the argument that they have the bases stationed all over the country and they ship people to those bases without necessarily saying or caring about what those individual spouses are doing. This allows people to, if you practice massage and your partner is in the military, it allows you to think about, I don't have to find something else to do. I can practice legally my massage therapy business in the state that we're going to.

0:22:23.4 LH: Just a little kind of comparison and what this actually means. The other thing it does is it introduces a common set of standards and it focuses on those things that you kind of referenced that came out of ELAP, the 625 hours for education, the ability to be mobile, elevating the profession in that way. So I think when we're thinking about the compact, it should be that we're not lowering standards here. We're saying they have to at least be this and it is an elevating of the profession.

0:22:55.5 LS: Yeah, it's interesting because one of the things that we talked about when the coalition of organizations first met 10 years ago, there were two things that we wanted to address. And one was some deficits in entry-level education and inconsistency. And the second was portability. ELAP addressed the first one. This is the most concrete step we've made towards portability in the quarter century that I've been working in the massage field. And it also will only probably affect a very small percentage of people. But it doesn't in any way dilute or take away from anybody's qualifications or a state's ability to govern this in their own state. So to me, it's kind of a no-brainer. And when I was asked to participate in a panel discussion about it and I talked with employers and they say, the idea that we have the potential to have people work in multiple states, it could be dramatically helpful in that regard. An example they used was during COVID where some states were shut down. They could have had some of their massage therapists work in a location where it was still available.

0:24:00.0 LS: So to me, it's like, this is good for the profession. It helps us elevate opportunities for people. And it's also a little bit for me, I look at it as this is what professions do. And there has been some noise within the profession that it's not satisfactory. And one of my mantras is, perfect is the enemy of the good. This is a positive step forward. And if you haven't figured that out already, ABMP is squarely behind that compact effort.

0:24:30.3 LH: Absolutely, 100%. You know, to your point about good public policy, sometimes good public policy has to have a start, and then you improve it over time. I think that could absolutely be true with the compact. If you just keep pushing it off and not bringing it forward, not talking about it, not getting a start on it, then it will never be implemented in a perfect form. And there is no perfect form here. There's only striving toward that. And so I think the first step is to get the policy that a host of folks agreed to, and that is built on the premise of ELAP, which is the standard for our profession, is the number one correct step. And then we can look at improvements over time.

0:25:17.4 LS: Especially in massage, where we have 46 or 47 states, and half of them are at 500 hours, and we have a few at 1,000 hours, and the rest are somewhere in between, between 600 and 750. There's no one-size-fits-all solution that's gonna make every single group satisfied. So as you said, public policy, good public policy starts as a starting point, and we go from there. Well, Lance, I think we've pretty much solved all the world's problems. So it's probably time for us to go get some lunch. What do you think? 

0:25:44.8 LH: Let's have some lunch.

0:25:45.3 LS: Thanks so much. You've been listening to the ABMP podcast. If you have any questions, needs, or support, please reach out to us at expectmoreatabmp.com.