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Gainful Employment Metrics and Sanctions

Gainful Employment Metrics and Sanctions

As mentioned in our previous post, members of Salmon Sims Thomas recently attended a Town Hall meeting conducted by Career Education Colleges and Universities (CECU) held in Dallas, Texas. Steve Gunderson, President and CEO of CECU spoke about negotiated rulemaking (neg reg) that is currently underway. Several changes have been proposed that would be of benefit to proprietary career schools, including changes to the Gainful Employment Rule. The follow changes have been proposed during the neg reg committee sessions.

Issue #1: Scope and Purpose – GE to relate to all education programs using Title IV funds.

This change would expand the GE regulation to public and nonprofit institutions

Issue #2: Metrics – “Acceptable” and “Low Performing” ratings. Acceptable rating is defined as D/E rates at 8% or better. Low performing ratings defined as D/E rates lower than 8%.

Issue #3: Debt Calculations – amortize all debt over 15 years and if programs have less than 10 students – debt calculations not required.

Issue #4: Sanctions – eligibility for Title IV funding no longer tied to GE outcomes. Low-performing programs require communication to:

  1. Current students
  2. Prospective students

Issue #5 – Alternate Earnings Appeals has been eliminated.

Issue #6 – Program Information Disclosures – template maintained to report:

  1. Loan repayment rates
  2. Student mean and median earnings
  3. Program cohort default rates removed
  4. Link to State Licensure requirements
  5. Link to institution’s page on College Scorecard

Schools are no longer required to provide prospective students selected data.

Again, these are proposed changes and may be revised before a final regulation is published.  A final regulation must be published on or before October 1st of each year to become effective in the following award year.  Therefore, if changes are made to the GE regulation they will become effective July 1, 2019 at the earliest.

Stay tuned for more updates.  If you have questions, please contact Eileen Keller at ekeller@sstcpa.com