10-26: Gainful Employment Electronic Announcement #95 - Debt-to-Earnings Rate Alternate Earnings Appeals

Posted Date: October 26, 2016

Author:  Jeff Baker, Director, Policy Liaison and Implementation, Federal Student Aid

Subject: Gainful Employment Electronic Announcement #95 - Debt-to-Earnings Rate Alternate Earnings Appeals

As part of the Gainful Employment (GE) regulations, an institution may submit an alternate earnings appeal if it has a GE program with a final Debt-to-Earnings (D/E) rate that is failing or in the zone. While final D/E rates will not be issued until January 2017, institutions may submit their Notice of Intent to appeal upon receipt of their draft D/E rates. The sections below provide further information about the alternate earnings appeals process.

Alternate Earnings Appeals

Appeals may be submitted if using the alternate earnings would change a program’s D/E rate from zone to pass or from fail to either zone or pass.  An institution electing to submit an alternate earnings appeal must file a Notice of Intent to appeal with the Department no later than 14 days after the issuance of the final D/E rates, which is planned for January 2017.  Instructions on how to submit a Notice of Intent are provided below.

For institutions that have filed a proper Notice of Intent to appeal with the Department, the materials to substantiate the appeal are due no later than 60 days following the issuance of the final D/E rates.  As indicated in the regulations, appeal submissions must be complete, timely, accurate, correctly formatted, and consistent with any instructions issued by the Department.  Institutions failing to submit a Notice of Intent to appeal and the appeal itself within the relevant timeframe waive their right to appeal the GE program’s D/E rate.  For GE programs with appeals under consideration, the D/E rate consequences under 34 CFR 668.410 will not apply while the appeal is under review by the Department.  If a program’s final D/E rate is under appeal when final rates are made public, the program’s final D/E rate will be annotated to indicate that it is under appeal.

Under the GE regulations at 34 CFR 668.406, the institution submitting the appeal must calculate the GE program’s new D/E rates using, as the numerator, the annual loan payment amount from the final D/E rate calculated by the Department and the higher of the mean or median alternate earnings as the denominator.  If the appeal is approved, the recalculated D/E rate becomes the GE program’s final D/E rate.  If the appeal is denied, the previously issued final D/E rate remains the program’s final D/E rate.  Institutions will be notified of appeal results and of any consequences resulting from the final D/E rate.

Instructions for Appeal

To submit a Notice of Intent, institutions must send an email to AltEarningsAppeals@ed.gov.  While a Notice of Intent must be received by the Department no later than 14 days after the issuance of the final D/E rates, institutions may submit their notice upon receipt of their draft D/E rates.  Notice of Intent email messages must have the subject line “Notice of Intent to File Alternate Earnings Appeal” and the body of the email must include the institution’s name, 6-digit OPEID, and the CIP codes and credential levels for each program that will be part of the appeal.

Income data for alternate earnings appeals must be from the same calendar year used by the Department in its calculation of the program’s D/E rates; 2014 for the current cycle of calculations.

Alternate earnings data for D/E rate appeals may be obtained by the institution from either an institutional survey of the GE program’s former students or from a state-sponsored data system.  In either instance, the students included in the appeal must be those who were in the cohort that was used by the Department or in a comparable cohort period.

As described in Gainful Employment Electronic Announcement #85, the Department has created a survey and calculation tool to assist institutions, at their option, with conducting their own survey. The RGEES Platform and a Best Practices Guide are available in the “Resources” section of the Gainful Employment Information Page on the IFAP website.  Regardless of whether institutions elect to use the RGEES Platform, the survey must be conducted in accordance with the Department’s Standards for Conducting the Recent Graduates Employment and Earnings Survey (RGEES).  When submitting documentation of survey results for an alternate earnings appeal, institutions must include a signed certification from their President/CEO attesting that the survey was conducted in accordance with the Standards and that the mean or median earnings used to recalculate the GE program’s D/E rate were accurately determined from the survey results.  An examination-level attestation engagement report from an independent accountant or independent auditor must also be included, certifying that the survey was conducted in accordance with the Standards. 

When submitting documentation of alternate earnings data from a state-sponsored data system, the institution must demonstrate that the data were obtained for at least 50 percent of the completers in the cohort period and that it included at least 30 completers.  The submission must be accompanied by the President’s/CEO’s signed certification that the state-provided earnings data were accurately used to recalculate D/E results.

Completed appeal packages must be emailed to AltEarningsAppeals@ed.gov with the subject line “Alternate Earnings Appeal” and must include all required documentation as attachments to the email.  Appeals submitted after the 60-day period or with incomplete documentation will be denied.

Contact Information

If you have questions about the information in this Electronic Announcement, contact the Gainful Employment Operations Team at AltEarningsAppeals@ed.gov.

The Gainful Employment Information Page on the IFAP website contains publications and resources on GE as well as Frequently Asked Questions (FAQs). If you have a policy question about the GE regulations that has not already been addressed in the FAQs section of the Gainful Employment Information Page, please submit the question to ge-questions@ed.gov.

 

Publication Date: 10/26/2016


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