By Allie Bidwell, Communications Staff

A week before stakeholders are scheduled to meet for the second session of negotiated rulemaking on the federal gainful employment regulations, the Department of Education (ED) released draft regulatory language proposing significant changes, including expanding the rule to all programs — not just those that prepare students for gainful employment — and eliminating nearly all repercussions related to poor debt-to-earnings metrics.

ED proposed new regulatory language based on discussions from the first session of negotiated rulemaking, or neg reg, in December. In the first of eight issue papers, which highlight the main components of the regulations, ED said it would propose "to change the focus of these regulations from programs that prepare students for gainful employment in a recognized occupation to all ‘educational programs.'"

The scope of the regulations has been a main point of contention for proprietary institutions, which have claimed the regulation is arbitrary and would unfairly target their sector. The trade group Career Education Colleges and Universities (CECU), formerly the Association of Private Sector Colleges and Universities (APSCU), has taken legal action against the rule finalized under the Obama administration.

In July, when ED held a public hearing on the renegotiation of the gainful employment and borrower defense regulations, Steve Gunderson, president of CECU, said if the point of the regulation "is to protect students engaged in career preparation academic programs, then the rule must be broadly implemented to cover all students in all career programs at all institutions of higher education."

"Anything less," he said, "leaves 90 percent of all students at risk of no protection for their career education."

In addition to broadening the scope of the regulations, ED also proposed a revision of the debt-to-earnings rates used to hold institutions more accountable for student outcomes. Under ED's proposed language, institutions would no longer be at risk of losing eligibility to participate in Title IV programs due to poor debt-to-earnings rates. Additionally, a program's debt-to-earnings rate would no longer be classified as "passing," "failing," or falling into the "zone," as the 2015 regulation outlined. Rather, programs would be deemed as "acceptable," or "low-performing."

In place of the stricter sanctions, ED's draft language proposed that for each year a program is determined to be low-performing, it would provide notifications to current and prospective students. ED proposed adding a requirement for schools to notify current and prospective students if the school "has made or is making changes to the program to improve its outcomes," and removing a requirement that the institution must receive the students' acknowledgement that they have received the notification.

The information institutions are required to disclose to students would also change. ED proposed striking the requirement to report program cohort default rates and suggested replacing that disclosure with a "link to any web page" with the state's qualifications for licensure, and a link to the institution's page on ED's College Scorecard. ED also proposed eliminating an institution's requirement to disclose information directly to prospective students and striking all of an institution's reporting requirements, such as the date a student withdrew from the program and the amount of institutional debt accrued. Instead, ED proposed calculating an institution's debt-to-earnings rate without additional reporting requirements.

Stay tuned for updates next week in Today's News as the negotiations continue.

Publication Date: 1/29/2018

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