NAICU Washington Update

Gainful Employment: Lots of Moving Parts

October 07, 2011

There have been developments on a number of fronts in recent weeks on the Department of Education's confusing gainful-employment regulations.

Please Report That You Have Nothing to Report

New information emerged last week on these ever-confusing regulations - the subject of 25 electronic notices issued to clarify or expand on Department of Education information provided so far.  According to Department officials, even colleges without gainful employment programs should have told the Department of Education  by October 1 that the rules didn't apply to them. Fortunately for the many colleges that didn't report on the programs they don't have, the Department said they won't start to review what colleges have or haven't reported until after the November 15 deadline extension explained below.

The head-scratching rationale offered for the edict was that if an institution didn't report at all, the Department would have no way to distinguish between institutions that had gainful employment programs, but had not reported them, from those institutions that simply don't have such programs.  This way the Department will know not to follow up with those in latter group.

Supposedly, institutions were expected to discern this requirement through the Department's "Gainful Employment Electronic Announcement #18 - Submitting An Explanation of Mission/Incomplete Gainful Employment Data," which states that if an institution can't provide the required gainful employment information, it had to provide an explanation.  One acceptable explanation is "The institution has no GE Programs."  The announcement includes directions for how to submit this "missing or incomplete" information.

September 23 Letter to Presidents

In addition to rules for reporting nonexisting programs, the Department's Chief Operating Officer sent a letter September 23 to presidents of colleges participating in Title IV programs, reminding them that the gainful employment regulations went into effect on July 1.

In the letter, COO James W. Runcie says that institutions are required to report gainful-employment information to the department for award years 2006-2007 through 2010-2011 by November 15 (an extension from the original deadline of October 1 for submitting data from earlier years).  Expressing concern for the work involved, Runcie acknowledged that the information may have to be gathered from various campus offices.

The letter also says that, effective September 26, these data may be reported via the National Student Loan Data System.  Links to an updated NSLDS user guide and other information have been provided in recent announcements.  Finally, the letter points presidents toward a new webinar on gainful-employment requirements to be offered on October 13.

(Conspicuously missing from the letter, however, is any mention of the need for Title IV institutions to notify the Department if they don't have gainful employment programs.)

Relief in Sight?

On another front, the Department may limit one of its more onerous gainful-employment rules to fewer programs in the future. Currently, institutions must notify the Department if they intend to offer a new gainful employment program.  On September 27, however, the Department published in the Federal Register a notice requesting comments on a proposed regulation that would limit the notification requirement to failing programs only.

According to the Department, once the "debt management" procedures are in place that will enable screening for failing institutions, those offering new programs will only have to notify the Department if the new programs are ". . . the same as, or substantially similar to, failing programs that the institution voluntarily discontinued or programs that became ineligible under the debt measures for gainful employment programs . . ."  Comments on this notice of proposed rule-making are due by November 14.  If adopted, the change could eliminate gainful-employment reporting requirements for most private, non-profit colleges.

However, relief won't be available immediately.  Colleges will have to live with the current more broadly applicable notification requirement for now because the gainful-employment debt management regulations, published last summer, aren't effective until July 1, 2013.

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