DISCLAIMER
• The Views Expressed In This Presentation Are Those Of The
Speaker(s) Only.
• The Contents Of This Presentation Does Not Constitute Legal
Or Regulatory Advice. No One Should Act Or Refrain From
Acting On The Basis Of This Presentation Without Seeking
Individualized, Professional Counsel As Appropriate.
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KEY DATES
January 31, 2015: Deadline for use of updated GE Disclosure template for 2013-14
disclosures (utilizing disclosures under current regulation).
[May 20, 2015: Hearing in APSCU v. Duncan]
July 1, 2015: Effective Date of Final Rule; all GE Program reporting data due for
2008/2009 Award Year through 2013/2014 Award Year. [Programs with medical
and dental residencies report 2007/2008 also]
October 1, 2015: GE Program reporting data due for 2013/2014 Award Year.
December 31, 2015: Program Certification deadline for all GE Programs (more
information from ED on mechanics to be released).
• Schools receive list of completers based on GE data submitted
• Schools may challenge completer list data
• Schools receive median/mean earnings information from SSA (no challenge)
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KEY DATES
[Summer 2016] – Draft D/E Rates Released – Rates and backup up detail will be
distributed to schools by NSLDS.
• Challenge period for draft rates begins, then …
• Final Rates issued, then …
• Schools may notify ED of intent to submit Alternate Earnings Appeals within 14
days with documents due within 60 days.
* Become familiar with challenge and appeals time frames and procedures now.
January 1, 2017 – New GE Disclosures contained in Final Rule required to be
implemented (updated template will be issued by ED prior).
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GE REPORTING
•
•
ED’s 1/13/15 and 1/15/15 Webinars on GE Reporting are posted – slides, audio
and transcripts: IFAP/Gainful Employment Information Website
NSLDS and SAIG data transmission functionality is now LIVE
• NSLDS: GE Submittal Spreadsheet Upload or GE Online Add
• SAIG: Batch File
•
Updated NSLDS GE User Guide and Instruction Guide has been posted
•
Spreadsheet template for use with NSLDS data transmission has been posted
(spreadsheet use voluntary, not required)
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GE REPORTING
•
Only submit data on students enrolled in GE Program (note: not just
completers)
•
Only submit data on Title IV aid recipients (excluding FWS only recipients)
•
Only submit for GE programs that exist as of July 1, 2015
•
Date provided by schools in 2011 is not available for re-use and no longer
accessible through ED
•
Get started now!!
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1.
CONSEQUENCES
GE Programs lose T4 eligibility for 3 calendar years when:
• it fails both D/E rates in any 2 out of 3 consecutive AYs for which rates are
calculated; or
• it is in the zone (or has a combination of zone & failing rates) for 4 consecutive
AYs for which rates are calculated.
• You Must give warnings when a GE Program could become ineligible for the next AY
• “This program has not passed standards established by the U.S. Department of
Education. The Department based these standards on the amounts students
borrow for enrollment in this program and their reported earnings. If in the future
the program does not pass the standards, students who are then enrolled may
not be able to use federal student grants or loans to pay for the program, and
may have to find other ways, such as private loans, to pay for the program.”
• Liability for misrepresentations made on required GE Disclosures.
•
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1.
D/E RATES
Annual Earnings Rate:
Discretionary Earnings Rate:
“Annual Loan Payment”
“Annual Loan Payment”
“Annual Earnings”
“Discretionary Income”
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1. D/E RATES - THRESHOLDS
For each GE Program offered by an institution, ED calculates for each Award Year (AY) both an
Annual Earnings Rate and Discretionary Income Rate for the applicable Two-Year or Four-Year
Cohort.
PASS: Annual Earnings Rate is less than or equal to 8% OR Discretionary Income
Rate is less than or equal to 20%
ZONE: Annual Earnings Rate is greater than 8% and less than or equal to 12% OR
Discretionary Income Rate is greater than 20% and less than or equal to 30%
FAIL: Annual Earnings Rate is greater than 12% or the denominator of the rate
(annual earnings) is zero AND Discretionary Income Rate is greater than 30%
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1.
2 YEAR AND 4 YEAR COHORTS:
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2.
WHAT IS A GE PROGRAM?
Nearly all educational programs at for-profit institutions of higher
education AND most non-degree programs at public and private nonprofit institutions such as community colleges.
“Institution of higher education” is the institution as it is known to ED
by its Office of Postsecondary Education ID number (OPEID)
(including main and additional locations).
