(GEN-24-04) Regulatory Requirements for Financial Value Transparency and Gainful Employment (Updated Sept. 16, 2024)

Publication Date
March 29, 2024
DCL ID
GEN-24-04
Subject
Regulatory Requirements for Financial Value Transparency and Gainful Employment (Updated Sept. 16, 2024)
Summary
This letter provides an overview of the Financial Transparency and Gainful Employment provisions scheduled to be implemented on July 1, 2024.

Note

Update on Sept. 16, 2024: The Department has updated the deadlines for both FVT/GE reporting and evaluation of Completers Lists to January 15, 2025. Please see Electronic Announcement GE-24-08 for more information.

Update on Aug. 26, 2024: We have revised the Cohort Periods section of this Dear Colleague Letter to clarify which award years are used in calculating Debt-to-Earnings (D/E) rates in the second and subsequent rounds of calculations for programs using transitional reporting.

Update on May 28, 2024: We have revised the Reporting Requirements section of this Dear Colleague Letter to clarify reporting exclusions due to a small number of completers in a set of substantially similar programs and how reporting might vary depending on whether a set of programs initially qualified for an exclusion but later did not.

Dear Colleague:

On October 10, 2023, the Secretary published final regulations in the Federal Register (88 FR 70004) 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 and Gainful Employment regulations are scheduled to be implemented on July 1, 2024.

Below we list the major provisions of the Financial Value Transparency and Gainful Employment regulations and then provide more detailed summaries. Note that this letter provides only an overview of the requirements. Detailed information is provided in the final regulations, and the Department plans to publish additional policy and operational guidance to support institutions in their implementation efforts.

Applicability of the FVT/GE Regulations

The Financial Value Transparency (FVT) regulations and the Gainful Employment (GE) regulations are separate sets of requirements that apply to different types of educational programs.

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 (Title IV) eligible programs. These 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. These requirements apply to both Gainful Employment Programs (GE Programs) and Eligible Non-GE Programs, but do not affect program eligibility for Non-GE programs.

The GE regulations establish an accountability framework for GE Programs that uses the same earnings premium and debt-to-earnings measures to determine whether a GE program remains eligible for Title IV funds. These requirements can affect program eligibility and apply only to GE Programs. The GE regulations do not apply to Eligible Non-GE Programs.

Definitions of GE Programs and Eligible Non-GE Programs

Both GE Programs and Eligible Non-GE Programs are identified by a combination of an institution's six-digit OPEID number, the program's six-digit Classification of Instructional Programs (CIP) code, as assigned by the institution or determined by the Secretary, and the program's credential level (e.g., associate’s degree or bachelor’s degree). A GE Program or an Eligible Non-GE Program could include multiple eligible programs, as defined under 34 CFR 668.8, if the institution offers multiple distinct programs that have the same six-digit CIP code and credential level.

Programs that are Neither GE Programs nor Eligible Non-GE Programs

The following types of Title IV-eligible programs or coursework are considered neither GE programs nor Eligible Non-GE Programs. They are not subject to reporting or any other requirements in these regulations:

Eligible Non-GE Programs

Eligible Non-GE Programs include all Title IV eligible programs, including degree programs, at public, private non-profit, and proprietary institutions, with the exceptions described above.

GE Programs

All nondegree 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 and prison education programs.

All educational programs offered by for-profit (proprietary) institutions are GE Programs except for CTP programs and a limited number of bachelor’s degree programs in liberal arts if the institution has been regionally accredited since October 2007 and the program has been offered by the institution since January 2009 under 34 CFR 600.5(a)(5)(i)(B). These bachelor’s degree programs in the liberal arts offered by proprietary institutions are Eligible Non-GE Programs, but are not GE Programs.

Some institutions offer degree programs where students may also be awarded a non-degree credential (e.g., certificate, diploma) after completing a portion of the degree program. Such programs are generally not considered GE Programs at non-profit and public institutions. However, a program where a significant number of the students enrolled in the program do not actually earn the degree and withdraw after obtaining the certificate may be, upon review, determined to be a non-degree program. In that case, the certificate program would then be considered a separate GE Program.

Institutional Exclusions

There are two situations in which institutions and all their programs are excluded from some or all of the FVT/GE requirements:

  • Institutions with no groups of substantially similar programs (same four-digit CIP prefix) that produced at least 30 total completers over the preceding four award years are not subject to any of the FVT or GE provisions.

