Dive Brief:
- Institutions will have more time to comply with reporting requirements under the gainful employment and financial value transparency regulations finalized last year, the U.S. Department of Education said Friday.
- Colleges now have until Oct. 1 to provide required information on student financial outcomes. Previously, that deadline was set for July 31.
- The extension comes after the department faced political pressure to delay the reporting requirements amid the troubled release of the new Free Application for Federal Student Aid form.
Dive Insight:
The gainful employment regulations largely target the for-profit college sector. They focus on debt-to-earnings outcomes and how much graduates make compared to those with only a high school diploma in the same state. Colleges that repeatedly fail to meet the benchmarks risk losing access to federal financial aid.
The financial value transparency regulations, meanwhile, will create a website disclosing information such as the cost and loan burdens associated with certain programs across all types of colleges, including nonprofit institutions.
The reporting requirements for both sets of rules include detailed information at both the program and student level.
In announcing the new timeline, the Education Department said the later deadline would allow “institutions to focus their efforts on getting aid to students this spring,” as well as give them more time to compile the gainful employment data.
Institutions can begin reporting data to the National Student Loan Data System starting July 1.
The department plans to release the first official round of gainful employment and financial transparency metrics in early 2025.
For-profits have pushed back on the regulations and the timeline, and their main industry group is asking for even more time beyond the extension.
“While we applaud the Department for extending the reporting deadline, an additional two months is not enough time for institutions to comply,” Jason Altmire, CEO of the for-profit industry association Career Education Colleges and Universities, said in an emailed statement. Altmire pointed to the FASFA difficulties and “the lack of guidance on reporting requirements” around the gainful employment rule.
The gainful employment rules and reporting requirements have been the subject of lawsuits, including one filed by the American Association of Cosmetology Schools in late 2023 and another brought by Ogle School Management and Tricoci University of Beauty Culture in March.
In their complaint, the plaintiffs in the latter case said the gainful employment rule would most heavily impact beauty schools. That’s because the prevalence of cash payments and tips in the industry can lead to underreported earnings, they said.
The plaintiffs argued “it is no exaggeration to say that the rule poses an existential threat to cosmetology programs, as nearly every such program will fail the tests created by this rule and lose the ability to process federal student aid as a result.”
The lawsuits seek to block the rule’s implementation. Both were filed in the U.S. District Court for the Northern District of Texas.
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