The GE Rule applies to GE Programs offered by the IHE: “An
educational program identified by a combination of the institution’s sixdigit Office of Postsecondary Education ID (OPEID) number, the
program’s six-digit CIP code as assigned by the institution or
determined by the Secretary, and the program’s credential level.”
34 CFR § 668.402.
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2.
WHAT IS A GE PROGRAM?
CIP Code: Classification of instructional program (CIP) code – A taxonomy of
instructional program classifications and descriptions developed by the U.S. Department
of Education’s National Center for Education Statistics (NCES). The CIP code for a
program is six digits. See http://nces.ed.gov/ipeds/cipcode
“Institutions are expected to identify a CIP code for their programs that represents the
occupations for which the institution has designed its program. The Bureau of Labor
Statistics (BLS) has developed a crosswalk that identifies the occupations (SOCs)
associated with the education and training provided by a program
(www.onetonline.org/crosswalk), and these would be “recognized occupations” for the
purposes of these regulations.”
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2.
WHAT IS A GE PROGRAM?
•
The same program offered by institutions with different OPEIDs are separate GE
Programs.
•
If the credential level and six digit CIP are the same, ED treats the programs as one
GE Program (without regard to program length). But a separate GE disclosure
template is required for same GE Programs of differing length.
•
Programs at different credential levels but same six digit CIP are different GE
Programs.
•
Programs with same credential level but different six digit CIP are different GE
Programs.
Note: New 34 CFR § 600.21(a)(11) requires IHEs to update their E-App within 10 days
regarding loss of eligibility of a GE Program; a change in the GE Program’s name, CIP or
credential level; or any updates to the required certification.
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2.
WHAT IS A GE PROGRAM?
“Substantially similar” programs: two GE Programs are substantially
similar to one another if they share the same four-digit CIP code
(without regard to credential level or program length). Institutions may
not establish a new program that shares the same four-digit CIP code as
a program that became ineligible or was voluntarily discontinued when
it was in the zone or failing within the last three years. An institution
may establish a new program with a different four-digit CIP code that is
not substantially similar to an ineligible or discontinued program, and
provide an explanation of how the new program is different when it
submits the certification for the new program.
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3.
DETERMINING THE APPLICABLE COHORT OF
STUDENTS FOR D/E RATE CALCULATION
Under the regulations, ED will create a list of students who completed a
GE program during the applicable cohort period from data reported by
the institution. The list will indicate whether the list is of students who
completed the program in the two-year cohort period or in the four-year
cohort period, and it will also indicate which of the students on the list
will be excluded from the D/E calculations under 34 § 668.404(e).
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3.
DETERMINING THE APPLICABLE COHORT
FOR D/E RATES
•
The institution can propose corrections to the student cohort list within
45 days of receipt (no second chances).
•
After receiving the institution’s proposed corrections, the Secretary will
notify the institution whether a proposed correction is accepted and will
use any corrected information to create the final list.
•
ED does not issue draft or final D/E rates for a GE program if fewer
than 30 students completed the program during the four-year cohort
period. In that case, the GE Program maintains the same pass/zone/fail
status that it had in the last award year for which a rate was calculated.
After four or more consecutive award years of no D/E rate calculation,
ED will disregard the previous D/E rates for any award year prior to that
four year period. 34 CFR § 668.403(c)(5).
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4.
ANNUAL LOAN PAYMENT
The “Annual Loan Payment” is the Numerator in the Annual Earnings Rate and Discretionary
Income Rate D/E Rates.
Under 34 CFR § 668.404(b)(1):
(i) The Secretary calculates the annual loan payment for a GE Program by determining the
median loan debt of the students who completed the program during the cohort period, based on:
the lesser of :
(a) the actual loan debt incurred by each student and
(b) the total amount of tuition and fees assessed the student for the student’s entire
enrollment in the GE Program AND the total amount of allowances for books,
supplies and equipment included in the student’s Title IV Cost of Attendance for each
award year the student was enrolled in the GE Program (or higher amount if assessed
by the institution).
(ii) Removing, if applicable, the appropriate number of highest loan debts as described in 34 CFR
§ 668.405(e)(2); and
(iii) Calculating the median (middle) of the remaining amounts.
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4.
ANNUAL LOAN PAYMENT – LOAN
DEBT
34 CFR § 668.404(d) (1) - In calculating actual loan debt, the Secretary includes—
(i) The amount of Title IV loans that the student borrowed (total amount disbursed less any
cancellations or adjustments) to attend the GE Program (Federal PLUS Loans, Direct
PLUS Loans, and Direct Unsubsidized Loans that are converted TEACH Grants are
excluded);
(ii) Any private education loans (as defined in 34 CFR § 601.2) that the student borrowed
for enrollment in the GE Program; and
(iii) The amount outstanding, as of the student’ completion date, on any other credit
(including any unpaid charges) extended by or on behalf of the institution for enrollment in
any GE program attended at the institution that the student is obligated to repay after
completing the GE program.