  • Institutions with main campuses located in a U.S. Territory or the Freely Associated States are excluded from the GE accountability provisions and most financial value transparency provisions but must still meet reporting requirements under 34 CFR 668.408.

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 § 668.43(d), 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 postgraduation 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 Department 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 –

  • Do not impact the eligibility of Eligible Non-GE programs;

  • Require institutions to report information about students who enrolled in each of the institutions’ Eligible Non-GE programs and GE programs to enable the Department 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 Department may disclose.

  • Exclude students from consideration in either measure if they are enrolled in 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 Department 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 Department’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 Department 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 Department, 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.

Effective Dates

Most of the provisions in the FVT/GE regulations are effective July 1, 2024. Requirements for acknowledgements and warnings, and the establishment of the Department’s disclosure website, are effective July 1, 2026.

Reporting Requirements

The FVT/GE regulations require institutions to annually report two types of data to the Department: program-specific information and student-specific information. Institutions must provide this information for each eligible program if they have any program with a total of at least 30 completers over the four most recently completed award years within any group of substantially similar programs. Substantially similar is defined as all programs in the same four-digit CIP code at an institution.

Exclusions From Reporting Due to Small Numbers of Completers in a Set of Substantially Similar Programs

For any group of substantially similar programs (same four-digit CIP prefix), an institution would not have to report any data for the FVT/GE requirements if there were fewer than 30 total completers over the preceding four award years under 34 668.401(b)(2) and 668.408(a).

If in a later award year, an institution has 30 total completers over the preceding four award years, then the institution would report the necessary information for previous award years for these programs. If this occurs in the 2024-25 reporting cycle, a school that previously elected to use transitional reporting would have to report data for 2021-22 that would not otherwise have been reported.

For a set of programs that initially qualify for the exclusion but later must report, here is an example of how that pattern may apply. Note that institutions will not have to double-report for any award years, so it is possible that an institution will have fewer than four years of reporting related to past award years to complete depending on previous reporting patterns.

Sample distribution for the four most recently completed award years for program 1234xx:

2023-2024 reporting cycle:

Award Year

2020-2021

2021-2022

2022-2023

2023-2024

Completer Count

5

5

5

5

Action

Don’t report in
23-24

Don’t report in
23-24

Don’t report in
23-24

Don’t report in
23-24

2024-2025 reporting cycle:

Award Year

2021-2022

2022-2023

2023-2024

2024-2025

Completer Count

5

5

5

16

Action

Report in 24-25

Report in 24-25

Report in 24-25

Report in 24-25

2025-2026 reporting cycle:

Award Year

2022-2023

2023-2024

2024-2025

2025-2026

Completer Count

5

5

16

1

Action

Already reported in 24-25

Already reported in 24-25

Already reported in 24-25

Don’t report
in 25-26

2026-2027 reporting cycle:

Award Year

2023-2024

2024-2025

2025-2026

2026-2027

Completer Count

5

16

1

10

Action

Already reported in 24-25

Already reported in 24-25

Report in 26-27

Report in 26-27

Program-Specific Information

The Department plans to require institutions to provide the following information at the program level:

  • The name of the program;

  • The program’s CIP code (six-digit);

  • The program’s credential level (e.g., bachelor’s degree or first professional degree);

  • The program’s published length (defined in weeks, months, or years as published by the school);

  • Published program length unit of measurement (i.e., weeks, months, or years);

  • Total number of weeks in the program’s Title IV academic year;

  • Whether the program is programmatically accredited and, if so, the name of the agency that accredits the program;

  • The States in the metropolitan statistical area in which the institution’s main campus is located where the program does or does not prepare students for licensure;

  • The total number of students enrolled in a program during the most recently completed award year;

  • The total number of graduates who took a licensure exam in the most recently completed award year;

  • The total number of program graduates who passed a licensure exam in the most recently completed award year;

  • Whether the program is a bachelor’s degree programs in liberal arts and 1) the institution has been regionally accredited since October 2007; 2) the program has been offered by the institution since January 2009; and 3) the institution offering the program is a proprietary institution; and

  • Whether the program is a “qualifying graduate program” (defined below).

Final reporting requirements will be provided in operational guidance prior to implementation of the regulations.

