Washington Watch: Mulling gainful employment regs

U.S. Education Department (Photo: AACC)

The U.S. Education Department (ED) last Friday wrapped up the second of three week-long negotiated rulemaking (negreg) sessions of the Committee on Institutional and Programmatic Eligibility for the Title IV student aid programs.

As previously noted, community colleges are represented at the negotiating table by primary negotiator Anne Kress, president of Northern Virginia Community College and a member of the American Association of Community Colleges (AACC) board of directors, and alternate negotiator Will Durden, director of basic education for adults at Washington State Board for Community and Technical Colleges.

Because AACC nominated Kress, the association is limited in the comments it can make regarding the discussions due to negotiation protocols. This article is only an account of the second week’s negotiations, which were conducted virtually.

Familiar grounds

Of the seven issues up for negotiation during this session, gainful employment (GE) is the most consequential for community colleges since it determines federal student aid eligibility for all Title IV-eligible certificate programs. In the second week of negotiations, ED provided a draft of the regulatory language after it initially offered only a series of discussion questions. The draft regulations are modeled heavily on the final 2014 GE regulations, the second set of GE regulations promulgated by the Obama administration; previously, several negotiators signaled strong support for using them as a basis.

ED proposes calculating two debt-to-earnings rates (D/E rates) for a given GE program – the discretionary earnings rate and the annual earnings rate. A GE program would pass the D/E rates if its discretionary earnings rate is less than or equal to 20% and its annual earnings rate is less than or equal to 8%. If a program fails the D/E rates in two out of three consecutive award years for which the rates are calculated, the program would become ineligible for Title IV aid.  There is no “zone” as in prior rules.

Institutions would be required to notify enrolled and prospective students in any year that a GE program fails the D/E rates, even if the program isn’t yet ineligible.

The draft regulations included several reporting requirements for institutions, such as information on the date a particular student enrolled in a program, the date a student completed or withdrew from a program, the total amount the student received from private education loans to enroll in the program and the total amount of institutional debt the student owes following completion of or withdrawal from the program, among others.

In addition to the draft regulatory language, ED offered alternative accountability frameworks for the committee to consider, since analysis has shown that although some programs would pass the D/E rates because of their relatively low debt levels, their graduates still have very low levels of earnings.

During the first week, several negotiators suggested the addition of an earnings metric, expressed as the difference between the median earnings of program graduates and a threshold level of earnings. ED offered a few possibilities for that threshold, including the median earnings of a high school graduate in the same state, a multiple of the Federal Poverty Guideline or the full-time minimum wage, either at the federal or state level.  In negotiations, Kress expressed her concern over these proposals.

Most of the draft regulatory language did not receive approval from all members of the committee, signaling that the GE regulations still have a way to go before negotiators can reach official consensus at the next and final session.

Proving administrative capability

In the first week of negreg, ED proposed a new criterion that institutions would have to meet to demonstrate that it is administratively capable. This criterion states that an institution would have to show that it “provides adequate career services to eligible students who receive Title IV, HEA program assistance.” In the updated language, ED added that it would consider the career services the institution has publicized to its students as a factor in determining an institution’s administrative capability.  

ED also added language requiring institutions to provide students with “accessible clinical or externship opportunities” if they are required for the student to complete a credential or receive licensure.

Neither of these additions were approved by all members of the committee, but it’s unclear if and how ED would refine the language.

Certification procedures

Another issue at the table of note to community colleges relates to a change ED made between the first and second sessions about the allowable length of GE programs. ED’s goal is to prevent a student in one state from spending considerably more time – and money – in an equivalent program than a student in another state, based on differing state licensure requirements. To accomplish this, ED’s proposed regulatory language defines maximum eligible program length as the lesser of the minimum number of training hours required by the institution’s state or the national median of the minimum number of training hours, as determined by at least 25 states.

However, if the national median for a particular occupation’s training hours is less than the requirement in the institution’s state, the length of the program may meet federal requirements while failing to meet state requirements.

Along with other negotiators, Kress did not approve this section of the issue paper during the committee’s informal check-in. It appears almost certain to be revised. 

What’s next

The final round of negotiations will take place March 14-18. During that session, negotiators will attempt to reach final consensus on each of the seven issues. In the interim, additional proposals from negotiators are expected to be forthcoming, including some from community colleges. 

If consensus isn’t reached on a particular issue, ED has broad authority in developing a notice of proposed rulemaking. Otherwise, the proposed regulations are required to align with the agreement reached at the negotiating table.

About the Author

Alexis Gravely
Alexis Gravely is a legislative analyst at the American Association of Community Colleges.