The Department Of Education’s Financial Value Transparency And Gainful Employment Regulations To Take Effect This Summer – Education

On October 10, 2023, the Department of Education published final
regulations that apply to most educational programs that are
eligible to participate in the student financial assistance
programs authorized under Title IV of the Higher Education Act of
1965, as amended (HEA). These Financial Value Transparency (FVT)
and Gainful Employment (GE) regulations are scheduled to be
implemented on July 1, 2024. Recently, the DOE published an
overview of the proposed new regulations.

The proposed rules from FVT and GE aim to improve regulations
concerning career-training programs. These changes focus on
addressing issues with some educational programs that are supposed
to help students secure well-paying jobs but instead leave them
with high levels of student debt or earnings that do not improve
compared to people who only finished high school. Additionally, the
Department of Education wants to make it easier for students to
understand the financial costs and benefits of almost all college
and university programs that qualify for federal student aid under
Title IV of the HEA.

The FVT regulations are designed to improve the quality and
availability of information provided directly to students about the
costs, sources of financial aid, and outcomes of students enrolled
in all Title IV HEA eligible programs. These FVT regulations
establish two measures: the debt-to-earnings measure and the
earnings premium measure. The regulations also establish
performance benchmarks for each measure to determine whether the
program may have adverse financial consequences to students.

The GE regulations establish an accountability framework for GE
programs that use the same earnings premium and debt-to-earnings
measures to determine whether a GE program remains eligible for
Title IV HEA funds. These requirements can affect program
eligibility and apply only to GE programs.

Summary of the significant requirements in the FVT/GE
regulations

The regulations generally –

• Define a student, for the purposes of the FVT/GE regulations
  and the disclosure regulations under the HEA, as an individual who
  received Title IV funds for enrolling in an educational
  program.




• Define a “qualifying graduate program” as a graduate
  program in which students must complete required post graduation
  training to enter certain occupational fields, where at least half
  of the program’s graduates obtain licensure in a state where
  those training requirements apply, and that meets necessary
  accreditation requirements for licensure. For such programs, the
  DOE will use a standard cohort comprised of graduates who completed
  the program in earlier award years than are used for the cohorts of
  completers for other programs. This will result in earnings being
  measured a longer period of time after graduation, giving
  completers time to finish their postgraduation training and begin
  their careers.

The FVT regulations –

• Require institutions to report information about students who
  enrolled in each of the institutions’ Eligible Non-GE programs
  and GE programs (defined as all non-degree programs (e.g.,
  certificate programs, diploma programs) that lead to recognized
  credentials at public and private nonprofit institutions are GE
  programs except for CTP programs (defined below) and prison
  education programs) to enable the DOE to calculate the
  program’s debt-to-earnings (D/E) and earnings premium (EP)
  measures and other information that institutions may be required to
  disclose or the DOE may disclose.




• Exclude students from consideration in either measure if they
  are enrolled in comprehensive transition and postsecondary (CTP)
  programs, prison education programs, or programs or coursework that
  do not lead to a recognized credential.




• Exclude students from consideration in either measure if they
  qualify for total and permanent disability or if they have
  died.




• Establish D/E rates that compare the amount of debt program
  graduates incurred to attend that program to the discretionary and
  annual earnings of graduates after completing the program. Two D/E
  rates are calculated, one based on annual earnings and one based on
  discretionary income.




• Establish an EP measure that evaluates the extent to which a
  graduate of a program out-earns the median annual earnings of
  individuals with only a high school diploma or equivalent in the
  same state the program is located, or nationally, if 50 percent or
  more of the students in the program were located outside that
  state.




• Provide that for the first six years the regulations are in
  effect, institutions may choose whether to report student-specific
  data either using the standard methodology (requiring data for
  several recently completed award years) or a transitional
  methodology (requiring data from only the two most recently
  completed award years).




• Require the DOE to establish a website to disclose to current
  and prospective students information about the institutions’
  Eligible Non-GE programs and GE programs.




• Require prospective students to acknowledge having seen the
  information on the DOE’s website if a non-degree or
  graduate-level program has failed the D/E rates before entering an
  enrollment agreement with an institution.

The GE regulations –

• Provide that a GE program loses Title IV eligibility if it
  either fails the D/E rates measure in two out of any three
  consecutive award years for which rates are calculated or the EP
  measure in two out of any three consecutive award years for which
  rates are calculated.




• Provide the opportunity for an institution to appeal a GE
  program’s loss of eligibility solely on the basis of a
  miscalculated D/E rate or earnings premium.




• Establish a three-year period of ineligibility for failing GE
  programs that have been voluntarily discontinued or withdrawn from
  Title IV eligibility by an institution, or that lose eligibility as
  a result of failing the D/E rates or EP metric, during which the
  DOE will not approve a substantially similar program in the same
  4-digit CIP code range as the failing program.




• Require institutions to provide warnings to current and
  prospective students for GE programs that are at risk of a loss of
  Title IV eligibility due to having failed one of the metrics in one
  of the two most recent award years for which the program received
  metrics, content and delivery of which to be specified by the DOE,
  and provide that students must acknowledge having seen these
  warnings before the institution may enter into an enrollment
  agreement with the student or disburse any Title IV funds.

Reporting Deadlines

• Institutions will have the ability to start reporting FVT/GE
  data through a new DOE system starting July 1, 2024.




• Institutions will have until October 1, 2024, to provide all
  required reporting.




• Following the initial reporting, institutions must report data
  annually by October 1 following the end of the award year (e.g.,
  October 1, 2025, for the 2024-2025 award year), unless the DOE
  establishes a different reporting date.

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