The Gainful Employment Rule Is All but Gone for Higher Education Institutions

The Department of Education (ED) has issued its final rule rescinding the bulk of the gainful employment regulation (subparts Q and R). The rule goes into effect July 1, 2020, but your higher education institution may begin undoing its major compliance components at any time prior to that date.*

Though your college or university will ultimately be unburdened of the gainful employment (GE) regulations, whether in 2020 or earlier, you’re still on the hook for submitting applications for new Title IV-eligible certificate programs. And it’s important to know that your GE program data remain published — and will likely be expanded going forward.

Early implementation relieves institutions of several requirements

If your school implements the GE rescission ahead of schedule, you will not have to:

• Directly distribute the disclosure template to prospective students, which was required starting on July 1, 2019
• Include the disclosure template or a link to it in your GE program promotional materials
• Post the GE disclosure template (and you may remove the template and any other GE disclosures from your website)
• Report GE data for the 2018-19 award year to NSLDS, which would otherwise be due October 1, 2019
• Comply with the certification requirements for GE programs

Your institution must document early implementation internally and make it available to ED upon request, but you don’t have to publish your decision to do so externally. It’s a good idea to make use of ED’s early implementation guidance to help you along the way.

Institutions must still apply when adding new certificate programs

Once your school extracts itself from the GE rule, then there are no disclosure, reporting, or extra certification requirements for your GE programs. Programs that failed the GE debt-to-earnings ratios no longer have any special disclosure requirements. As there was never a second year of debt-to-earnings ratios calculated, there were no programs made ineligible by ED.

However, your institution must still submit an application to ED to add any new certificate programs and, in some cases, degree programs for Title IV approval. Title IV-eligible programs must be listed on your institution’s Program Participation Agreement and Eligibility and Certification Approval Report. The rescinded GE requirements related to certification dealt with program accreditation, satisfied professional licensure or certification in your institution’s state, and made sure a program was not substantially similar to any ineligible or voluntarily discontinued programs you may have offered in the prior three years.

Your program data are still available to consumers and researchers

Many alternate earnings appeals are still in process awaiting a ruling from ED. Although the new rule does not become effective until July 2020, do not expect ED to rule on any further alternate earnings appeals. This is important because your program data are still out there. Although the GE regulations have been rescinded, the debt-to-earnings rates collected and published for all programs under the 2014 GE rule are still available to consumers and researchers. In fact, so are the data going all the way back to the 2011 rule.

Look for expanded data on the College Scorecard

The ED has indicated it plans to expand the available information on its College Scorecard to include some data previously available on the GE disclosure template. It’s believed that this would heighten the transparency of all programs at all institutions, not just those previously determined to be GE programs. This intended transparency does not necessarily come with any additional accountability or restrictions for poorly performing programs.

Additional data elements that have been proposed for the College Scorecard include:

• Total graduates per program level (in addition to institution-level rates currently published)
• Percentage of undergraduate Title IV loan borrowers who complete the program
• Program-level median Title IV student loan debt for completers, including parent and graduate PLUS loan debt, and the estimated monthly payment of median loan debt
• Median earnings data for federal aid recipients at various intervals (e.g., one, five, and 10 years) after completion of the programs
• Links to relevant occupational information

How we can help

CLA’s higher education professionals can help you understand the impact of the GE rescission at your college or university and implement the regulations accordingly.

*The ED must follow the requirements of the master calendar found in Section 482 (c) of the Higher Education Act of 1965, as amended. This requirement states that the ED must publish a final rule by November 1 in order for it to be effective the following July 1. Therefore, the July 1, 2020, date applies. However, the ED does have the authority to designate regulations for early implementation. This was done by the Secretary of Education with this latest final rule to allow schools to opt out of the requirements from the initial GE regulation as early as July 1, 2019.