Student-Specific Information

To the extent possible, the Department will use administrative data that has already been reported by institutions, such as enrollment reporting and federal loan information in the National Student Loan Data System (NSLDS) to calculate the D/E and EP measures. However, the Department needs additional student-specific information from institutions to calculate the D/E and EP measures and to calculate other information that the Department will disclose to students.

Therefore, institutions must report specific information for each student who received Title IV funds for enrollment in a GE or an Eligible Non-GE Program during an award year. The reporting includes information about each student’s enrollment in the program, the amounts of private or institutional loans and other financing received by the student for that enrollment, the amount of institutional grant or scholarship funds received by the student, as well as the amount that was assessed the student for tuition and fees and for books, supplies, and equipment.

While the D/E and EP measures include only those students who received Title IV aid and who completed the program during the applicable cohort period, institutions must report information for all students who received Title IV aid and were enrolled in the GE program during the applicable award years, including those who did not complete the program. This is because the reported information is used by the Department not only for the purpose of calculating the D/E and EP measures, but also for calculating some of the other information the Department will disclose on its website beginning in 2026.

Institutions are required to report information for students who were enrolled at the end of the most recently-completed award year and for students who completed the program or withdrew during the standard or transitional periods.

An institution must determine whether it will use standard or transitional periods for reporting at the time that it first reports data to the Department. The choice of standard or transitional period must be made for the entire institution and cannot be changed once it has been selected. Schools that choose transitional reporting will use that reporting method for the first six years that the regulations are in effect. Schools that choose standard reporting will be expected to provide data for all the years during the cohort period.

For currently enrolled students as of the end of the most recently completed award year, institutions are required to report the following information only for the most recently completed award year:

  • Information needed to identify the student;

  • The date the student initially enrolled in the program;

  • Whether the student is enrolled in a CTP program;

  • Whether the student was enrolled in a prison education program or was incarcerated and enrolled in a program under the Second Chance Pell experiment;

  • The student’s enrollment status code as of the first day the student was enrolled in the program (e.g., full-time, half-time, etc.);

  • The enrollment status of the student in the program for the award year being reported;

  • The student’s total annual cost of attendance for the award year being reported;

  • The total tuition and fees assessed to the student for the award year being reported;

  • The student’s residency tuition status by State or district for the award year being reported (e.g., in-district, in-State, or out-of-State);

  • The student’s total annual allowance for books, supplies, and equipment from their Cost of Attendance (COA) for the award year being reported;

  • The student’s total annual allowance for housing and food from their COA for the award year being reported;

  • The amount of institutional grants and scholarships disbursed to the student during the award year;

  • The amount of other State, Tribal, or private grants or scholarships disbursed to the student during the award year; and

  • The amount of any private education loans disbursed to the student for enrollment in the program that the institution is, or should reasonably be, aware of, including private education loans made by the institution.

For students who withdrew from or completed the program during the applicable period, the institution must report the following:

  • Whether the student withdrew from or completed a CTP program;

  • Whether the student was enrolled in a prison education program or was incarcerated and enrolled in a program under the Second Chance Pell experiment;

  • The date the student completed or withdrew from the program;

  • The total amount the student received from private education loans for enrollment in the program;

  • The total amount of institutional debt the student owes to the institution or to a party that extended an amount on behalf of the institution after completing or withdrawing from the program;

  • The total amount of tuition and fees assessed the student for the student’s entire enrollment in the program;

  • The total amount of the allowances for books, supplies, and equipment included in the student’s COA for each award year in which the student was enrolled in the program, or a higher amount if assessed the student by the institution for such expenses; and

  • The total amount of institutional grants and scholarships provided for the student’s entire enrollment in the program.

Additional information will be provided on the specific items that schools are required to report and the process for reporting to the Department when operational guidance and technical specifications for FVT/GE reporting are published, no later than April 2024.

Reporting Deadlines

Initial Reporting: As described in an Electronic Announcement, we have announced some flexibilities to the timing for required data reporting for FVT/GE.

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

  • Institutions will have until October 1, 2024, to provide all required reporting. The Department is providing institutions additional time to report such information by allowing institutions to submit the information that was previously due by July 31, 2024, to be submitted by no later than October 1, 2024.

Subsequent Reporting: Following this 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 Secretary establishes a different reporting date.

