NAICU Washington Update

Education Department Issues New Gainful Employment NPRM

April 11, 2014

Building on its prior regulatory attempt and trying to avoid future judicial challenges, the Education Department published a Notice of Proposed Rule-Making (NPRM) on March 25 to once again amend the Gainful Employment rules. The regulatory language takes up slightly more than 20 pages (16504-16525) in the Federal Register.

In the new regulations, the Education Department establishes a structure for approving and overseeing eligibility of gainful employment programs and to provide program transparency to students. The Education Department also proposes to use debt-to-earning figures, similar to those in its former regulations, and program level cohort default rates to assess institutional eligibility. It has added a new certification requirement for all existing and new gainful employment programs. Presidents will be required to note in the institution’s program participation agreement that the gainful employment programs are accredited and meet state and federal occupational licensing requirements in the standard metropolitan area in which the college is located.

The proposal substantially expands the list of disclosures that must be provided to students and prospective students. Prospective students include not only students who have contacted the college, but students the college contacted directly, or indirectly, through means such as advertising.

Also adding complexity, and perhaps confusion, is the variety of time periods during which various items are calculated and the different sets of students for which information must be reported to the Education Department.

The complex document seems to be unsatisfactory to many groups, from for-profit institution leaders who see it as over-kill to student advocacy groups who view it as not strong enough. This NPRM is a challenging piece from the Department and NAICU staff will continue to digest the regulations and provide further details in the near future.

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