Negotiators return to Washington this week for the second session of the Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) negotiated rulemaking committee. The panel’s first session focused almost entirely on Workforce Pell, while this one will concentrate on a new accountability system and related issues that will affect all of higher education.
Tonjua Williams, president of Florida’s St. Petersburg College, continues in her role representing public institutions.
If the negotiators reach consensus on the regulations after discussing and amending them over the week, the Education Department (ED) must use that version of the regulations when it issues a formal Notice of Proposed Rulemaking. In its first session, the committee reached consensus on the Workforce Pell regulations.
The One, Big, Beautiful Bill Act (OBBBA), signed into law in July, included a new accountability scheme that ties Direct Loan eligibility for degree and graduate certificate programs to defined earnings benchmarks. Generally speaking, undergraduate degree programs must lead to wages that are greater than those earned by high school graduates ages 25 to 34 in the state that the institution is located. A program’s failure to meet this metric could eventually render it ineligible to participate in the Federal Direct Loan program, though it would remain eligible for other Title IV programs, including Pell grants.
Given the huge number of community college programs that participate in Title IV, the loss of Direct Loan eligibility — again, required in OBBBA — is almost inevitable.
ED’s draft regulations
ED has released draft regulations to implement this new accountability metric and harmonize it with the existing Gainful Employment (GE)/Financial Value Transparency (FVT) regulations. The resulting framework is a rebranded “Student Tuition and Transparency System” that links to loan eligibility, as required under the new law as well as the existing gainful employment regulations.
The new system contains several positive developments for community colleges. Most importantly, it limits sanctions under the GE regulations to loan programs only, rather than all of Title IV. This aligns GE with OBBBA policies.
The draft regulations also would eliminate the debt-to-earnings metric from the GE/FVT regulations. Those regulations currently include a debt-to-earnings metric and earnings premium measure like the one to now be applied to non-GE programs. The American Association of Community Colleges (AACC) has always preferred the DtE metric over the earnings premium measure, but with Congress endorsing the earnings premium measure, ED’s application of this policy to GE is no surprise.
Completer’s cohort
Another notable aspect of the proposed regulations is the lengths that are to be taken to generate a cohort of 30 completers; the completers’ earnings would be used to determine whether a program meets or exceeds the earnings premium requirement.
To get to a cohort of at least 30 completers, ED would first go back additional years prior to the initial cohort year for the program in question until a cohort of 30 is attained, up to four award years in total. If that does not produce the requisite cohort, the same process would be used for programs at the institution that share the same four-digit CIP code, again up to four award years.
If that still has not produced a cohort of 30 completers, ED would do the same for all programs at the institution that share the same two-digit CIP code — a massive aggregation. While few institutions would encounter this situation, the regulations make clear that loan eligibility for starkly different programs may be a result of this cohort-building process.
AACC is pleased that ED is proposing relief from some reporting of the current GE/FVT reporting requirements. Notably, institutions that serve multi-state metropolitan areas would only have to report that programs that lead to licensure do so in any state, as opposed to all the states that are part of the metropolitan area. Compliance with this requirement has proved extremely nettlesome.
AACC will host a webinar on this topic on January 14.
