AGENDA What is GE all about? What WERE the final rules? What is
currently in place? Whats next?
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What is GE all about?
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It is about loan debt but
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What is GE all about? The Higher Education Act of 1965 (HEA)
was legislation signed into law on November 8, 1965 The law was
intended to strengthen the educational resources of colleges and
universities and to provide financial assistance for students in
postsecondary and higher education. The Higher Education Act of
1965 was reauthorized in 1968, 1971, 1972, 1976, 1980, 1986, 1992,
1998, and 2008. Current authorization for the programs in the
Higher Education Act expires at the end of 2013.
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What is GE all about? So what???
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What is GE all about? The Higher Education Act of 1965 requires
for-profit colleges to provide an eligible program of training to
prepare students for gainful employment in a recognized occupation
but does not define gainful employment. As part of the Program
Integrity Regulations of 2010 the department has defined
expectations for Gainful Employment by creating metric/outcomes
which, if not obtained, would lead to program level loss of
TIV.
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Gainful Employment Time Line Notices of Proposed Rulemaking
published 6/18/10 & 7/26/10 Two sets of Final Rules published
on 10/29/10 with effective date of 7/01/11 Program Integrity;
Gainful Employment Reporting and Disclosures Gainful Employment New
Programs One set of Final Rules published on 06/13/11 Performance
metrics
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Gainful Employment Time Line On June 30, 2012, the U.S.
District Court for the District of Columbia issued a decision that
vacated most of the gainful employment regulations The department
pursued a reversal of this ruling it was denied. A Bi-partisan
groups calls for Reauthorization to include GE regs but it should
be for all sectors.
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Gainful Employment Time Line On September 3, 2013 the
department released Draft Rules for the negotiators On September 9,
2013 the negotiators start the process.
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Summary of Negotiated Rule Making Process
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Guideline for negotiations are published Negotiations begin
Generally 3 sets of 3 days (this time 2 sets of 3 days) Negotiators
are chosen by the department from each sector There are federal
negotiators as well If everyone (school sectors and FSA) agree, the
proposed rule will be published as agreed upon. If agreement is not
reached, then the department can publish proposed rules as they
please
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Summary of Negotiated Rule Making Process The department
publishes proposed rules There is a comment period usually 60 days
In the final rules package the department must respond to all
comments and questions received during the comment period. READ THE
PREAMBLE Final rules that are published before November 1 st can go
into effect July 1 st. If not published by November 1 st then regs
CANNOT GO INTO EFFECT until the following July 1 st.
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Schools/Programs Impacted by the Current Gainful Employment
regulations All programs at for-profit schools Any program at a
public or not-for-profit school that is not - A program leading to
degree - A transfer program of at least two years
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Gainful Employment Annual Submission VACATED Institutions must
annually submit information on students enrolled in programs
leading to gainful employment in a recognized occupation
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Gainful Employment Disclosures NOT VACATED Disclosures must be
in promotional materials made available to prospective students AND
on its website Program home page website - Information simple and
meaningful - Contain direct link to any other webpage with general,
academic or admission information about the program - Information
in an open format that can be retrieved, downloaded, indexed, and
searched
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Gainful Employment Disclosures NOT VACATED Institution is
required to disclose: 1.) Occupations (by name and SOC codes) its
programs prepare students to enter Links to occupational profiles
on O*NET 2.) Costs tuition/fees, room/board and books and supplies
May include additional costs
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Gainful Employment Disclosures NOT VACATED Institution is
required to disclose: 3.) On-time completion rate for each program
4.) Placement rate for students completing each program
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Gainful Employment Disclosures NOT VACATED Institution is
required to disclose: 5.) Median loan debt incurred by students as
provided by ED Identified separately as Title IV loan debt, private
educational loan debt and debt from institutional finance plans
Institutional finance plan - amount student obligated to pay at
completion of program
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Gainful Employment New Programs VACATED Institutions must
notify ED at least 90 days before the first day of class when it
intends to offer a new educational program that leads to gainful
employment in a recognized occupation
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Metric/Performance Tests VACATED Repayment Rate - is a
percentage of the Title IV loan amounts that a GE Programs former
students are repaying Debt to Income Ratio - For the GE Programs
completers, the median educational loan annual repayment amount as
a percentage of the average (mean or median) completers income Two
measures o Annual and Discretionary
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Whats in the Draft Regs?
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The proposed draft rule reflects significant changes from the
final rule that was published in 2011, and then largely vacated in
a federal District Court ruling in 2012. Would seem to expand the
rules scope and put many more programs at risk
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Whats in the Draft Regs? Elimination of one of three debt
measures (the Loan Repayment Rate); Establishment of new thresholds
for the two surviving rates (the Debt to Earnings Rates) based on a
measurement period that could be as short as two years (rather than
the three-year minimum under the prior rule);
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Whats in the Draft Regs? Creation of separate non-contiguous
scores for passing and failing, with a new zone status for
educational programs that neither pass nor fail; Change in the
definition of covered programs by reducing the minimum number of
completers. This change alone is calculated to roughly double the
number of educational programs subject to this rule,
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Whats in the Draft Regs? Creation of a new definition of
covered students to exclude all data for students who did not
receive Title IV federal student aid funding in the form of a grant
or loan, while continuing to include private and institutional loan
data for students who did receive a Title IV loan or grant;
Establishment of new standards for passing and failing scores that,
according to EDs estimate, would render approximately 9% of all
programs ineligible and approximately 12% of all programs in the
zone;
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Whats in the Draft Regs? For those schools that fail the Debt
to Earnings Rates in a single year, imposition of enrollment caps.
