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On September 28, the Department of Education published its long-awaited gainful employment (GE) final regulation. The rule, which formally will be published in the Federal Register on October 10, aims to protect students from higher education programs that leave them with unaffordable debt or no improvement to their earnings. It takes effect July 1, 2024.

The rule mostly follows the proposed regulation ED had circulated earlier this fall, with a few notable differences. ED said it received approximately 7,500 comments on its proposal.

Gainful Employment Provisions

The rule’s GE provisions, which ensure that institutions prepare students for gainful employment in a recognized occupation, focus on certificate programs provided at all institutions, along with all programs at proprietary institutions. The GE section contains two accountability metrics:

  • Debt-to-earnings (D/E) rate. The D/E rate compares median annual loan payments on debt borrowed for the program against the median earnings of graduates who utilized federal aid. Payments must be no more than 8% of annual earnings or 20% of discretionary earnings.
  • Earnings Premium (EP) test. This accountability metric measures if a program’s graduate, who received federal aid, is earning at least as much as a typical high school graduate in the labor force in their state. This demonstrates whether a program enhances a student’s earning potential relative to if they had not pursued a postsecondary credential.

Programs that fail either the D/E or EP metric in a single year will be required to disclose to current and prospective students that the program could be at risk of losing Title IV eligibility in future years. Programs that fail the same metric in two of three consecutive years would lose Title IV eligibility. 

The first official metrics will be published in early 2025, and programs may first become ineligible in 2026, according to a fact sheet published by ED.

Financial Value Transparency Provisions

ED has designed a Financial Value Transparency (FVT) framework to share with all students in all programs at all institutions the earnings, borrowing amounts, cost of attendance, and sources of financial aid. To provide students with an estimate of out-of-pocket expenses necessary to complete programs, ED will develop a website to host information about—

  • Program costs (tuition, fees, books, and supplies)
  • Non-federal grant aid
  • Loan burden (private and federal)
  • Completers’ earnings
  • Applicable occupational and licensing requirements

The FVT framework requires students at certificate and graduate degree programs to acknowledge having seen the financial information on the website before enrolling in a program that leaves graduates with high debt burdens. ED will utilize the GE D/E and EP metrics for these purposes. In a departure from the proposed rule published earlier this year, ED is exempting students in undergraduate programs from the acknowledgement provision.

Schools will need to begin reporting FVT information on July 1, 2024; however, the website housing the information will be developed later, with the first acknowledgement requirements starting in 2026, according to ED.

Other Regulations

Four other regulatory topics were addressed through this rulemaking effort, which took place during the winter of 2021-22: financial responsibility, administrative capability, certification procedures, and ability to benefit. NACUBO submitted comments on the proposed financial responsibility and certification procedures proposed language. This final rule only addresses the gainful employment provisions; the remaining four final regulations will be published in the Federal Register later. It is expected that the remaining items will be released by November 1 so that they, too, can take effect on July 1.


Bryan Dickson

Director, Student Financial Services and Educational Programs


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