David P. Smole
Specialist in Education Policy
Postsecondary education programs eligible for participation in the federal student aid programs authorized under Title IV of the Higher Education Act of 1965, as amended (HEA), include those that, as a condition for eligibility, must prepare students for gainful employment in recognized occupations. These programs are offered by public and private not-for-profit institutions of higher education and postsecondary vocational institutions, and by for-profit, proprietary institutions of higher education.
In the summer of 2010, the U.S. Department of Education (ED) published proposed rules on programs that prepare students for gainful employment. These proposed rules were designed to address concerns about the quality of the programs and the amount of student loan debt that students who attend such programs incur. Essentially, the proposed rules called for the establishment of a series of reporting and disclosure requirements and a set of three performance metrics designed to measure how effectively program attendees repay the student loans they borrow to attend these programs, and the relationship between the debt of program completers and their earnings. A loan repayment rate measure would assess how effectively program attendees repay the student loans they borrow to attend these programs. Two debt-to-earnings measures would assess the relationship between the student loan debt of program completers and their earnings. A more stringent and a less stringent performance threshold would be established for each of the three measures.
Programs that meet the more stringent performance threshold for at least one of the three measures would remain fully eligible to participate in HEA, Title IV programs. Programs that do not meet the more stringent threshold for any of the measures but do meet the less stringent performance threshold for at least one of the measures would remain eligible to participate in HEA, Title IV programs, but they would become subject to sanctions, including having their enrollment of students who receive Title IV federal student aid restricted. Programs that do not meet at least the less stringent criteria on any of the three measures would lose their Title IV eligibility.
On October 29, 2010, ED finalized rules on a number of requirements for programs that prepare students for gainful employment. The final rules establish requirements for institutions to report certain information on students who attend or complete programs that prepare students for gainful employment; and establish requirements for institutions to disclose certain information on completion rates, placement rates, median student loan debt, and program costs for programs that prepare students for gainful employment. The final rules also establish a process for institutions to apply for approval to offer new programs that lead to gainful employment. ED has not yet published final rules on the proposed performance metrics.
On February 19, 2011, the House of Representatives passed H.R. 1, the Full-Year Continuing Appropriations Act, 2011, which, among other things, would prohibit ED from using funds made available by the act to implement, administer, or enforce the final rules on gainful employment, to issue or implement additional final rules on gainful employment based on the proposed rules, or to promulgate or enforce any new regulations or rules related to the term “gainful employment.”
This report explains and provides observations on the rules that were proposed in the summer of 2010 and the rules that were finalized in the fall of 2010.
Date of Report: March 21, 2011
Number of Pages: 26
Order Number: R41397
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Specialist in Education Policy
Postsecondary education programs eligible for participation in the federal student aid programs authorized under Title IV of the Higher Education Act of 1965, as amended (HEA), include those that, as a condition for eligibility, must prepare students for gainful employment in recognized occupations. These programs are offered by public and private not-for-profit institutions of higher education and postsecondary vocational institutions, and by for-profit, proprietary institutions of higher education.
In the summer of 2010, the U.S. Department of Education (ED) published proposed rules on programs that prepare students for gainful employment. These proposed rules were designed to address concerns about the quality of the programs and the amount of student loan debt that students who attend such programs incur. Essentially, the proposed rules called for the establishment of a series of reporting and disclosure requirements and a set of three performance metrics designed to measure how effectively program attendees repay the student loans they borrow to attend these programs, and the relationship between the debt of program completers and their earnings. A loan repayment rate measure would assess how effectively program attendees repay the student loans they borrow to attend these programs. Two debt-to-earnings measures would assess the relationship between the student loan debt of program completers and their earnings. A more stringent and a less stringent performance threshold would be established for each of the three measures.
Programs that meet the more stringent performance threshold for at least one of the three measures would remain fully eligible to participate in HEA, Title IV programs. Programs that do not meet the more stringent threshold for any of the measures but do meet the less stringent performance threshold for at least one of the measures would remain eligible to participate in HEA, Title IV programs, but they would become subject to sanctions, including having their enrollment of students who receive Title IV federal student aid restricted. Programs that do not meet at least the less stringent criteria on any of the three measures would lose their Title IV eligibility.
On October 29, 2010, ED finalized rules on a number of requirements for programs that prepare students for gainful employment. The final rules establish requirements for institutions to report certain information on students who attend or complete programs that prepare students for gainful employment; and establish requirements for institutions to disclose certain information on completion rates, placement rates, median student loan debt, and program costs for programs that prepare students for gainful employment. The final rules also establish a process for institutions to apply for approval to offer new programs that lead to gainful employment. ED has not yet published final rules on the proposed performance metrics.
On February 19, 2011, the House of Representatives passed H.R. 1, the Full-Year Continuing Appropriations Act, 2011, which, among other things, would prohibit ED from using funds made available by the act to implement, administer, or enforce the final rules on gainful employment, to issue or implement additional final rules on gainful employment based on the proposed rules, or to promulgate or enforce any new regulations or rules related to the term “gainful employment.”
This report explains and provides observations on the rules that were proposed in the summer of 2010 and the rules that were finalized in the fall of 2010.
Date of Report: March 21, 2011
Number of Pages: 26
Order Number: R41397
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Posts
