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Regulatory Bulletin on Extended Deadline for GE Disclosures and Warnings

July 21, 2017
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On Again, Off Again, and On Again?… Gainful Employment Disclosure Requirements

In recent weeks and months, many institutions have worked hard to determine the best way to handle new requirements related to Gainful Employment (GE) program disclosures and, what was anticipated to be, warnings to current and prospective students.  Much angst was experienced as institutions explored what the potential ramifications of such disclosures and warnings would be on admissions and current enrollment at institutions.  While all of that effort and thought was not for naught, institutions do have opportunity to take another long breath of fresh air.

And, I Start the New Disclosures and Warnings, When?

Institutions that have GE programs that did not yield a passing rate for the debt-to-earnings (D/E) rates released by the U.S. Department of Education (ED) back in January of this year were required to begin new disclosures and warnings this year if the GE program could become ineligible based on its final D/E rates calculated for the next award year.  [If a GE program failed the GE D/E metrics, it had the opportunity to file an alternate earnings appeal.  (See Dear Colleague Letter GEN-15-12.)]  In addition, if an institution’s GE program had potential for becoming ineligible for Title IV participation, it would have to begin providing warnings to current and prospective students regarding the program’s potential ineligibility for Federal Student Aid.  This was what amplified the seriousness of the GE D/E rates when an institution’s program(s) would not pass the scrutiny of the metrics.  The impact upon recruitment and retention could very well be significant.

Fortunately, institutions that would have been required to begin making the disclosures and warnings to prospective and current students, by July 1, 2017, have received a postponement.  This is following an earlier deferral of the requirement from the original date of April 3, 2017, to July 1, 2017.  Now, thanks to ED’s announcement on June 30, 2017, institutions have until July 1, 2018, to comply with the disclosure requirements of 34 CFR 668.412(d) and (e).

ED states that such a rescheduling of the start of the required GE disclosure information until next year on July 1, 2018, will allow the Department opportunity to “evaluate the utility”[1] of the provisions of the applicable section of the regulations.  The scope of this postponement extends to the requirement to include the disclosure template, or a link to it, in the program’s promotional materials and directly to prospective students.  However, consistent with the requirement of 34 CFR 668.412 (c), institutions are still required to have provided their updated GE Disclosure Template (GEDT), or a link to it, on the institution’s GE program Web pages by July 1, 2017.  So, the net effect, currently, is that while the proactive dissemination of the updated GEDT information to current and prospective students is delayed until, July 1, 2018, the institution still has to have the GEDT updated on its Web site by July 1, 2017.

Likewise, institutions that did submit, or were considering the submission of, an alternate earnings appeal,[2] also were granted additional time to do so.  Similar to how the new GE Disclosure and Warnings requirements that were to be mandatory by July 1, 2017, had the requirement delayed instead to July 1, 2018, institutions that should have had their alternate earnings appeal submitted by July 1, 2017, now have until July 1, 2018, to do so.  This provides additional opportunity for those who had considered submitting an alternate earnings appeal, but did not.

To remind institutions of where to locate the Gainful Employment Disclosure Template and the related, useful Quick Start Guide, ED again provided the link to the GEDT in the June 30, 2017, Gainful Employment Electronic Announcement #106 – “Extension of Compliance Date for Certain Disclosure Requirements and Alternate Earnings Appeals.”  The GEDT and Quick Start Guide are available at: https://www2.ed.gov/policy/highered/reg/hearulemaking/2009/negreg-summerfall.html

Another Look at Gainful Employment

A further purpose for ED’s delayed implementation of the disclosure requirements of 34 CFR 668.412 (d) and (e) was highlighted in the Electronic Announcement.  ED pointed out that it plans to further review the requirements of these specific disclosures through its broader review of the GE regulations through new negotiated rulemaking.  The intent to begin negotiated rulemaking on GE issues was announced in the June 16, 2017, Federal Register.

So, the postsecondary education community can expect more detailed discussion of the GE regulations in the months ahead as the GE Negotiated Rulemaking Committee begins its work.  (The “negotiated rulemaking” process is referred to by some, although not technically correct, as the “Neg Reg” process.  Neg Reg is a historic abbreviation for “negotiated regulation,” used as shorthand to refer to the rulemaking process, rather than the more accurate terminology of “negotiated rulemaking.”)

Considerations from the June 30, 2017 Electronic Announcement

  1. Institutions must ensure that their GE Disclosure Template was updated by July 1, 2017. If not yet done, take immediate steps to do so now since ED specified the date, with no extensions or delays, in the March 6, 2017,[3] and the June 30, 2017, Electronic Announcements.
  2. In light of the extension of time to submit an appeal, if your institution has GE programs that “failed” the GE metrics based upon current requirements, or that were in the “zone,[4]” or that likely will be, you may wish to consider filing an alternate earnings appeal if you have not already done so. (See GE Electronic Announcement #95.)  Any such earnings appeals must be done in compliance with the guidance given in ED’s Standards for Conducting the Recent Graduates Employment and Earnings Survey (REGEES).  The Standards are available in the “Resources” section of the Gainful Employment Information Page on IFAP.
  3. Begin compiling points of recommendation, with supporting documentation, to present to the GE Neg Reg committee when it begins its work. While generic expressions of concern about the cumbersomeness or equity of the GE regulations may be submitted, more successful outcomes will be likely if supporting data and detailed information are provided.
  4. In the event no changes are successfully made to the current GE regulations as a result of Neg Reg, ensure you have done a thorough review of your programs to ensure they are ones that meet business needs in the community. Also, conduct a review of ways to:
    • enhance operational efficiencies and reduce costs,
    • increase efforts at promoting financial literacy and responsible borrowing among students,
    • work with significant local employers who hire the institution’s graduates to enhance post completion earnings potential,
    • reduce programs to the length required to meet the minimum state licensing requirements, and
    • evaluate if a competency-based education (CBE) program, if allowed by your state and accrediting agency.

Although institutions with certain GE programs that were failing or in the zone may be breathing a sigh of relief due to this respite from the immediate implementation of the more detailed and prescriptive information disclosures and warnings to prospective and enrolled students, it does not mean institutions should not be actively enhancing their programs’ viability, enhancing student success measures, and so on.  This additional year also allows time for better preparation, and action to give input to the new Neg Reg process related to GE.  Institutions are encouraged to use the extra time wisely to increase their successfulness!

Should you have any additional questions regarding this topic, please feel free to contact Customer Service through the Client Solution Center.

[1] Gainful Employment Electronic Announcement #106 – Extension of Compliance Date for Certain Disclosure Requirements and Alternate Earnings Appeals, Federal Student Aid, U.S. Department of Education, June 30, 2017.

[2] Gainful Employment Electronic Announcement #95, U.S. Department of Education, October 26, 2016.

[3] Gainful Employment Electronic Announcement #105, U.S. Department of Education, March 6, 2017

[4] An institution’s GE program is placed in the “zone” when the program did not fail ED’s GE metrics, but did not pass with an 8% or lower Debt-to-Earnings Rate and have a 20% or lower Debt-to-Income Rate.  See the Gainful Employment Operations Manual, posted on IFAP on November 10, 2015.  Select the “Explanation of the Debt Measures in PDF Format” attachment, and review pages 29-30.

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This material is presented for informational and educational purposes only and should not be considered to be giving legal advice.

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