U.S. Department of Education Looks to Rewrite Gainful Employment Regulations
Changes could require more programs to report student debt and earnings data while also limiting sanctions for underperforming programs.
Gainful employment (GE) regulations establish federal Title IV eligibility criteria for certificate and nondegree programs, as well as programs at proprietary and vocational postsecondary institutions that prepare students for gainful employment in a recognized occupation. Under current rules put in place by the Obama administration, the U.S. Department of Education (ED) requires institutions to submit loan and earnings data for students participating in such programs. The goal is to identify programs where students are taking on overly burdensome levels of debt and ensure institutions are good stewards of federal Title IV funds. Failure to meet standards for the debt-to-earnings (D/E) metric can lead to sanctions, including program closure or loss of Title IV eligibility.
Postsecondary institutions critical of the rule often express concern about unintended administrative burden and costs, and the formula to determine eligibility. However, no community college programs are currently “failing” GE benchmarks based on the latest 2015 debt-to-earnings rates and are therefore not at risk of sanctions.
Through the process of negotiated rulemaking, ED is looking to make changes to existing rules with the stated primary goals to 1) simplify the regulation; and 2) extend GE data reporting requirements to all institutions and programs. During three rounds of negotiated rulemaking from December 2017 through March 2018, negotiators—including representatives from community colleges—reviewed several potential changes to the accountability and transparency framework for GE programs including:
1) Expanding the scope of GE to apply to all undergraduate postsecondary certificate and degree programs, notably liberal arts associate and bachelor’s degrees not subject to current rules.
2) Adding a repayment rate accountability metric, in addition to debt-to-earnings, as an alternative measure of student loan burden.
3) Revising GE reporting requirements, such as by aligning requirements with data available through the National Student Loan Data System (NSLDS) and reducing the minimum cohort size for reporting from 30 students to 10.
4) Limiting the strength of sanctions by changing loss of Title IV eligibility from an automatic consequence to a potential consequence alongside other options, such as limiting program expansion or conducting a full program review for improvement.
GE negotiators did not reach consensus on proposed changes, therefore ED is writing a proposed rule expected to be released by early summer and to be followed by a 90-day public comment period. GE regulations may also be impacted by Congress’s expected reauthorization of the Higher Education Act (HEA).
Allison Beer is senior policy analyst for the Association of Community College Trustees. She can be reached at email@example.com.
 United States Department of Education, Office of Federal Student Aid. Debt-to-Earnings Rate Data, 2015 Final Rates. Retrieved from https://studentaid.ed.gov/sa/about/data-center/school/ge