Completers Lists

The Department will use administrative data from NSLDS to compile a draft list of completers to use for creating the cohorts for obtaining earnings data, and identify completers who would fall under one of the exclusions in 34 CFR 668.403(e) and 668.404(c). The list will be provided to institutions, who will have 60 days to make any corrections to their data in NSLDS, before the Department submits the information to a Federal agency with earnings data (currently the Internal Revenue Service or IRS). Once the Department has received median annual earnings data for programs, those amounts will be used in calculating D/E rates and the EP measure.

Futher information on the timing of this process and on how to review and correct completers lists will be published to Partner Connect’s Knowledge Center as the review period approaches.

Common Elements of D/E Rates and EP Measures

Cohort Periods

Under 34 CFR 668.402 and 668.403, the Department calculates D/E and EP measures using the debt and earnings of students who completed the program during a specified cohort period. Depending on the number of students who completed the program, the cohort period will either be two years or four years.

For programs that are not qualifying graduate programs, the two-year cohort consists of the students who completed the program during the third and fourth award years prior to the calendar year we use for earnings data in calculating the D/E and EP measures. The four-year cohort consists of the students who completed the program during the third, fourth, fifth, and sixth award years prior to the calendar year we use for earnings data in calculating the D/E and EP measures. For example, for D/E and EP measure calculations during the 2023-24 award year for programs that are not qualifying graduate programs, the two-year cohort period will be award years 2017-18 and 2018-19, and the four-year cohort period will be award years 2015-16, 2016-17, 2017-18, and 2018-19. We remove from the two-year cohort period or the four-year cohort period any students who qualify for an exclusion (described below).

For qualifying graduate programs, the two-year cohort consists of the students who completed the program during the sixth and seventh award years prior to the calendar year we use for earnings data in calculating the D/E and EP measures. The four-year cohort for such programs consists of the students who completed the program during the sixth, seventh, eighth, and ninth award years prior to the calendar year we use for earnings data in calculating the measures.

Note that for institutions using transitional reporting for the first six years that the regulations are in effect, to calculate D/E rates for the institution’s programs, the Department will use earnings for the students from the appropriate cohort period but will use debt information for different students from the most recently completed award years covered by transitional reporting. If a program has at  least 30 completers in the two most recently completed award years (award years  2022-23 and 2023-24 in the first round of calculations), a two-year cohort will  be used in median debt calculations. In subsequent calculation years, as  reporting data covers more award years, if a program does not have at least 30  completers in the two most recently completed award years, any reporting data  from the four most recently completed award years may be used. For example,  after schools using transitional reporting submit their data for award year  2024-25, there will be completer data available for award years 2022-23,  2023-24, and 2024-25 for the second round of calculations. If a program using  transitional reporting does not have at least 30 completers in award years  2023-24 and 2024-25, data from award year 2022-23 would be added and the  Department would calculate median loan debt for the program if it had at least  30 completers in those three most recently completed award years.

Size of the Cohort

For D/E rates or the EP measure to be calculated for an award year, at least 30 students who received Title IV aid must have completed the program during the applicable cohort period. The two-year cohort will be used if 30 or more students (net of any excluded students) completed the program during that period. If fewer than 30 students completed the program during the two-year cohort period, the four-year cohort period will be used. If fewer than 30 students completed the program during the four-year cohort period, D/E rates and the EP measure will not be calculated for the program.

Qualifying Graduate Programs

A qualifying graduate program is a program whose students must complete required postgraduation training programs to obtain licensure to practice in the field. Such programs must be accredited by an agency that meets State requirements if a State has such requirements for licensure. In order to be considered a qualifying graduate program, at least half of a program’s graduates must obtain licensure in a State where the postgraduation training requirements apply.

For the 2023-24 through 2025-26 award years, such programs must also be in one of the following fields of study: medicine, osteopathy, dentistry, clinical psychology, marriage and family counseling, clinical social work, or clinical counseling. For the 2026-27 award year, and every three years thereafter, the Department will publish in the Federal Register a new list of graduate degree fields (based on credential level and CIP codes) that may contain qualifying graduate programs.

An institution must attest each award year that a program meets the requirements for a qualifying graduate program for the longer cohort period to apply to the program. This attestation is provided as part of an institution’s program-specific reporting, as described above.

