Transcript GainfulEmploymentPar..
NYSFAAA 2013
AGENDA
What is GE all about?
What WERE the final rules?
What is currently in place?
What’s next?
What is GE all about?
What is GE all about?
It is about loan debt but…
What is GE all about?
The Higher Education Act of 1965 (HEA) was legislation signed into law on November 8, 1965 The law was intended to strengthen the educational
resources of colleges and universities and to provide financial assistance for students in postsecondary and higher education.
The Higher Education Act of 1965 was reauthorized in 1968, 1971, 1972, 1976, 1980, 1986, 1992, 1998, and 2008. Current authorization for the programs in the Higher Education Act expires at the end of 2013.
What is GE all about?
So what???
What is GE all about?
The Higher Education Act of 1965 requires for-profit colleges to provide “an eligible program of training to prepare students for gainful employment in a recognized occupation” but does not define gainful employment.
As part of the Program Integrity Regulations of 2010 the department has defined expectations for Gainful Employment by creating metric/outcomes which, if not obtained, would lead to program level loss of TIV.
Gainful Employment Time Line
Notices of Proposed Rulemaking published 6/18/10 & 7/26/10 Two sets of Final Rules published on 10/29/10 with effective date of 7/01/11 Program Integrity; Gainful Employment Reporting and Disclosures Gainful Employment – New Programs One set of Final Rules published on 06/13/11 Performance metrics
Gainful Employment Time Line
On June 30, 2012, the U.S. District Court for the District of Columbia issued a decision that vacated most of the gainful employment regulations The department pursued a reversal of this ruling – it was denied.
A Bi-partisan groups calls for Reauthorization to include GE regs but it should be for all sectors.
Gainful Employment Time Line
On September 3, 2013 the department released Draft Rules for the negotiators On September 9, 2013 the negotiators start the process.
Summary of Negotiated Rule Making Process
Summary of Negotiated Rule Making Process
Guideline for negotiations are published Negotiations begin Generally 3 sets of 3 days (this time 2 sets of 3 days) Negotiators are chosen by the department from each sector There are federal negotiators as well If everyone (school sectors and FSA) agree, the proposed rule will be published as agreed upon.
If agreement is not reached, then the department can publish proposed rules as they please
Summary of Negotiated Rule Making Process
The department publishes proposed rules There is a comment period – usually 60 days In the final rules package the department must respond to all comments and questions received during the comment period. READ THE PREAMBLE Final rules that are published before November 1 st go into effect July 1 st . can If not published by November 1 st then regs CANNOT GO INTO EFFECT until the following July 1 st .
Schools/Programs Impacted by the Current Gainful Employment regulations
All programs at for-profit schools Any program at a public or not-for-profit school that is not A program leading to degree A transfer program of at least two years
Gainful Employment Annual Submission
VACATED
Institutions must annually submit information on students enrolled in programs leading to gainful employment in a recognized occupation
•
Gainful Employment Disclosures
NOT VACATED
Disclosures must be in promotional materials made available to prospective students AND on its website • Program home page website Information simple and meaningful Contain direct link to any other webpage with general, academic or admission information about the program Information in an open format that can be retrieved, downloaded, indexed, and searched
Gainful Employment Disclosures
NOT VACATED
Institution is required to disclose: 1.) Occupations (by name and SOC codes) its programs prepare students to enter Links to occupational profiles on O*NET 2.) Costs – tuition/fees, room/board and books and supplies May include additional costs
Gainful Employment Disclosures
NOT VACATED
Institution is required to disclose: 3.) On-time completion rate for each program 4.) Placement rate for students completing each program
Gainful Employment Disclosures
NOT VACATED
Institution is required to disclose: 5.) Median loan debt incurred by students as provided by ED Identified separately as Title IV loan debt, private educational loan debt and debt from institutional finance plans Institutional finance plan - amount student obligated to pay at completion of program
Gainful Employment New Programs VACATED
Institutions must notify ED at least 90 days before the first day of class when it intends to offer a new educational program that leads to gainful employment in a recognized occupation
Metric/Performance Tests VACATED
Repayment Rate - is a percentage of the Title IV loan amounts that a GE Program’s former students are repaying Debt to Income Ratio - For the GE Program’s completers, the median educational loan annual repayment amount as a percentage of the average (mean or median) completers’ income Two measures o Annual and Discretionary
What’s in the Draft Regs?
What’s in the Draft Regs?
The proposed draft rule reflects significant changes from the final rule that was published in 2011, and then largely vacated in a federal District Court ruling in 2012.
Would seem to expand the rule’s scope and put many more programs at risk
What’s in the Draft Regs?
Elimination of one of three debt measures (the Loan Repayment Rate); Establishment of new thresholds for the two surviving rates (the Debt to Earnings Rates) based on a measurement period that could be as short as two years (rather than the three-year minimum under the prior rule);
What’s in the Draft Regs?
Creation of separate non-contiguous scores for passing and failing, with a new “zone” status for educational programs that neither pass nor fail; Change in the definition of covered programs by reducing the minimum number of completers. This change alone is calculated to roughly double the number of educational programs subject to this rule,
What’s in the Draft Regs?
