New Gainful Employment Guidance Falls Well Short of Expectations
By Tom Netting, Co-Executive Director, CSPEN and Public Policy Advisory, Akerman LLP
On March 6, 2017, the U.S. Department of Education released Gainful Employment Electronic Announcement #105 – Additional Time for Submission of an Alternate Earnings Appeal and to Comply with Gainful Employment (GE) Disclosure Requirements. As detailed in the new Trump Administration’s first official announcement related to GE, the notice extends the deadline to July 1, 2017, for completion of two key requirements.
Alternate earnings appeals
First, EA #105 postpones the March 10, 2017, deadline for institutional submission of alternative earnings appeals to the GE Debt-to-Earnings rates. This delay provides those institutions with failing or zone programs who submitted a timely Notice of Intent to appeal by the Jan. 23, 2017, deadline with considerable additional time which can be used to survey students under the Recent Graduate Employment and Earnings Survey or work with various state entities to obtain state-sponsored data system information capable of reducing their GE D/E rate from either failing to zone, failing to passing (yes believe it or not it can happen), or zone to passing.
This is good news for the 289 failing programs out of 803 (36 percent) who submitted a timely Notice of Intent to appeal.
However, it does nothing to address the concerns of the broader population of 514 programs (64 percent) who did not submit a timely Notice of Intent to appeal on or before Jan. 23, 2017.
While the reasons why these institutions may have chosen not to submit a timely appeal likely vary, the fact that the institutions providing these programs did not appeal set into motion the publication of Student Warnings on Feb. 8, 2017, as outlined in Gainful Employment Electronic Announcement #101 – Additional Information on Alternate Earnings Appeals for Debt-to-Earnings Rates and Warnings for Programs with Failing Programs.
CSPEN had hoped that the requests from various Senators and Representatives (which included meetings with the Department by Representatives of MI, NY, and PA, outreach from Senators Tim Scott (R-SC) and Bill Nelson (D-FL), Rep. Lee Zeldin’s bipartisan letter with 18 House co-signers, and Rep. Scott Peters’ letter) would have resulted in the inclusion of a delay in the implementation of the Student Warnings as well. Such delays were proposed and considered before publication of the guidance, according to intelligence we have heard. Ultimately the new Administration determined that it was unable or unwilling to reverse course on all prior deadlines which had gone into effect. Thus, any hope of institutions with programs either failing or in the zone having an additional opportunity to submit an appeal AND any opportunity to delay implementation of the Student Warnings notifying enrolled and prospective students that the program could become ineligible based upon subsequent D/E rates were not supported at this time.
2017 disclosures reporting
Second, EA #105 pushes back the April 3, 2017, deadline for institutions subject to the GE regulations to publish the 2017 GE program disclosure requirements. Under both the original 2010 and subsequent 2014 GE regulations, institutions are required to provide updated information on no less than an annual basis of key information related to each program subject to the regulations. In order to comply with this requirement, the Department established a timeline for publication of a template which was to be used to report the information, with distribution by the Department of the required template in autumn and an annual deadline of Jan. 31 of the following year for the publication of the latest required disclosures. As part of the 2014 GE regulations, it was established that the new set of disclosures – and therefore a new template – would be required beginning in 2017.
On Dec. 16, 2017, the Department published Gainful Employment Electronic Announcement #99 – Delay in Releasing the 2017 GE Disclosure Template and Applicable Deadlines. The EA, among other guidance, explained that the Department was going to be late in providing institutions with programs subject to the regulations with the new template and, as a result, they were putting institutions on notice that they would not have to publish the new template until 60 days following the Department’s release of the 2017 Disclosure Template. It is important to note that as a part of this guidance the Department made it clear that “while institutions need not update their existing 2016 GE Disclosure Templates for 2017 until the new template was provided,” institutions were told, ” to continue to include their current GE Disclosure Template in all promotional materials made available to prospective students, and continue to display that template on the institutions website.”
On Jan. 19, 2017, the Department published Gainful Employment Electronic Announcement #103 – Release of the 2017 GE Disclosure Template. This EA announced the release of the 2017 GE Disclosure Template and established a deadline of April 3, 2017, for institutions to publish updated disclosures for each of their GE programs. Among other guidance EA #103 again reminded institutions with a failing program(s) of the required publication of Student Warnings within 30 days of the Secretary’s Notice of Determination unless the institution is appealing their rate, in which case the 30-day timeframe is withheld until the Secretary makes her decision on the institution’s appeal. Then along comes EA #105 which postpones the deadline for institutions to have to begin using the 2017 GE Disclosure Template until July 1, 2017, at the very latest.
As was the case with the alternate earnings appeals, the good news is that institutions with programs subject to the GE regulations now have until the middle of this year to begin using the 2017 GE Disclosure Template, providing lots of time to make certain that the calculations and information are accurate and properly posted and disseminated as required.
