Neg Reg Day 2: Lack of Data Impedes Progress on Gainful Employment

By Allie Bidwell, NASFAA Senior Reporter

Negotiators continued to struggle to make progress toward consensus on re-writing a federal gainful employment rule, with many expressing concern that they did not have sufficient data to make informed decisions.

As the negotiating committee reconvened for the second day of the third and final session of negotiated rulemaking, or neg reg, several critical decisions were still up in the air. After a slow-moving first day on Monday, negotiators continually expressed frustration on Tuesday with what they said was a lack of federal data to show how different proposals would impact undergraduate educational programs.

Negotiators had a difficult time, for example, making a decision on how to calculate debt-to-income rates. In the proposed regulatory language the Department of Education (ED) presented the committee, debt would be amortized over a 10-year period for undergraduate certificates, post-baccalaureate certificates, and associate’s degrees, and over a 15-year period for bachelor’s degrees. But negotiators went back and forth over whether a 10-year period would be too long or too short for more short-term programs. They also tussled with whether using 20 percent and 8 percent as the thresholds for debt-to-earnings rates (for discretionary and total earnings, respectively) was too generous or too restrictive given the elimination of the “zone” category for programs.

In an attempt to provide more information and context for negotiators in the absence of official federal data, Marc Jerome, president of Monroe College, presented a compilation of data he and his colleagues developed using data from the College Scorecard to simulate what different proposals would look like. Jerome attempted to model what using a cap of 8 percent debt-to-earnings, with 10-year amortization and 6-year earnings would look like for different sectors, compared with other combinations such as 15-year amortization, 10-year earnings, or a debt-to-earnings rate above 12 percent.

Some negotiators still found little help from the data due to some limitations, such as the fact that College Scorecard data is presented at the institutional level, rather than the programmatic level, and that it includes non-completers, whereas the debt-to-earnings rate would only measure graduates.

Even when considering other options for measures to theoretically replace debt-to-earnings or repayment rates, negotiators contended that they needed to see data to back up their decisions. One proposal, which came from Chad Muntz, director of institutional research for the University System of Maryland, would require the publication of each program’s ratio of total debt to total earnings, and theoretically set a ratio cap. For example, negotiators would have to decide if a ratio of 1:1 ($100,000 debt and $100,000 annual earnings) would be reasonable. While some negotiators were interested in the idea, they still could not move forward due to the lack of data.

Negotiators again discussed the idea of excluding from the median wage calculation those completers whose incomes fell in the bottom 25 percent, assuming that such a change would address concerns about pay discrimination, self-employment, tip-based income, and other factors that could skew results if the entire student population was used.

The group even had a lengthy discussion about the possibility of approving a fourth neg reg session, with the idea that ED would come back with the necessary data to move forward.

“Why are we even re-negotiating a rule when we don't have the data to make an informed decision?” said Chris Gannon, vice president of the United States Student Association.

ED officials declined the option to hold a fourth neg reg session, saying they didn’t believe they could come back with more data, or sufficient data to produce more informed decisions.

In an attempt to encourage moving toward a consensus, the third-party mediators suggested delaying the start time for Wednesday’s session by one hour. During that time, they suggested, negotiators could privately come to the mediators to put forth areas for potential compromise. The mediators would then identify areas of overlap for the group to discuss in public. ED shot down the idea, however, because it would appear as a private caucus—an issue that came up during last month’s negotiations.

The committee will reconvene Wednesday morning to continue negotiations.


Publication Date: 3/14/2018

Tony L | 3/14/2018 11:23:29 AM

I hope the committee is mindful of the administrative burden that all of this reporting is placing on schools, especially in light of budget cuts. We are supposed to make the awarding of aid more simple, not burden it with more reporting and regulatory requirements.

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