Student Exclusions

A student is excluded from the numerator and the denominator of the D/E and EP calculations if:

  • One or more of the student’s Title IV loans qualify for a total and permanent disability (TPD) discharge;

  • The student enrolled full-time in any other eligible program at the same institution or another institution during the calendar year for which earnings were measured;

  • The student completed a higher-level undergraduate or graduate program at the institution (for undergraduate and graduate programs, respectively); or

  • The student died.

Additionally, the Department excludes students who are enrolled in programs that are not subject to the FVT/GE requirements, including students enrolled in:

  • Approved CTP programs;

  • Approved prison education programs;

  • Postbaccalaureate teacher certification programs where the institutions does not award a credential; and

  • Programs at least two academic years in length that are acceptable for full credit toward a bachelor's degree.

For the D/E rates, we exclude loan debt incurred by the student for enrollment in any program at any other institution. However, we may include loan debt incurred by the student for enrollment in programs at other institutions if the institutions are under common ownership or control.

Students may sometimes complete more than one GE program at different credential levels at the same institution. For example, a student might enroll in a one-year certificate program and, subsequent to completing that program, enroll in and complete an associate degree program at the same institution. To account for this, we attribute the loan debt from the lower-credentialed program to the higher-credentialed program completed by the student. This “rolling-up” of loan debt only happens if both programs are undergraduate programs or both are graduate programs.

If a student completes an undergraduate program and a graduate program at the same institution, the Department always treats the two as separate programs, even if the student graduated from both programs at the same time (for example, a dual-degree program). In these circumstances, the Department uses the same earnings data for both programs, but uses only graduate debt to calculate debt for the graduate program, and only undergraduate debt to calculate debt for the undergraduate program.

Annual Earnings

For both the D/E and EP measures, we calculate the annual earnings of students who completed a GE program using earnings information obtained from the federal agency with earnings data (currently the Internal Revenue Service, or IRS), pursuant to the process in 34 CFR 668.404 and 668.405, as described below.

First, for each award year, using information from NSLDS, we create a list of students who received Title IV aid and completed the program during the cohort period, including an indication of whether a student will be excluded, and we submit the list to the institution for its review. The institution then has 60 calendar days to correct their information in NSLDS. Upon completion of this process, we provide the institution with a final list that will be submitted to the IRS.

The IRS calculates and returns to the Department the median annual earnings of students for whom it was able to match earnings data. If the earnings data from the IRS includes reports from records of earnings on at least 30 completers, the Department uses the median annual earnings provided by the IRS to calculate the D/E rates and EP measure for each program.

If the IRS is unable to match one or more of the students on the final list, we exclude the same number of students with the highest loan debts as the number of students whose earnings the IRS did not match in calculating median loan debts. For example, if the IRS is unable to match three students out of 100 students, the Secretary orders by amount the debts of the 100 listed students and excludes from the D/E rates calculation the three largest loan debts.

The IRS does not provide the Department any individual earnings data or the identity of any students who were or were not matched because it is prohibited by law from doing so.

Debt-to-Earnings Measure

D/E Rates

For the purpose of the D/E rates, we calculate two separate rates: a discretionary income rate and an annual earnings rate.

Discretionary income rate = annual loan payment divided by the discretionary earnings, defined as the median annual earnings of the students included in the applicable cohort less 1.5 times the U.S. Department of Health and Human Services (HHS) Poverty Guideline corresponding to the calendar year for which earnings are obtained. The Poverty Guideline is currently published by HHS at https://aspe.hhs.gov/​poverty.

Annual earnings rate = annual loan payment divided by the median annual earnings of the students who completed the program in the applicable cohort.

The process for calculating the annual earnings of students in the cohort is described above.

Annual Loan Payment

The annual loan payment is calculated by determining the median loan debt of students who completed the program during the applicable cohort period and amortizing that loan debt. Median loan debt includes the amount of Title IV loans that the student borrowed for enrollment in the GE program and private education loans and the total amount outstanding, as of the date the student completed the program, on any other credit (including unpaid charges) extended by or on behalf of the institution that the student is obligated to repay. However, under 34 CFR 668.403(b)(1)(i), a student’s loan debt is capped at the lesser of:

  • The total amount of debt the student borrowed; or

  • The total amount for tuition, fees, books, supplies, and equipment for the student minus the amount of institutional grants and scholarships provided to the student.