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4.
ANNUAL LOAN PAYMENT – LOAN DEBT
ATTRIBUTION
34 CFR § 668.404(d)(2) -- The Secretary attributes all of the loan debt incurred by the student,
and attributes the amount reported for the student under § 668.411(a)(2)(iv) and (v), for
enrollment in any(i) Undergraduate GE program at the institution to the highest credentialed undergraduate GE
program subsequently completed by the student at the institution as of the end of the most
recently completed award year prior to the calculation of the draft D/E rates under this section;
and
(ii) Graduate GE program at the institution to the highest credentialed graduate GE program
completed by the student at the institution as of the end of the most recently completed award
year prior to the calculation of the draft D/E rates under this section.
The Secretary excludes any loan debt incurred by the student for enrollment in programs at other
institutions. However, the Secretary may include loan debt incurred by the student for enrollment
in GE Programs at other institutions if the institution and the other institutions are under common
ownership or control, as determined by the Secretary in accordance with 34 CFR § 600.31.
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4.
ANNUAL LOAN PAYMENT –
AMORTIZATION OF LOAN DEBT
10 Year Repayment Period
•
•
•
•
15 Year Repayment Period
Bachelor's degree
Master’s degree
20 Year Repayment Period
Doctoral or first-professional degree
undergraduate certificate
post-baccalaureate certificate
an associate degree
graduate certificate (including postgraduate certificate)
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4.
ANNUAL LOAN PAYMENT –
AVERAGE ANNUAL INTEREST RATE
34 CFR § 668.404(b)(2) (ii) – In calculating Annual Loan Payment, the Secretary uses an annual interest rate that
is the average of the annual statutory interest rates on Federal Direct Unsubsidized Loans that were in effect
during-(A) The three-year period prior to the end of the cohort period, for undergraduate certificate, post-baccalaureate
certificate, and associate degree programs. For these programs, the Secretary uses the Federal Direct
Unsubsidized Loan interest rate applicable to undergraduate students;
(B) The three-year period prior to the end of the cohort period, for graduate/post-graduate certificate and master’s
degree programs. For these programs, the Secretary uses the Federal Direct Unsubsidized Loan interest rate
applicable to graduate students;
(C) The six-year period prior to the end of the cohort period, for bachelor’s degree programs. For these programs, the
Secretary uses the Federal Direct Unsubsidized Loan interest rate applicable to undergraduate students; and
(D) The six-year period prior to the end of the cohort period, for doctoral programs and first professional degree
programs. For these programs, the Secretary uses the Federal Direct Unsubsidized Loan interest rate applicable
to graduate students.
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5.
ANNUAL EARNINGS
34 CFR § 668.404(c)
(1)
The Secretary obtains from the Social Security Administration (SSA),
under §668.405, the most currently available mean and median annual
earnings of the students who completed the GE program during the
cohort period and who are not excluded from the cohort; and
(2)
The Secretary uses the higher of the mean or median annual earnings
to calculate the D/E rates.
•
For the 2014-15 Award Year D/E Rates, ED will use 2014 SSA earnings data.
•
D/E rates are not calculated by ED for a GE Program if the SSA is unable to
provide the mean and median earnings for the program (and if there are fewer
than 30 completers in both the 2Y and 4Y cohorts)
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6.
DISCRETIONARY INCOME
Discretionary Income: Annual Earnings minus (1.5 x Poverty
Guideline for single person)
•
The Secretary applies the Poverty Guideline for the calendar year immediately
following the calendar year for which annual earnings are obtained. For example, for
the 2014-15 Award Year, the Secretary uses 2014 SSA earnings data and the 2015
Poverty Guideline (which reflects price changes in 2014).
•
Poverty Guideline available at http://aspe.hhs.gov/poverty
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7.
TRANSITIONAL RATES
34 CFR § 668.404(g)
If a GE Program is failing or in the zone based on its draft D/E rates for any award
year during the transition period, the Secretary calculates transitional draft D/E rates
for that award year by using:
(i) The median loan debt of the students who completed the program
during the most recently completed award year (i.e., for AY 2014-15 D/E
rates, data from completers in 2014-15 AY); and
(ii) The earnings used to calculate the draft D/E rates.
