In a significant development, the U.S. Department of Education (the Department) announced that the implementation of Gainful Employment (GE) requirements, which were initially set to take effect in October 2024, will now be delayed until January 2025. This decision grants institutions more time to prepare for compliance, ensuring that their programs meet the necessary standards of quality and transparency that are crucial for protecting students and taxpayers alike.
This postponement presents a valuable opportunity for schools to review and refine their data, ensuring they are fully prepared for the regulations. Below, we’ll explore the implications of the delay, some best practices for data management, and frequently asked questions regarding Gainful Employment compliance.
What Are Gainful Employment Requirements?
The Gainful Employment rule is a federal regulation aimed at ensuring that career-oriented programs—primarily at for-profit institutions and non-degree programs at public and nonprofit colleges—are effectively preparing students for gainful employment. Under this rule, schools must demonstrate that graduates are earning enough to manage their student loan debt.
To comply, institutions should gather and review information to have a better chance of determining what programs might fail and plan for future programs that could succeed. This includes:
– The debt-to-earnings ratio of graduates
– Employment rates post-graduation
– Graduation rates
– Earnings and loan repayment outcomes
If programs fail to meet the debt to earnings and premium earnings metrics, they risk losing eligibility for federal financial aid for three award years, which could be devastating for many institutions and their students.
Why the Delay?
The Department’s decision to delay the implementation of GE requirements until January 2025 follows feedback from institutions, a letter from senators requesting additional time to adapt to the new rules, and actual problems with the information provided by the department to the schools. While many schools have already started the data collection and reporting process, the additional time allows for more thorough preparation and compliance.
The extra time gives schools the opportunity to:
1. Review and Scrub Data: Ensuring data accuracy is crucial, as mistakes or gaps could jeopardize program eligibility.
2. Implement Changes: Schools may need to adjust program offerings or student support to ensure future compliance with GE standards.
3. Conduct Internal Audits: An internal review process can help identify potential issues before submitting data to the Department.
Best Practices for Data Preparation
Given the high stakes of Gainful Employment compliance, it’s essential that schools approach this delay strategically. Here are some best practices to guide the process:
1. Centralize Data Management
Create a centralized system for managing student data. This ensures that all relevant information, from earnings data to debt levels, is accessible and consistent across the institution.
2. Conduct Data Audits
Regularly audit your data to ensure accuracy and completeness. Pay close attention to NSLDS enrollment reporting information, graduate earnings, employment outcomes, and student loan data. These audits should include a review of internal processes for data collection and reporting.
3. Collaborate Across Departments
Work with various departments, including financial aid, career services, and academic programs, to ensure that all relevant data is accurate and up-to-date. Cross-departmental collaboration can help identify discrepancies early on.
4. Leverage External Data Sources
Use reliable third-party data sources to validate your internal data. This could include wage data from state or federal agencies, industry reports, or other credible sources to benchmark your graduates’ earnings.
5. Prepare for Reporting
Ensure that your institution has the necessary infrastructure and tools to meet the Department’s reporting requirements. This could include updating software systems, training staff, and ensuring compliance with any additional technical guidelines provided by the department.
6. Monitor Ongoing Performance
Even before the rules take effect, monitor your programs’ performance in terms of debt-to-earnings ratios and employment outcomes. Early identification of at-risk programs can give you time to make necessary adjustments for future reports.
Frequently Asked Questions (FAQs)
1. What types of programs are affected by the Gainful Employment rules?
Primarily, the Gainful Employment rules affect for-profit colleges and certificate programs at public and nonprofit institutions. Most degree programs at public or nonprofit colleges are not subject to the GE rule, but non-degree programs are.
2. What is the debt-to-earnings ratio, and how is it calculated?
The debt-to-earnings (D/E) ratio is a measure of whether graduates of a program can reasonably repay their student loan debt given their earnings. It’s calculated by dividing a typical graduate’s annual loan payment by their annual earnings. Programs must meet certain thresholds to remain eligible for federal aid.
3. What happens if a program fails the Gainful Employment requirements?
Programs that fail the debt to earnings (D/E) ratio thresholds or other earnings premium (EP) metrics risk losing eligibility for Title IV federal financial aid.
