2015 Gainful Employment


2015 gainful employment regulations created a certification process by which an institution would establish a GE program's eligibility for Title IV by certifying that the program is included in the institution's accreditation and satisfies any applicable State or Federal program-level accrediting and licensing requirements for the occupations for which the program purports to prepare students to enter. 

The proposed regulations also included two metrics to determine whether a GE program remained eligible for Title IV funds—the debt-to-earnings (D/E) rates measure and the program cohort default rate (pCDR) measure, the latter of which was intended as a replacement for the repayment rate metric which was at the center of lawsuits filed after the 2011 rules were published.

When the final rule was issued in 2014 (with most provisions effective July 1, 2015 and disclosure requirements effective January 1, 2017) the pCDR measure was removed, leaving only the debt-to-earnings (D/E) metric to determine program eligibility. For a program to pass the D/E rates measure, it had to have a discretionary income rate less than or equal to 20 percent or an annual earnings rate less than or equal to 8 percent. The regulations also established a zone for GE programs that have a discretionary income rate greater than 20 percent and less than or equal to 30 percent or an annual earnings rate greater than 8 percent and less than or equal to 12 percent. GE programs with a discretionary income rate over 30 percent and an annual earnings rate over 12 percent would fail the D/E rates measure. Programs lost eligibility for Title IV once they failed the D/E rates measure for two out of three consecutive years, or had a combination of D/E rates that were in the zone or failing for four consecutive years. 

The regulations also established procedures for the calculation of the D/E rates and for challenging the information used to calculate the D/E rates and appealing the determination. The regulations also established a transition period for the first seven years after the regulations take effect to allow institutions to pass the D/E rates measure by reducing the loan debt of currently enrolled students.

The 2015 rules included reporting and disclosure requirements, including a requirement to warn students and prospective students if the program is at risk of losing eligibility to participate in the Title IV student aid programs in the next award year.

ED also delayed the disclosure requirements several times, from January 1, 2017, to July 1, 2017, then to July 1, 2018 and, finally, to July 1, 2019, while during this time period also initiating and completing a third round of negotiated rulemaking on this topic which resulted in the 2019 rescission of the gainful employment regulations.

Following the first release of gainful employment data, over 800 programs failed the debt-to-earnings standards, with 200 of those stating an intention to appeal.

In addition to significant implementation issues, the 2015 rules faced several legal challenges, this time with judges ruling in ED's favor with respect to two suits challenging ED's authority and the substance of the rule itself. Another lawsuit was filed by 17 states' attorneys general over ED's repeated delays of the disclosure requirements.  

NASFAA Summary of Final Rules

Department of Education Resources

NASFAA Public Comments

NASFAA Coverage of the 2013-14 Gainful Employment process

Other Resources

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