New GE Proposal Shifts Regulations from Eligibility Provision to Disclosure Requirement for All Programs
Earlier today the U.S. Department of Education provided the Committee 2 – Gainful Employment negotiators with eight updated Issues Papers detailing proposed revisions to the current GE regulations. Among many significant revisions contained in the draft proposals there is none larger than a clear shift away from the regulation being used as a determinate of a limited scope of programs’ eligibility to participate in the Title IV programs, to the use of a blanket disclosure provision requiring all programs eligible to administer Title IV programs funds to provide general information about each program (including outcomes measures by program length, hours, and campus), as well as notices to students and prospective students for each “low-performing” eligible educational program offered by an institution in comparison to the standard.
CSPEN is in the process of thoroughly reviewing the Department’s release and reaching out to colleagues both on the Committee and within and beyond to discuss their assessment in preparation for next week’s second of three negotiating sessions. As soon as the eight Issue Papers are posted on the U.S. Department of Education’s Negotiated Rulemaking for Higher Education 2017-2018 host page and/or correspondingGainful Employment home page, we will send the community a link to the documents for your own review.
Until then, here are a few other aspects of the new proposal based upon our initial review:
The new proposal returns to the use of a single threshold to determine an education programs determination as either acceptable vs. low-performing. The proposed standard reverts back to the prior 8% annual earning rate and 20% discretionary income rate, eliminating the tiered approach of “pass”, “zone”, and “failing” program thresholds contained in the current regulation. The proposal maintains the “either-or” component of the determination, requiring that an institutions program is deemed to be acceptable if it has either a debt-to-earnings annual earning rate equal to or greater than 8% OR a discretionary income rate of equal to or greater than 20%.
Under the new proposal the Secretary would be responsible for calculating D/E rates using the same equation as contained in the current regulations (e.g. same cohort periods, determinations based upon median loan debt, modifications based upon IRS inability matching, et. al.).
However, key aspects of the components used in the calculation have also been changed. For example:
• Loan Debt – The new proposal requires the Secretary to include the amount of title IV loans that the student borrowed (total amount disbursed less any cancellations or adjustments) for enrollment in the program (Federal PLUS Loans made to parents of dependent students, Direct PLUS Loans made to parents of dependent students, and Direct Unsubsidized Loans that were converted from TEACH Grants are not included). But, does not require the inclusion of institutional loan debt, private loan debt, tuition and fees and books and supplies unless the Secretary first publishes notice in the Federal Register of the election to require such inclusion along with the manner in which institutions must report such information.
• Loan Amortization – The new proposal would amortize the median loan debt over a 15-year repayment period, not a tiered system based upon the length of the program.
• Interest Rates – The new proposal would use the annual statutory interest rate that were in effect on the last year of the cohort period, as opposed to the average of the interest rates over the cohort period.
Notification of Low-Performing Programs
For any year in which an educational program is determined by the Secretary to be low performing under the D/E rates measure, the institution must provide the following notice to all current and prospective students, to the extent practicable in alternative languages, using modified proposals on contact with students, the timelines, and posting of the notification on College Navigator, College Scorecard or successor sites or other Federal outlets). The new proposal explicitly states that the notice shall read:
“This program has not met standards established by the U.S. Department of Education. The Department based these standards on the amounts students borrow for enrollment in this program and the reported earnings that were reported to the Internal Revenue Service. Similar programs offered at other institutions may have better outcomes under this measure. Please note, however, that this program measure could be affected if a significant number of students who completed our program graduates did not report all of their income, such as tip income, or were self-employed and had business expenses that reduced the earnings being reported (emphasis added).”
The new proposal would require institution’s to disclose information, as determined by the Secretary, about each of its programs to enrolled and prospective students. The new proposal maintains the requirement that the Disclosure Template must be provided to all prospective students when the program is presented on websites, in promotional materials, etc. The new proposal makes it clear that this information must provide separate information by program length and location.
This information the new proposal states may be included in the Disclosure Template, but is not limited to, subject to final determination and publication of the requirements by the Secretary in the Federal Register, include:
(1) The primary occupations (by name and SOC code) that the program prepares students to enter, along with links to occupational profiles on O*NET (www.onetonline.org) or its successor site.
(2) The program’s completion rates for full-time and less-than-full-time students and the program's withdrawal rates.
(3) The length of the program in calendar time (i.e., weeks, months, years).
(4) The number of clock or credit hours or equivalent, as applicable, in the program.
(5) The total number of individuals enrolled in the program during the most recently completed award year.
(6) The loan repayment rate for any one or all of the following groups of students who entered repayment on title IV loans during the two-year cohort period, to be calculated using a method specified by the Secretary in a notice published in the Federal Register:
(i) All students who enrolled in the program.
(ii) Students who completed the program.
(iii) Students who withdrew from the program.
(7) The total cost of tuition and fees, and the total cost of books, supplies, and equipment, that a student would incur for completing the program within the length of the program.
(8) The placement rate for the program, if the institution is required by its accrediting agency or State to calculate a placement rate either for the program or the institution, or both, using the required methodology of that accrediting agency or State.
(9) Of the individuals enrolled in the program during the most recently completed award year, the percentage who received a title IV loan or a private loan for enrollment in the program.
(10) The median loan debt for any one or all of the following groups:
(i) Those students who completed the program during the most recently completed award year.
(ii) Those students who withdrew from the program during the most recently completed award year.
(iii) All of the students described in paragraphs (a)(10)(i) and (ii) of this section.
(11) The mean or median earnings of students to be calculated using a method specified by the Secretary in a notice published in the Federal Register
(12) As calculated by the Secretary under §668.404, the most recent annual earnings rate.
(13)(i) Whether the program does or does not satisfy--
(A) The applicable educational prerequisites for professional licensure or certification in each State within the institution's MSA; and
(B) The applicable educational prerequisites for professional licensure or certification in any other State for which the institution has made a determination regarding such requirements.
(ii) For any States not described in paragraph (a)(13)(i) of this section, a statement that the institution has not made a determination with respect to the licensure or certification requirements of those States.
(14) Whether the program is programmatically accredited and the name of the accrediting agency.
(15) A link to the U.S. Department of Education's College Navigator website or its successor site, or other similar Federal resource.
(16) For programs preparing students for fields requiring licensure, a URL linking to any web page containing the State’s mandatory qualifications for licensure.
(17) A link to the institution’s page on the U.S. Department of Education’s College Scorecard or its successor site, or other similar Federal resource.
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