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ED Provides Further Guidance on Gainful Employment

April 26, 2011

UPDATE (May 6, 2011):

The Department of Education will offer a webinar on the new requirements to report data for the last three years on students enrolled in “gainful employment” programs and to disclose certain information about such programs to current and prospective students. This webinar, to be held on May 25 and 26, is free but advanced registration is required.

In a "Dear Colleague" letter (GEN-11-10) published on April 20, the Department of Education attempts to clarify issues surrounding new regulations on gainful employment programs scheduled to take effect on July 1. Those rules, issued in the October 29, 2010 Federal Register require institutions that participate in the Title IV student aid programs to report certain data to ED for programs that lead to gainful employment in recognized occupations and to disclose specific information to prospective students. Furthermore, those institutions must notify ED if they plan to add new gainful employment programs.

Although the common perception has been that the gainful employment rules target for-profit institutions, all institutions need to review their program offerings to determine which are covered. ED estimates that 5,000 institutions out of the 6,000 that receive Title IV funds will have at least one program subject to gainful employment rules.

The letter describes the types of programs that would be considered gainful employment programs at different types of institutions: domestic proprietary and vocational institutions, domestic public and nonprofit institutions, foreign proprietary institutions, and foreign public and nonprofit institutions. While very little has changed from the rules issued in October, ED clarifies that certificates awarded as part of a degree program are not subject to the gainful employment rules.

Reporting Requirements

The October 29 regulations require institutions to report a number of data elements for students enrolled in gainful employment programs. This information will presumably be used by ED in its forthcoming rules restricting eligibility of some gainful employment programs for Title IV funds. While ED is still completing the detailed list of data that institutions will need to report, it has attached a preliminary list to the "Dear Colleague" letter. A final list is forthcoming; however, institutions must begin reporting data to ED by October 1, 2011, "and must include information on students who were enrolled in a gainful employment program" during the 2006-2007, 2007-2008, 2008-2009, and 2009-2010 award years.

Institutions will be required to report data on all students enrolled in gainful employment programs, regardless of whether a student received Title IV funds, except for those for whom the institution does not have a Social Security Number. Foreign institutions will be required to report data only on U.S. citizens or Title IV eligible noncitizens (again regardless of whether a student received Title IV funds). Foreign institutions do not need to report on a gainful employment program if ten or fewer reportable students were enrolled during the award year.

Disclosure Requirements

The rules issued in October also require that for each gainful employment program, an institution disclose certain information to prospective students. ED is developing a Web-based disclosure form that institutions will be required to use, but until it is available institutions are responsible for meeting this requirement using their own forms. A list of disclosure requirements is included within the letter and rules.

One of the required disclosures is the median loan debt incurred by students who complete the gainful employment program. That figure will be provided to the institution by ED. For the first year, however, institutions will need to rely on their own calculations for the disclosures of median debt, as the data that institutions report to ED for that calculation are not due until October 1 (after the July 1 deadline for consumer disclosures). In preparing its own calculation of median debt, an institution should separately show Title IV debt and other educational debt, consistent with the information the institution will report to ED.

New Programs

Under the October rules, effective July 1, 2011, institutions are required to notify ED if they intend to add a new gainful employment program. Institutions should notify ED by July 1 of "any new gainful employment program where the first day of class will be on or after July 1, 2011, and before October 1, 2011." For gainful employment programs beginning on or after October 1, institutions must provide notice to ED at least 90 days prior to the first day of class. All notifications must include information to support the institution's determination of the need for the program.

Contact

Anne Gross
Vice President, Regulatory Affairs
202.861.2544
E-mail

Bryan Dickson
Policy Analyst
202.861.2505
E-mail