What Colleges and Universities Need to Know About the Department of Education’s Impactful Proposed Institutional and Program-Level Rules
June 6, 2023
On May 19, 2023, the U.S. Department of Education published in the Federal Register a Notice of Proposed Rulemaking (NPRM) for a package of proposed rule changes addressing financial value transparency (FVT) and gainful employment (GE), financial responsibility, administrative capability, certification procedures and ability to benefit (ATB).
As described by the Department in its press release, the proposed regulations would establish “the strongest set of safeguards ever to protect students from unaffordable debt or insufficient earnings from career training programs, along with new measures to increase transparency across all postsecondary programs,” regardless of ownership type. Potentially of immediate impact to most institutions, the proposed rule would (1) establish new FVT disclosures applicable to every Title IV-eligible educational program at all institution types and (2) reinstate expanded, tougher GE requirements applicable only to GE programs (which includes nearly all programs at proprietary institutions and only certificate programs at public and private nonprofit institutions). Both the FVT and GE regulations would utilize a debt-to-earnings (D/E) rate and an earnings premium (EP) threshold metric to measure the value of Title IV programs, but loss of Title IV eligibility would only occur for GE programs. The FVT proposal is notable in that it is the first time the Department has attempted to measure the value of educational programs at traditional (nonprofit and public) institutions.
