NAICU Washington Update

Gainful Employment Reporting Requirements Detailed

May 03, 2011

In an April 20 Dear Colleague letter, the Department of Education provides guidance on its new - and controversial - gainful employment requirement.  The regulations are effective July 1, 2011, and are part of final regulations on new fraud and abuse rules issued last October.

Gainful employment is part of the 14 program integrity areas regulated in Fall 2010. It has especially been a target within in the for-profit sector, which reportedly has spent millions lobbying Congress for its elimination. At this point, only the reporting requirements on gainful employment are final and effective on July 1. The Department is still finalizing regulations on the Title-IV eligibility requirements for gainful employment programs relating to students' success in finding jobs and repaying their student loans.

The Department estimates that over 80 percent of all institutions have programs falling under the gainful employment regulations.  These include certificate programs at public and nonprofit colleges, as well as teacher certificate programs. Degree programs at public and nonprofit colleges are not considered to be gainful employment programs, nor are programs of two years or more in length that are fully transferable to bachelor's degree programs.

Disclosure by Colleges (To begin July 1, 2011)

For prospective students, institutions are required to disclose specific information on gainful employment programs in promotional material and on their websites.  That information includes official job codes, on-time graduation rates for program completers, tuition and fees, cost for books and supplies, the cost of room and board, job placement rates for program completers, and the median loan debt of completers by type of loan.  The disclosures are to be in place no later than July 1.

In coming years the Department will provide median loan data to each institution.  This year, however, colleges must make their own calculation, given that institutions won't be providing gainful employment data to the Department until October 1, 2011 - after disclosures must be made available. Also in the future, the Department will provide a disclosure form for institutions to use in submitting data.  For now, though, colleges must report using their own format.

Reporting by Colleges (First due October 1, 2011)

Reports must include certain information about all students enrolled in gainful employment programs - not just those receiving Title IV aid - raising increased questions about student privacy. The years of enrollment colleges must report on include 2006-07, 2007-08, 2008-09, and 2009-10. For 2006-07, colleges only need to report whatever information they have available, and must provide explanations for those years they don't have data. A preliminary list of data to be reported is available on the Department website. Data will be reported through the existing Enrollment Reporting Process that schools use to report enrollment information to the National Student Loan Data System (NSLDS).

New Programs at Colleges

When adding a new gainful employment program, institutions must notify the Secretary of Education, describing  how they determined that the program meets employment market needs. For new programs starting other than from July 1 to October 1, colleges must notify the Secretary at least 90 days before the first day of class.

After notifying the Department, colleges may begin the new programs without receiving approval, unless the Department requests additional information. Institutions on provisional certification, however, must receive approval before beginning a new gainful employment program.  See the Dear Colleague letter for more details.

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