FAME’s Response: Program Integrity: Gainful Employment; Proposed Rule (dated March 25, 2014)

June 2, 2014

May 27, 2014


Ms. Ashley Higgins
U.S. Department of Education
1990 K Street, NW
Room 8037
Washington, DC20006-8502


DOCKET ID:  ED-2014-OPE-0039

34 CFR Parts 600 and 668

Program Integrity:  Gainful Employment; Proposed Rule (dated March 25, 2014)


Dear Ms. Higgins:

On behalf of FAME, and the hundreds of institutions we serve, and the thousands of students they serve, we submit the following items for the Department of Education’s consideration in regard to the above identified Notice of Proposed Rules (NPRM) published in the Federal Register on March 25, 2014.

FAME is dedicated to meeting the diverse needs of postsecondary educational institutions. From its inception in September of 1978, FAME has provided service excellence to institutions participating in federal financial aid programs and for those seeking quality, affordable Student Information Systems.  FAME has a long history in providing comprehensive, high quality, cost effective Student Information Systems and efficient, accurate financial aid processing and management of Federal Title IV funding for colleges and private career schools.

As we have read the NPRM, several areas of concern, question, or suggestion have come to mind.  We delineate these below.

Summary of Proposed Regulations – page 16433

Before getting into the specific sections of the proposed regulations, we note in the “Summary of Proposed Regulations”, on page 16433, the first black bulleted paragraph, the next to last line provides confusing information.  It states that schools with GE programs with potential for becoming ineligible in the succeeding year must provide students and prospective students a written warning of the “potential loss of ineligibility”.  While the context of the paragraph would seem to indicate that the actual wording should be “potential loss of eligibility”, that is not what is stated.  Certainly, many schools thinking they may be at risk of loss of eligibility would be happy to learn of their loss of “ineligibility” instead.  It would be helpful to have clarification and/or correction on this matter.

Significant Proposed Regulations

§668.401  Scope and Purpose

On page 16436 of the NPRM, the first sentence that begins in the top of the second column states that ED’s proposals are to encourage institutions to start or continue to take effective action to “…increase earnings prospects for students….”  Perhaps it was missed, but in what way are ED’s proposals going to help schools increase earnings for students?  We do not see how any of the proposals will result in employers paying students more money.  How does this set of proposals offer prospects for increased earnings for students?

In the “Overview of Accountability and Transparency Frameworks” discussion on page 16438, the last paragraph in the left-hand column states that “We believe that our proposed definition (of ‘student’) is better aligned with our goals of evaluating a GE program’s performance for the purpose of continuing eligibility for title IV, HEA program funds.”  It is curious to think that limiting the definition of “student” to only include title IV recipients allows for a better ability to prove or demonstrate a program’s performance.  If anything, by orchestrating such a definition to exclude other program participants, it would seem to adversely, or at least, inappropriately, skew the actual program performance as a significant portion of the program’s students are excluded.  And, for regulatory and other Department of Education (ED) definition consistency and simplification, it would seem best not to exclude non-title IV recipients.  For example how many different definitions of a student must a school maintain, e.g., this GE definition, IPEDS definition, State definitions, etc.?  The next sentence in the paragraph referenced ED’s goal to provide “students and prospective students who are eligible for title IV, HEA program funds with relevant information that will help them in considering where to invest….”  By excluding non-title IV recipients from the definition of “students,” is ED trying to create a “class system” of students?  Information about a program’s success or performance should be applicable to all students on an equal basis.  Is that not what the HEA is purported to be doing, i.e., providing more “equal” opportunities for higher education?  By saying some students are not “students”, by regulation, seems to go counter to providing all students equal information and treatment about a program’s overall performance for all students.  It appears to be creating different classes of students.

In the next paragraph on the same page (16438), the discussion states that ED agrees with negotiators that the definition of “prospective student” should capture common circumstances in which institutions first contact individuals about enrollment in a GE program.  This may be fine.  However, the actual proposed definition of “Prospective student” in §668.402 (page 16506) states that such a person includes one “who has been contacted directly by the institution or indirectly through advertising about enrolling in a GE program.”  As this proposed definition is currently worded, “indirectly through advertising” could mean everyone in the world that has access to the Web if the school has a Web-based advertising plan.  How will a school be able to consider every potential person in the world that has been contacted “indirectly through advertising” as a “prospective student”?  It would seem that this definition would need further clarification from a practical standpoint.

§668.401  Scope and Purpose

This proposal clearly states that the regulation would apply only to institutions that prepare students for gainful employment in a recognized occupation.  While it is understood what that means, it seems to be very limited in its scope.  If the overall intent is to ensure students are trained in a profession and are able to be gainfully employed relative to the amount of indebtedness upon completion of the program, then why limit the scope of the regulation to only non-degree programs at public and private non-profit institutions.  Is there documentation to substantiate that there is no greater need for the monitoring of students’ debt levels and earnings upon completion of degree programs at such institutions?  If this proposal is adequate for mainly for-profit institutions, why is it not also appropriate for degree programs at public and private non-profit institutions?  How many news articles have been written about graduating students from traditional colleges not finding employment or being under-employed?  Have their employment situations and earnings, or lack thereof, been compared to their debt levels upon graduation to document there is no need for accountability and greater transparency?  It would seem that equal methods of assessment to ensure quality and integrity should be applicable to all components of higher education.

§668.402  Definitions

For the most part, we are supportive of the proposed definitions, other than as discussed above.  However, we would like to expand the discussion on the proposed definition of “student” beyond what we referenced earlier.  The current proposed definition excludes all non-title IV recipients.  It would seem, as stated earlier, that a more realistic picture of a program would be gained if students that are contained in the National Student Loan Data System (NSLDS) were also included in the definition of “student”.  It is understood that the courts have spoken about the lack of authority to gather information on students who do not apply for or receive title IV aid.  However, if a student is in the NSLDS database, either they are a current or former recipient, or at a minimum, an applicant for title IV program assistance.  As such, including these students would broaden the actual universe of program participants to have it more closely resemble the reality of students in the program.  This should be useful in providing more accurate information to prospective students, current students, the public, etc.

§668.403  Gainful Employment Framework

(c) Outcomes of GE measures

We would appreciate ED providing further statistical justification for the proposed percentages being utilized.  Specifically, what documented data is being used to substantiate the annual earnings rate requirement being less than or equal to eight percent?

§668.404  Calculating D/E Rates

(b)  Annual loan payment.

We are supportive of ED’s proposal to utilize an annual interest rate that is based upon the average of the statutorily determined annual interest rate on the Federal Direct Unsubsidized Loans made during the six-year period prior to the end of the applicable cohort period.  Also, amortizing the median loan debt over a progressive period based upon the level of the program is favorable as well.

(d) Loan debt.

We support the proposal to track debt annually based upon the highest credentialed program completed.

In closing, we anticipate final rules being published that enhance service to students and simplify and clarify operational and administrative functions necessary to meet the requirements of current law.  We look forward to being able to continue to work together with the Department to strengthen educational, and ultimately, career opportunities for students across the United States.


D. Sherwin Hibbets
Director of Regulatory Affairs

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