Under 34 CFR 668.403(b)(2)(i), a GE program’s median loan debt is amortized:

  • Over a 10-year repayment period for a program that leads to an undergraduate certificate, a post-baccalaureate certificate, an associate degree, or a graduate certificate;

  • Over a 15-year repayment period for a program that leads to a bachelor’s or master’s degree; or

  • Over a 20-year repayment period for doctoral and first professional degree programs.

Under 34 CFR 668.403(b)(2)(ii), we calculate the annual loan payment using the average interest rate over a three-year or six-year period, depending on the length of the program. For undergraduate and graduate certificate programs, post-baccalaureate certificate programs, associate degree programs, and master’s programs, the average interest rate is calculated over a three-year period. A six-year period is used for bachelor’s degree programs, doctoral programs, and first professional degree programs. The average rate used for undergraduate programs is based on the interest rate on Federal Direct Unsubsidized Loans applicable to undergraduate students for the three- or six-year period. The average rate used for graduate programs is based on the interest rate on Federal Direct Unsubsidized Loans applicable to graduate students for the three- or six-year period.

Passing or Failing the D/E Rates

Under 34 CFR 668.402(c), a program passes the D/E rates if its discretionary income rate is less than or equal to 20 percent, its annual earnings rate is less than or equal to 8 percent, or the denominator (median annual or discretionary earnings) of either rate is zero and the numerator (median debt payments) is zero. 

A program fails the D/E rates if it fails both the annual D/E rate and the discretionary D/E rate. A program fails the annual D/E rate if it has a rate greater than 8 percent or if the denominator (median annual earnings) is zero and the numerator (median debt payments) is positive. A program fails the discretionary D/E rate if the rate is greater than 20 percent or if the denominator (median discretionary earnings) is negative or zero and the numerator (median debt payments) is positive.

Earnings Premium Measure

The EP measure compares the median annual earnings of graduates of the program to the “earnings threshold” for the program.

Earnings Threshold

The earnings threshold for each program is calculated as the median earnings of individuals with only a high school diploma or recognized equivalent, between the ages of 25 to 34, who are either employed or report being unemployed (i.e., looking and available for work), located in the State in which the institution is located, or nationally if the institution is a foreign institution or if fewer than 50 percent of students in the program are from the State where the institution is located.

The Department determines the earnings thresholds and publishes the thresholds annually through a notice published in the Federal Register. We make this determination using publicly available information from the Census Bureau.

Passing or Failing the EP Measure

Under 34 CFR 668.402(e), a program passes the EP measure if the median annual earnings of the students who completed the program exceed the earnings threshold.

A program fails the EP measure if the median annual earnings of the students who completed the program are equal to or less than the earnings threshold.

Outcomes under the D/E and EP Measures

Notification of Determination

Under 34 CFR 668.406(a), the Department will send the institution a notice of determination of a GE or Eligible Non-GE program’s final D/E and EP measures and an indication of whether the program is passing or failing each of the measures. The notice will also inform the institution whether prospective student acknowledgements are required and, for GE Programs:

  • Whether the institution is required to provide warnings to current and prospective students;

  • Whether the program could become ineligible based on its final D/E rates or EP measure for the next award year for which the D/E rates or the EP measure are calculated for the program; or

  • Whether the program is subject to a loss of eligibility due to failing the D/E rates measure or the EP measure in two out of three consecutive years for which metrics are calculated.

In addition, when applicable the notice will explain that the institution is prohibited from re-establishing the eligibility of the program, or establishing the eligibility of other substantially-similar GE programs in the same 4-digit CIP Code range, for three years following the date that the program lost eligibility or the institution voluntarily discontinued the program or ended its Title IV eligibility.

Required Student Acknowledgments

For nondegree and graduate programs with failing D/E rates, prospective students will be required to acknowledge that they have viewed information provided through the Department’s program information website. The Department will be responsible for the content and delivery of the acknowledgements, for collecting the acknowledgment from students, and for informing institutions which students have completed the acknowledgment.

Acknowledgment requirements apply to all eligible GE and Non-GE programs with failing D/E rates, other than undergraduate degree programs. Note that acknowledgment requirements do not apply if a program fails only the EP measure.

A prospective student must provide the acknowledgment before the institution enters into an agreement to enroll the student. Prospective students must provide such acknowledgments until the earlier of:

  • The date that the Department notifies the institution that the program has passing D/E rates; or

  • Three years after the institution was last notified that the program had failing D/E rates.

