NASFAA President Testifies at Gainful Employment Hearing
The Department of Education held its first public meeting on Nov 5, 2010, to hear from interested parties in response to its Notice of Proposed Rulemaking to define Gainful Employment metrics.
The Department hopes to gather further input on gainful employment
before final regulations are issued. Only those who had previously
submitted comments on the NPRM were invited to testify and the
Department prohibited new issues from being brought up during the
meeting. The majority of the comments delivered yesterday focused on
the technical implementation of gainful employment rather than broad
objections to the proposed rules. Hearing each organization's testimony
were representatives from the Department's legal counsel, career policy
staff, and political staff.
NASFAA President Justin Draeger testified
at the meeting and expressed support for the Department's overall
goals, but highlighted some concerns about how the rules could be
"We do not challenge the
concepts behind the two proposed tests outline in the NPRM," Draeger
said. "The year over year increase in student borrowing illustrates one
of our biggest failures in higher education financing: a movement away
from public subsidization of higher education onto the backs of
individual students and parents. Ensuring that certain programs lead to
gainful employment is a step in the right direction. But I believe we
must move forward with an eye towards careful implementation that
avoids any unintended consequences."
Draeger's testimony called
on the Department to use existing measures of workforce placement,
student loan indebtedness, and successful loan repayment to implement
gainful employment rules before trying new, untested methods. A large
portion of Draeger's testimony focused on how preliminary measures that
already exist could be used as filters in determining which programs
adequately prepare students for gainful employment before ultimately
applying repayment and debt-to-income tests.
"Using existing completion,
placement, and cohort default (perhaps with different thresholds) data
as starting points, we can ensure that students are being treated
fairly, that the administrative burden on schools (which is ultimately
passed along to students in some form) is kept to a minimum, and
students are successfully completing their programs, finding work, and
successfully repaying their loans," Draeger said.
Specifically, NASFAA called upon the Department to:
- Allow exemptions for institutions with a low percentage of borrowers or low average indebtedness
- Use existing regulatory requirements for completion
and placement rates on short loan-only training programs. These
programs are already subject to minimal completion and placement rates
that are defined in regulation (CFR 668.8(d) and (e)). Under existing
regulations, these very short certificate programs must have completion
and placement rates of at least 70 percent.
- Examine applying CDRs to individual programs, not
just institutions as a whole, perhaps with different thresholds, to
create a more accurate picture of whether students are taking on
- Include deferments and other forms of repayment that
do not result in an annual decrease in loan principal (e.g.,
income-based repayment) in the repayment calculations
"NASFAA supports efforts to
ensure that students are being prepared for gainful employment and that
debt burdens are kept to an absolute minimum," Draeger concluded.
Additional remarks at
Thursday's meeting were given by organizations including: for-profit
institutions, the United States Student Association (USSA), the Public
Interest Research Group (PIRG), the American Council on Education
(ACE), the Council for Opportunity in Education (COE), and the U.S.
Chamber of Commerce. The meetings will continue today.