NAICU Washington Update

Department of Education Makes Several Moves on Important Issues

June 22, 2015

In a series of June announcements, the Department of Education provided additional information and updates on gainful employment, the loan repayment campaign, and enforcement of the statutory prohibition on payment of incentive compensation by postsecondary institutions. A summary of each of the announcements follows:

  1. Gainful Employment

    The Department issued Gainful Employment (GE) electronic announcement #54 reminding institutions of two upcoming requirements for gainful employment programs. First, institutions must ensure that the Department has an accurate listing of their Title IV-eligible GE programs. Second, institutions must certify the accreditation of the GE programs, either independently, or as part of the institution’s accreditation. Institutions must also certify that their GE programs provide the educational prerequisites needed for students to take the professional licensure or certification exams of their state.

    Certification must be completed by December 31, 2015, unless the institution submitted an E-App and executed a new Program Participation Agreement between July 1, 2015 and December 31, 2015. The announcement also provides information about the requirements for new GE programs.
  2. Loan Repayment Campaign

    The Department announced its spring student loan repayment campaign to educate borrowers about affordable student loan repayment options. Institutions seeking to participate in the campaign, which runs through June 30, or just wanting to obtain helpful information about repayment can go to
  3. Incentive Compensation Enforcement

    According to Under Secretary Ted Mitchell, the Department of Education will, as part of its enforcement activities, recover Department losses caused by violation of the incentive compensation prohibition. This changes the Department’s approach in effect since 2002. The Deputy Secretary issued a memo that year noting that a violation of the incentive compensation prohibition (Sec. 487(a)(20) did not result in monetary loss to the Department. This month’s reversal in policy means that an institution violating the prohibition is not entitled to receive the Title IV funds for those students who were recruited through incentive compensation processes. An institution could also be liable for a fine and subject to other administration action, including termination of the institution’s eligibility to participate in Title IV programs.

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