NASFAA

Negotiators Struggle With Details in Final Gainful Employment Neg Reg

By Allie Bidwell, NASFAA Senior Reporter

Higher education stakeholders gathered for the final negotiated rulemaking session on gainful employment struggled to make progress toward a consensus on Monday, as discussions jumped between topics and slowed on several details around how and for which groups of students the regulations would be applied.

During the first day of the third and final negotiated rulemaking, or neg reg, session, the Department of Education (ED) presented its proposed changes to draft regulatory language. Previously, ED had proposed applying the gainful employment rule to all educational programs. A central proposal in the new regulatory language is to change that scope to apply to just undergraduate programs, excluding graduate programs. ED also proposed including a loan repayment rate in addition to debt-to-earnings ratios to evaluate the student outcomes of various programs. The specifics of calculating that rate, however, are still to be determined.

The committee began by discussing the scope and purpose of the regulations—and whether excluding graduate programs could be justified—but switched gears to review other issue papers on debt-to-earnings and repayment rate metrics, as well as any sanctions to be imposed on schools not meeting the proposed benchmarks. Several negotiators said it would be difficult to discuss the scope and purpose of the regulations without first going through the other issues.

Many committee members took issue with eliminating graduate programs from the regulations because they said graduate students deserved to be informed of the quality of their programs, just like undergraduate students. On the other hand, some said graduate students are presumed to be more mature and savvy, and can make more informed decisions than someone who is encountering higher education for the first time. ED also made the case that excluding graduate programs would simplify the overall process and ease the administrative burden to some degree.

On the calculation of repayment rates, an ED official walked the group through the different potential mathematical methods for setting a threshold for the regulations, focusing mainly on box plots—a way to depict numerical data on a graph.

The group drifted throughout the day, however, in discussions on whether the regulations should use the word “threshold,” “standard,” or some other language to describe the evaluation of educational programs’ performance. They also debated the merit of ED’s request for feedback on the concept of   only calculating debt-to-earnings ratios and repayment rates based on the outcomes of graduates with GPAs in the top 50 percent of students completing a program.

“I oppose this both philosophically and logistically,” said Kelly Morrissey, director of financial aid at Mount Wachusett Community College.

Other negotiators contended that looking only at a subset of students—although not necessarily just the top half—would eliminate outliers that could, in their opinion, give an inaccurate picture of a program’s outcomes.

Jeff Arthur, vice president of regulatory affairs and chief information officer at ECPI University, for example, offered an alternative to ED’s top 50 percent GPA idea. Instead, he suggested excluding from the median wage calculation those completers whose incomes fell in the bottom 25 percent, noting that such a change would address concerns about pay discrimination, self-employment, tip-based income, and other factors that could skew results if the entire student population was used.

Neal Heller, CEO and president of the Hollywood Institute of Beauty Careers, said that change “wipes all [those concerns] clean in one fell swoop.”

“I think it’s a real opportunity for us to actually come to consensus on something, and address what is a real issue,” he said. “It is not going to be addressed by a disclaimer.”

While many committee members tentatively supported the idea, others, including Morrissey, said they would like to see more data to back up the specific proposal to eliminate the bottom 25 percent of students.

The group will continue its discussions on Tuesday, with the goal of reaching consensus by Thursday. If the group fails to reach consensus, ED will write the regulations as it sees fit, presumably taking into account discussions from throughout the neg reg process, and publish a Notice of Proposed Rulemaking for public comment.