This is important because under the new 2017 GE Disclosure Template requirements, unlike the prior requirements, the 2017 GE Disclosure Template must be distributed to prospective students as a separate document before the student signs an enrollment agreement, completes registration, or makes any financial commitment to the institution.
The disclosure template may be provided by hand-delivering (individually or as part of a group presentation) it to the prospective student, or by sending it to the primary email address used by the institution for communicating with that student, ensuring that the disclosure template is the only substantive content in the email. If the hand-delivery method is used, written confirmation of receipt must be obtained from the prospective student. Likewise, if email delivery is utilized, the institution must receive electronic or other written acknowledgement that the email was received by the prospective student. If the institution receives a response that the email could not be delivered, the disclosure template must be sent using a different address or method of delivery. In all cases, an institution must maintain a record of its efforts to provide the disclosure template.
The bad news, this delay has the potential to cause additional confusion and possible harm, based upon a number of variables.
For example, the delay in required publication does not postpone an institution which did not appeal a failing program’s rate from having to provide the required Student Warnings to enrolled students within the 30-day timeframe and to all prospective students (at the point of first contact about the program between the institution and the prospective student) before enrolling, registering, or entering into a financial agreement. And how about the fact that, in theory, based upon the Department’s own guidance that institutions no longer have to update the 2016 GE Disclosure Template and its information – and now don’t have to publish new information until possibly as late as July 1, 2017 – you could go without reporting any new information from Jan. 31, 2016 to July 1, 2017. How does this guidance meet the regulatory standard that institutions are required to maintain timely and accurate information updated on at least an annual basis?
As is all too often the case with GE, we are once again left with as many questions as answers following the publication of the most recent guidance!
Conclusion
CSPEN has begun to seek guidance to these and a host of other questions. In the interim, here is an abridged version of what we know and what we do not know based upon conversations with Department of Education officials, Members of Congress and their staff, and others within the community.
What we know…
- EA #105 only provides limited regulatory relief for institutions who submitted a timely Notice of Intent to appeal.
- The Department staff have indicated that they cannot require states to provide institutions with state-sponsored data, and therefore it is up to the institution to persuade the state to provide whatever information they feel comfortable sharing.
- Department staff encourages institutions who submitted a timely Notice of Intent to appeal, to use the additional time to consider whether or not they will be able to successfully appeal their rate using either alternative earnings appeal process, and if they believe that they may be unable/unsuccessful in achieving the necessary results, consider whether there is time and ability to pursue the other process.
- EA #105 does not provide any relief for institutions with failing programs who did not submit a timely Notice of Intent to appeal – institutions with failing programs that did not appeal must continue to provide the Student Warnings and meet all of the regulatory requirements associated with the warnings.
What we don’t know…
- Will institutions who submitted a timely Notice of Intent to appeal that also submitted their appeal prior to the publication of EA #105 be given the opportunity to withdrawal their submission and use the additional time to potentially seek additional survey responses and further revisions to their rates?
- Will the Department/Secretary begin to review the appeals based upon when they are submitted or wait until the new July 1, 2017, appeal deadline to begin assessing the appeals and providing decisions?
- Is it more beneficial for an institution to publish the 2017 Disclosure Template sooner rather than later?
- What information should institutions consider providing in the interim between the publication of the dated Jan. 31, 2016 GE disclosure data and their publication of the new 2017 GE Disclosure Template and data?
We expect more questions to come up and welcome you to submit them to us at jeri@centralstatesedu.com. We will share them with both the Department/Administration and Congress to help acquire additional guidance and continue to show the problems associated with the highly problematic roll-out of this ill-conceived and harmful regulation.
There is some hope that this is not the last we will hear on GE from the new Administration. In summarizing the rationale for EA #105, the Department states, “this action is taken to allow the Department to further review the GE regulations and their implementation.” CSPEN believes that this suggests that the new Administration and Department are open to consideration of additional revisions in the future as they become more familiar with the regulation and all of its many flaws. It will be up to all of us to continue to help educate them on these finer points of concern, beginning with the faulty premise for establishing the regulation, failed implementation process and inability to meet their own established guidelines and timelines, and a multitude of inaccuracies and inequities in the data. The battle rages on, but this is the first in what we believe will be a long list of incremental steps toward significant short-term relief from the regulations most harmful effects, and a longer-term opportunity to repeal and replace the regulation in HEA reauthorization.
Tom Netting has more than 20 years of experience working in government relations and public policy on matters involving higher education and workforce development, elementary and secondary education, healthcare, veterans affairs and the procurement of federal appropriations. Tom represents for-profit institutions of higher education and post-secondary education companies.
Contact Information: Tom E. Netting // Co-Executive Director, CSPEN // Public Policy Advisory, Akerman LLP // 202-393-6222 // tom.netting@akerman.com // http://centralstatesedu.com