4. What should institutions be doing right now to prepare?
Even with the delay, schools should use the extra time to audit their data, review program performance, and ensure the data submitted is accurate before the January 15, 2025 deadline. Regular monitoring and internal audits can help avoid last-minute scrambles and ensure accuracy.
Final Thoughts
The postponement of the Gainful Employment requirements offers schools a golden opportunity to refine their data collection processes and ensure they are fully prepared for reporting. By following best practices and staying proactive, institutions can minimize the risk of non-compliance and continue offering valuable educational programs that truly benefit their students.
January 2025 may seem far off, but the work required to comply with Gainful Employment rules is significant. Schools should use this time wisely to set themselves up for success.
By taking proactive steps now, institutions can make the most of this delay, ensuring that they not only meet federal requirements but also provide accurate information.
By Sally Samuels and Outlined by AI
Director of Compliance, Fame
Webinar FAQs
What is the ED site? NSLDS?
U.S. Department of Education: https://www2.ed.gov/. National Student Loan Data System: https://nsldsfap.ed.gov/login
Where would you find the template to use?
You can download from ED site under gainful employment after login to the site.
What is the website that we enter the GE information into?
NSLDS: National Student Loan Data System (ed.gov)
My GE Data Check report is locked. How do I get access?
Please contact support to open it up. We had to lock per permission as it consists of personal information. Fame Help Center
Will there be something from Freedom Software Information System that explains step by step?
Yes, please follow this link to learn more: https://support.fameinc.com/hc/en-us/articles/29935982683661-Gainful-Employment-Update-2024
I have not received any information or reports from ED. How do I go about getting that information? I know it is supposed to be delivered to our SAIG mailbox, does that mean the mailbox we monitor or the one FAME monitors?
From the SAIG mailbox: you need to go to NSLDS and download it.
With a Main Campus and an Additional location, do we run separate reports and manually combine?
Yes, run separate reports and then the two locations must be manually combined.
When it said that we should "work" on the completers list, what specifically should we be looking for on this list?
Compare the list to the students that were enrolled and received Title IV aid during that timeframe. You are comparing enrollment reporting.
If our school has begun working on the completers list, did you say we should wait working on the Gainful Employment because there will be an update to all completer's lists?
You can still review the information to determine what you have is correct and who might be missing, then some of the work is done.
What if the location that we share OPEID closed as of Dec 2023, do they still get reported?
Yes, the students would be combined with the other campus.
For standard, we are running reports for award years 17/18 through 23/24?
You are reporting information for several years, completers for standard is 2015/16 through 2018/19.
What does it mean by "Student's enrollment status as of the first day of the student's enrollment in the program?
Student’s enrollment status as of the first day of the student’s enrollment in the program? – The student’s program enrollment status code as of the 1st day in the program.
Valid values are:
‘F’: Full-Time
‘Q’: Three-Quarter Time
‘H’: Half-Time
‘L’: Less Than Half-Time”
What does it mean by "Student's enrollment status as of the first day of the student's enrollment in the program?
Full-time, Part-Time.
How do you know which reporting you should use between standard and traditional?
Look at costs, debt, and employment possibilities for the years involved.
What does TA and AA mean?
TA – Total amounts – students who withdrew or graduated program within reporting period.
AA – Annual amounts – Student who attended school as of 06.30 reporting period.
Please give an example of a non-GE program.
An associate degree program that transfer to a degree program at a public non-profit school. All programs are GE at private career schools.
Is the 2023-24 report from 7/1/2023 to 6/30/24?
Yes, that is correct.
If we pick traditional, but want to switch to transitional later for another reporting year is that possible?
No, you can change up before January 2025, after that you must use the same type for the next six years, can’t switch back and forth.
Why would Freedom SIS report have Out-of-State (OS) for resident status for our programs?
As per U.S. Department of Education Specs – if a school does not offer In-State or Out-of-State tuition then it must be reported as Out of State – OS.
The statements above are the opinion of the author and are not intended to be legal advice.