Student acknowledgement requirements will be effective July 1, 2026. Additional guidance on these requirements will be provided before the effective date.

Required Student Warnings

Under 34 CFR 668.605, an institution must provide warnings to current and prospective students for any year the Department notifies the institution that the GE program could become ineligible in the next award year based on its D/E rates or EP measure.

If a current or prospective student receives a warning but does not seek to enroll until more than 12 months afterward, the institution must again provide the warning unless the program has since passed both the D/E rates and EP measure for the two most recent consecutive years the metrics were calculated.

Warnings provided to students must:

  • Notify students that the program has not passed standards established by the Department based on the amounts students borrow for enrollment in the program and their reported earnings and that the program could lose access to federal grants and loans based on the next calculated metrics;

  • Provide relevant information to access the Department’s program information website;

  • State that the student must acknowledge having viewed the warning through the Department’s program information website before the institution may disburse Title IV funds to the student;

  • Describe the academic and financial options available to students to continue their education in another program at the institution, including whether the students could transfer their credits to another program at the institution and which credits would transfer;

  • Indicate whether, if the program loses Title IV eligibility, the institution will continue to provide instruction allowing students to complete the program or refund tuition and fees, and other required charges; and

  • Explain whether students could transfer credits earned in the program to another institution through, for example, an articulation agreement or teach-out plan.

In addition to providing the English-language warning, the institution must also provide translations of the English-language student warning for those students and prospective students who have limited proficiency in English.

Enrolled Students: The institution must provide the warning in writing to each enrolled student no later than 30 days after the Department issues the notice of determination. The warning must be delivered in writing, either through hand-delivery, email, or by mail. The warning must be the only substantive content contained in these written communications. The institution must maintain records of its efforts to provide the required warnings.

Prospective Students: An institution must provide the warning to each prospective student or to each third party acting on behalf of the prospective student at the first contact about the program between the institution and the student or the third party. The warning must be provided by:

  • Hand-delivering the warning as a separate document to the prospective student or third party, individually or as part of a group presentation;

  • Sending the warning to the primary email address used by the institution for communicating with the prospective student or third party about the program, provided that the warning is the only substantive content in the email and that the warning is sent by a different method of delivery if the institution receives a response that the email could not be delivered;

  • Providing the warning orally to the student or third party if the contact is by telephone.

An institution may not enroll, register, or enter into a financial commitment with a prospective student until at least three business days after the institution delivers the warning. Additionally, an institution may not allow a prospective student seeking Title IV funds to sign an enrollment agreement, complete registration, make a financial commitment to the institution, or disburse Title IV funds until the student or prospective student acknowledges having viewed the warning on the Department’s program information website.

Student warning requirements for GE Programs will be effective beginning July 1, 2026.

Loss of Eligibility for GE Programs

Under 34 CFR 668.603(a), a GE program becomes ineligible for Title IV, HEA program funds if it (1) fails the D/E rates measure for two of any three consecutive award years for which rates were calculated; or (2) for two of any three consecutive award years for which the EP measure was calculated. If this occurs, the program’s participation in the Title IV programs ends upon the earliest of—

  • The issuance of a new Eligibility and Certification Approval Report (ECAR) that does not include that program;

  • The completion of a termination action of program eligibility, if the institution is fully certified; or

  • A revocation of program eligibility if the institution is provisionally certified.

If the Department does not calculate or issue D/E rates or EP measures for a program for an award year, the program receives no result under the applicable measure for that award year and remains in the same status for that measure as the previous award year. Additionally, the Department disregards any D/E rates or EP measures that were calculated more than five calculation years prior.

Appealing Loss of Program Eligibility

If the Department terminates the eligibility of a GE program for a fully certified institution, the institution may initiate an appeal under 34 CFR Part 668 Subpart G if it believes there was an error in the calculation of the program's D/E rates under § 668.403 or the EP measure under § 668.404. Institutions may not dispute a program's ineligibility based upon its D/E rates or the EP measure in any other circumstance.

Note that the termination of a GE program is considered a past performance violation under 34 CFR 668.74(a)(1) and results in an institution being treated as not financially responsible. These consequences do not apply if the institution chooses to voluntarily discontinue the program or withdraw it from Title IV eligibility.