The draft rule suggests that ED intends to put the GE Rule into
effect immediately after the expected July 1, 2015 effective
date.
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Whats in the Draft Regs? ED would require institutions to
submit their first data reports by July 31, 2015. The first set of
GE rates would be published in final form for the 2014-15 award
year, based on student information for the 2010-11 and 2011-12
award years. These rates would incorporate the most currently
available earnings data for these students. While the first rates
might not be published for several years, most of the data used to
calculate those rates, especially the data on educational debt,
seems to be fixed at this time.
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Whats in the Draft Regs? The draft rule suggests that ED
intends to put the GE Rule into effect immediately after the
expected July 1, 2015 effective date. ED would require institutions
to submit their first data reports by July 31, 2015. The first set
of GE rates would be published in final form for the 2014-15 award
year, based on student information for the 2010-11 and 2011- 12
award years.
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Whats in the Draft Regs? If ED is able to follow the timeline
as suggested in the proposed draft rule, it is quite possible that
the first set of GE rates would be issued in draft form in early
calendar year 2016 and published in final form later in that year.
As a result, institutions with failing programs would be subject to
enrollment caps and be required to issue student warnings in late
2016
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Whats in the Draft Regs? Based on the shorter measurement
period, could be subject to loss of eligibility in 2017. These time
frames are of course, at this point, subject to many variables
certainly including what will actually happen in the pending Neg
Reg process.
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Whats in the Draft Regs? Loss of Eligibility, Mandatory
Conditions and the Zone Rather than a single standard to measure
passing and failing, as under the prior rule, the new draft rule
would set one standard for passing and another for failing, with a
zone status for programs that are in between.
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Whats in the Draft Regs? Loss of Eligibility While the prior
rule required a program to fail the debt measures in three out of
four years, the draft GE Rule would shorten this period to two out
of three years. A program that fails both of the D/E Rates for two
consecutive years or two out of any three consecutive years would
be found ineligible for continued Title IV funding, and that period
of ineligibility would extend for at least three years.
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Whats in the Draft Regs? Loss of Eligibility Extended status in
the zone can also lead to a loss of eligibility. If a program is in
the zone for four consecutive years, because it cannot reach a
passing rate under either the Debt to Annual Earnings or Debt to
Discretionary Earnings Rates in any of those four years, it too
would lose eligibility.
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Whats in the Draft Regs? Mandatory Conditions for Failing
Programs If a program fails both of the D/E Rates in a single year
(due to a Debt to Annual Earning Rate above 12% and a Debt to
Discretionary Earnings Rate above 30%), the institution would be
required to meet two difficult conditions.
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Whats in the Draft Regs? Mandatory Conditions for Failing
Programs First, it would have to provide current and prospective
students with written warnings, in language prescribed by the
Secretary, that the students may not be able to obtain Title IV
funding to complete their program at the institution and describing
the options available to the student, including transferring to
another program or another institution. Second, such a program
would be subject to an immediate enrollment cap that would limit
enrollments of Title IV students in the next 12 months to the
population of such students in the prior 12 months. Note, however,
that this would not cap non- Title IV enrollments.
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Whats in the Draft Regs? The Zone The draft rule would also
create a zone for programs that are neither passing nor failing. A
program that does not pass either of the D/E Rates but has a Debt
to Annual Earnings Rate between 8% and 12% or a Debt to
Discretionary Earnings Rate between 20% and 30% would fall into the
zone. This status would not trigger any conditions such as warnings
or enrollment caps. The duration of the zone status would be
limited,
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Whats in the Draft Regs? Other Provisions Annual Data
Reporting: Institutions would be obligated to file annual reports
with detailed information about their students enrolled in GE
programs, with the first such report due on July 31, 2015.
Disclosures: The draft rule proposes expanded disclosure
requirements,.
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Whats in the Draft Regs? Other Provisions Completion Rates: ED
indicates that it will calculate, and require disclosure of, two
completion rates the first for students who complete a program
within 100% of normal time and the second for students who complete
within 150% of normal time. New Programs: The Department did not
provide any proposed draft language on the procedures for
institutions to apply to have new gainful employment programs
HOWEVER.
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What are the Negotiators Talking About? Proprietary sector
negotiators are pushing for more sensible measures while
non-proprietary sector members are pushing for more stringent
measures One negotiator wants schools to submit letters of credit
to the department when in the zone and/or failing. One negotiator
wants to empower the department to decide what programs a college
can continue to run based on economic settings even if the program
is not failing.
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What are the Negotiators Talking About? Breaking out into
separate committees: Repayment rates--led by Jack Warner from the
South Dakota Board of Regents Placement rates--led by Della Justice
from the Kentucky Attorney General's office Transition
periods/opportunities to improve--led by Belle Wheelan from SACS
and Marc Jerome from Monroe College Program level cohort default
rates--led by Brian Jones from Strayer University Upfront
requirements--led by Barmak Nassirian from AASCU Student
consequences--led by Eileen Connor from the New York Legal
Assistance Group
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What are the Negotiators Talking About? Next 3 day session NEXT
WEEK!!
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Howard Leslie Vice President, Financial Aid
[email protected] 212.933.6700 Ext. 1205