Creation of a new definition of covered students to exclude all data for students who did not receive Title IV federal student aid funding in the form of a grant or loan, while continuing to include private and institutional loan data for students who did receive a Title IV loan or grant; Establishment of new standards for passing and failing scores that, according to ED’s estimate, would render approximately 9% of all programs ineligible and approximately 12% of all programs in “the zone;”
What’s in the Draft Regs?
For those schools that fail the Debt to Earnings Rates in a single year, imposition of enrollment caps. The draft rule suggests that ED intends to put the GE Rule into effect immediately after the expected July 1, 2015 effective date.
What’s in the Draft Regs?
ED would require institutions to submit their first data reports by July 31, 2015. The first set of GE rates would be published in final form for the 2014-15 award year, based on student information for the 2010-11 and 2011-12 award years. These rates would incorporate “the most currently available” earnings data for these students.
While the first rates might not be published for several years, most of the data used to calculate those rates, especially the data on educational debt, seems to be fixed at this time.
What’s in the Draft Regs?
The draft rule suggests that ED intends to put the GE Rule into effect immediately after the expected July 1, 2015 effective date.
ED would require institutions to submit their first data reports by July 31, 2015. The first set of GE rates would be published in final form for the 2014-15 award year, based on student information for the 2010-11 and 2011 12 award years.
What’s in the Draft Regs?
If ED is able to follow the timeline as suggested in the proposed draft rule, it is quite possible that the first set of GE rates would be issued in draft form in early calendar year 2016 and published in final form later in that year. As a result, institutions with failing programs would be subject to enrollment caps and be required to issue student warnings in late 2016
What’s in the Draft Regs?
Based on the shorter measurement period, could be subject to loss of eligibility in 2017. These time frames are of course, at this point, subject to many variables – certainly including what will actually happen in the pending Neg Reg process.
What’s in the Draft Regs?
Loss of Eligibility, Mandatory Conditions and the Zone
Rather than a single standard to measure passing and failing, as under the prior rule, the new draft rule would set one standard for passing and another for failing, with a “zone” status for programs that are in between.
What’s in the Draft Regs?
Loss of Eligibility
While the prior rule required a program to fail the debt measures in three out of four years, the draft GE Rule would shorten this period to two out of three years.
A program that fails both of the D/E Rates for two consecutive years or two out of any three consecutive years would be found ineligible for continued Title IV funding, and that period of ineligibility would extend for at least three years.
What’s in the Draft Regs?
Loss of Eligibility
Extended status in the zone can also lead to a loss of eligibility. If a program is in the zone for four consecutive years, because it cannot reach a passing rate under either the Debt to Annual Earnings or Debt to Discretionary Earnings Rates in any of those four years, it too would lose eligibility.
What’s in the Draft Regs?
Mandatory Conditions for “Failing Programs”
If a program fails both of the D/E Rates in a single year (due to a Debt to Annual Earning Rate above 12% and a Debt to Discretionary Earnings Rate above 30%), the institution would be required to meet two difficult conditions.
What’s in the Draft Regs?
Mandatory Conditions for “Failing Programs”
First, it would have to provide current and prospective students with written warnings, in language prescribed by the Secretary, that the students may not be able to obtain Title IV funding to complete their program at the institution and describing the options available to the student, including transferring to another program or another institution. Second, such a program would be subject to an immediate enrollment cap that would limit enrollments of Title IV students in the next 12 months to the population of such students in the prior 12 months. Note, however, that this would not cap non-
Title IV enrollments.
What’s in the Draft Regs?
The Zone
The draft rule would also create a “zone” for programs that are neither passing nor failing. A program that does not pass either of the D/E Rates but has a Debt to Annual Earnings Rate between 8% and 12% or a Debt to Discretionary Earnings Rate between 20% and 30% would fall into the zone. This status would not trigger any conditions such as warnings or enrollment caps. The duration of the zone status would be limited,
What’s in the Draft Regs?
Other Provisions
Annual Data Reporting: Institutions would be obligated to file annual reports with detailed information about their students enrolled in GE programs, with the first such report due on July 31, 2015. Disclosures: The draft rule proposes expanded disclosure requirements,.
What’s in the Draft Regs?
Other Provisions
Completion Rates: ED indicates that it will calculate, and require disclosure of, two completion rates – the first for students who complete a program within 100% of normal time and the second for students who complete within 150% of normal time. New Programs: The Department did not provide any proposed draft language on the procedures for institutions to apply to have new gainful employment programs – HOWEVER….
What are the Negotiators Talking About?
Proprietary sector negotiators are pushing for more sensible measures while non-proprietary sector members are pushing for more stringent measures One negotiator wants schools to submit letters of credit to the department when in the zone and/or failing.
One negotiator wants to empower the department to decide what programs a college can continue to run based on economic settings – even if the program is not failing.
What are the Negotiators Talking About?
Breaking out into separate committees: Repayment rates--led by Jack Warner from the South Dakota Board of Regents Placement rates--led by Della Justice from the Kentucky Attorney General's office Transition periods/opportunities to improve--led by Belle Wheelan from SACS and Marc Jerome from Monroe College Program level cohort default rates--led by Brian Jones from Strayer University Upfront requirements--led by Barmak Nassirian from AASCU Student consequences--led by Eileen Connor from the New York Legal Assistance Group
What are the Negotiators Talking About?
Next 3 day session