Restrictions on Reestablishing Title IV Program Eligibility

Under 34 CFR 668.603(c)(2), an institution cannot reestablish the eligibility of a failing GE program that it voluntarily discontinued, withdrew from Title IV eligibility, or that became ineligible under the D/E rates or EP measure, for three years following the earlier of the date the program loses eligibility under paragraph (a) of this section or the date the institution voluntarily discontinued the failing program or withdrew its Title IV eligibility.

Similarly, under 34 CFR 668.604(c)(2) an institution cannot update its list of eligible programs to include a GE program that is substantially similar to a failing program (in the same 4-digit CIP code group) that the institution voluntarily discontinued, withdrew from Title IV eligibility, or that became ineligible, until the same three-year period described above has expired.

As noted above, the Department will notify an institution of any restrictions on Departmental approvals of GE programs each time the D/E and EP measures are published.

Implications for Financial Responsibility and Administrative Capability

In final regulations published October 31, 2023, the Department established a new mandatory trigger related to the GE regulations. Effective July 1, 2024, under 34 CFR 668.171(c)(2)(iii), an institution is not considered financially responsible if the institution received at least 50 percent of its Title IV funds in the most recently completed fiscal year in GE programs that failed either the most recent D/E or EP measures. The Department will make this determination annually after publishing the D/E and EP measures and contact the institution to determine next steps.

The same regulations, under 34 CFR 668.16(t), also treat an institution as not administratively capable if at least half of its total Title IV funds in the most recently completed award year were from GE programs that failed either the D/E or EP measures. This determination could impact the institution’s certification status and result in additional Departmental oversight.

Note that, as explained above, an institution may also be treated as not financially responsible if the Department terminates the eligibility of one of its programs under a Subpart G action.

Program Information Website

Under 668.43, the Department is required to host a website that provides information about institutions and their educational programs, including both GE and Non-GE Programs. This website is where students will provide acknowledgements for failing programs.

To the extent reasonably available, the website will include, for each GE and Non-GE Program:

  • Published length of the program in calendar time;

  • Total enrollment for most recently completed award year;

  • The total cost of tuition, fees, books, supplies, and equipment that a student would incur for completing within the published length of the program;

  • The percentage of enrolled students who received a Direct Loan, a private loan, or both for most recently completed award year;

  • The median loan debt of students who completed or withdrew from the program during the most recently completed award year (calculated by the Department);

  • The median earnings of students who completed or withdrew from the program during the most recently completed award year (provided by another federal agency);

  • Whether the program is programmatically accredited and the name of the accrediting agency;

  • The program’s D/E rates; and

  • The program’s EP measure.

The website may also include information such as the primary occupations that the program prepares students to enter, the program or institution’s completion and withdrawal rates, total net cost of attendance paid by completers, and other information pertaining to the program and the institution.

Requirements related to the Department’s program information website, including student acknowledgements, will be effective July 1, 2026.The Department will provide additional operational guidance for usage of this website prior to its implementation.

Certification Requirements for GE Programs

The regulations under 34 CFR 668.604(a) require that an institution must provide a certification signed by its most senior executive officer that each of its currently eligible GE programs are approved by a recognized accrediting agency or is otherwise included in the institution's accreditation by its recognized accrediting agency. An institution’s signed Program Participation Agreement (PPA) satisfies the requirement except in circumstances where the Department has reason to believe that a GE program is not accredited by a recognized agency or, if the institution is a public postsecondary vocational institution, the program is not approved by a recognized State agency for the approval of public postsecondary vocational education. Unless the Department notifies an institution that it must take additional steps to a separate transitional certification, the institution’s existing PPA satisfies the requirement and no additional action by the institution is required.

Frequently Asked Questions and Contact Information

The Department plans to publish additional Frequently Asked Questions (FAQs) related to the FVT/GE requirements in the near future. Next week, Federal Student Aid will also announce a new “Topics” page on the Knowledge Center that will include policy and operational information about the FVT/GE requirements.

We thank you for your cooperation in the implementation of the new Financial Value Transparency and Gainful Employment regulations. If you have policy questions about the content of this letter please direct them to: GE24@ed.gov.

Sincerely,

Antoinette Flores
Deputy Assistant Secretary for Policy, Planning, and Innovation
Office of Postsecondary Education

Last Modified: 09/16/2024