For any award year for which the Secretary calculates transitional draft D/E rates for
a program, the Secretary determines the final D/E rates for the program based on the
lower of the draft or transitional draft D/E rates. An institution may challenge or
appeal the draft or transitional draft D/E Rates, or both, under the procedures in §
668.405 and § 668.406, respectively.
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8.
CERTIFICATIONS
34 CFR § 668.414 - An institution must establish the eligibility of a GE Program
listed on its Eligibility and Certification Approval Report (ECAR) through
certification:
→For Each GE Program
→By Institution’s Most Senior Executive Officer
An institution must update the certification through the ECAR within 10 days if there
are any changes in the approvals for a program, or other changes for a GE Program,
that make an existing certification no longer accurate.
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8.
CERTIFICATION
The institution certifies that:
(1) Each GE Program is approved by a recognized accrediting agency or is included
in the institution’s grant of accreditation;
(2) Each GE Program programmatically accredited, if required by a Federal
governmental entity/State governmental entity.
(3) Each GE program it satisfies the educational prerequisites for professional
licensure or certification for the State in which the institution is located; and
(4) New GE programs are not substantially similar to a program offered by the
institution that became ineligible for Title IV under the D/E rates, or was
discontinued while failing, or in the Zone.
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8.
CERTIFICATIONS
ENFORCEMENT RISKS RELATED TO CERTIFICATIONS – FROM PREAMBLE:
•
•
•
•
•
“The certification requirements have the added benefit of creating an enforcement
mechanism for the Department to take action if a required approval has been lost, or if a
certification that was provided was false”
“Federal and State law enforcement agencies may be able to prosecute any
misrepresentations made by institutions in their own investigations and enforcement
actions”
“An important goal of the certification requirements is to ensure that institutions assess on
an ongoing basis whether their programs meet all required Federal, State, and accrediting
standards.”
“If a program does not meet the certification requirements in any State where an institution
is located, then the program as a whole would be considered deficient and could not be
certified.”
False Claims Act risk based on certifications as part of PPA.
Certifications are an entirely separate accountability metric that goes to GE program eligibility separate and apart from D/E
rates with the potential for serious consequences for false or inaccurate certifications.
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8.
CHALLENGES/APPEAL
34 CFR § 668.405
• If a GE Program is failing or in the zone, an IHE may file an alternate
earnings appeal. That alternate earnings data must be for the same calendar
year as the SSA data.
• Notice of intent to file the appeal must be filed with ED no later than 14 days
after issuance of Notice of Determination including final DTE rates. All
documentation must be submitted no later than 60 days after the Notice of
Determination.
• The IHE may submit alternate earnings from: (1) an institutional survey
(using a survey consistent with a survey form to be developed by NCES) that
is accompanied by an auditor’s attestation or (2) from a State-sponsored data
system.
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9.
•
•
•
•
•
•
•
•
COMPLIANCE RECOMMENDATIONS
Start preparing GE Program reporting data now if you have not yet started.
Develop an internal system to collect and store all required GE Program data,
including information necessary to estimate D/E rates.
Evaluate whether GE Program CIP and related SOC codes are accurate.
Remove any inactive GE Programs on E-App by July 1, 2015 and add any new
accreditor, state approved GE Programs that will be offered as of July 1, 2015.
Implement graduate employment surveys to collect job titles, student salary, employer
and other relevant GE Program rate information. Continue surveys for at least 4
years post-graduation.
Develop policies and procedures to regularly review GE Program disclosures
(including website and marketing collateral) to ensure information is compliant.
Continue student counseling on repayment of debt.
Develop in-house expertise on the GE Rule to back up and oversee any third party
assistance: ultimate responsibility is with the institution.
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PETER LEYTON
Peter is co-founder of the Washington, D.C. area law firm of
Ritzert & Leyton, P.C. and head of the firm’s education practice
group. Since 1980, Peter has represented many institutions of
higher education, publicly traded companies, private
investment groups and others with respect to resolving
regulatory/compliance matters as well as with respect to
achieving desired transactional results through mergers,
acquisitions and reorganizations. The firm has eight attorneys
involved in work involving the postsecondary education sector
and is regularly involved with the U.S. Department of Education
(DOE), national, regional and programmatic accrediting
agencies, state licensing and other regulatory agencies and
other third parties. Peter has served three two-year terms on
the Association of Private Sector Colleges and Universities and
predecessor board of directors. He received his law degree
from Catholic University School of Law in 1980, a master's
degree in public administration from American University in
1974, and a bachelor's degree in political science from Antioch
College in 1971.
Ritzert & Leyton, P.C., 11350 Random Hills Road, Suite 400,
Fairfax, Virginia 22030; pleyton@ritzert-leyton.com; (703) 9342660
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