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Final Rule: Gainful Employment

FR part

Publication Date: October 31, 2014

Posted Date: October 31, 2014

Subject: Final Rule: Gainful Employment

FR Part: II

FR Type: Final

Effective Date: July 1, 2015


[Federal Register Volume 79, Number 211 (Friday, October 31, 2014)]
[Rules and Regulations]
[Pages 64889-65103]
From the Federal Register Online via the Government Printing Office []
[FR Doc No: 2014-25594]

[[Page 64889]]

Vol. 79


No. 211

October 31, 2014

Part II

Department of Education


34 CFR Parts 600 and 668

Program Integrity: Gainful Employment; Final Rule

Federal Register / Vol. 79 , No. 211 / Friday, October 31, 2014 / 
Rules and Regulations

[[Page 64890]]



34 CFR Parts 600 and 668

RIN 1840-AD15
[Docket ID ED-2014-OPE-0039]

Program Integrity: Gainful Employment

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Final regulations.


SUMMARY: The Secretary amends regulations on institutional eligibility 
under the Higher Education Act of 1965, as amended (HEA), and the 
Student Assistance General Provisions to establish measures for 
determining whether certain postsecondary educational programs prepare 
students for gainful employment in a recognized occupation, and the 
conditions under which these educational programs remain eligible under 
the Federal Student Aid programs authorized under title IV of the HEA 
(title IV, HEA programs).

DATES: These regulations are effective July 1, 2015.

FOR FURTHER INFORMATION CONTACT: John Kolotos, U.S. Department of 
Education, 1990 K Street NW., Room 8018, Washington, DC 20006-8502. 
Telephone: (202) 502-7762 or by email at:
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-


Executive Summary

    Purpose of This Regulatory Action: The regulations are intended to 
address growing concerns about educational programs that, as a 
condition of eligibility for title IV, HEA program funds, are required 
by statute to provide training that prepares students for gainful 
employment in a recognized occupation (GE programs), but instead are 
leaving students with unaffordable levels of loan debt in relation to 
their earnings, or leading to default. GE programs include nearly all 
educational programs at for-profit institutions of higher education, as 
well as non-degree programs at public and private non-profit 
institutions such as community colleges.
    Specifically, the Department is concerned that a number of GE 
programs: (1) Do not train students in the skills they need to obtain 
and maintain jobs in the occupation for which the program purports to 
provide training, (2) provide training for an occupation for which low 
wages do not justify program costs, and (3) are experiencing a high 
number of withdrawals or ``churn'' because relatively large numbers of 
students enroll but few, or none, complete the program, which can often 
lead to default. We are also concerned about the growing evidence, from 
Federal and State investigations and qui tam lawsuits, that many GE 
programs are engaging in aggressive and deceptive marketing and 
recruiting practices. As a result of these practices, prospective 
students and their families are potentially being pressured and misled 
into critical decisions regarding their educational investments that 
are against their interests.
    For these reasons, through this regulatory action, the Department 
establishes: (1) An accountability framework for GE programs that 
defines what it means to prepare students for gainful employment in a 
recognized occupation by establishing measures by which the Department 
will evaluate whether a GE program remains eligible for title IV, HEA 
program funds, and (2) a transparency framework that will increase the 
quality and availability of information about the outcomes of students 
enrolled in GE programs. Better outcomes information will benefit: 
Students, prospective students, and their families, as they make 
critical decisions about their educational investments; the public, 
taxpayers, and the Government, by providing information that will 
enable better protection of the Federal investment in these programs; 
and institutions, by providing them with meaningful information that 
they can use to help improve student outcomes in their programs.
    The accountability framework defines what it means to prepare 
students for gainful employment by establishing measures that assess 
whether programs provide quality education and training to their 
students that lead to earnings that will allow students to pay back 
their student loan debts. For programs that perform poorly under the 
measures, institutions will need to make improvements during the 
transition period we establish in the regulations.
    The transparency framework will establish reporting and disclosure 
requirements that increase the transparency of student outcomes of GE 
programs so that students, prospective students, and their families 
have accurate and comparable information to help them make informed 
decisions about where to invest their time and money in pursuit of a 
postsecondary degree or credential. Further, this information will 
provide the public, taxpayers, and the Government with relevant 
information to better safeguard the Federal investment in these 
programs. Finally, the transparency framework will provide institutions 
with meaningful information that they can use to improve student 
outcomes in these programs.
    Authority for This Regulatory Action: To accomplish these two 
primary goals of accountability and transparency, the Secretary amends 
parts 600 and 668 of title 34 of the Code of Federal Regulations (CFR). 
The Department's authority for this regulatory action is derived 
primarily from three sources, which are discussed in more detail in 
``Section 668.401 Scope and Purpose'' and in the notice of proposed 
rulemaking (NPRM) published on March 25, 2014 (79 FR 16426). First, 
sections 101 and 102 of the HEA define an eligible institution, as 
pertinent here, as one that provides an ``eligible program of training 
to prepare students for gainful employment in a recognized 
occupation.'' 20 U.S.C. 1001(b)(1), 1002(b)(1)(A)(i), (c)(1)(A). 
Section 481(b) of the HEA defines ``eligible program'' to include a 
program that ``provides a program of training to prepare students for 
gainful employment in a recognized profession.'' 20 U.S.C. 1088(b). 
Briefly, this authority establishes the requirement that certain 
educational programs must provide training that prepare students for 
gainful employment in a recognized occupation in order for those 
programs to be eligible for title IV, HEA program funds--the 
requirement that the Department defines through these regulations.
    Second, section 410 of the General Education Provisions Act 
provides the Secretary with authority to make, promulgate, issue, 
rescind, and amend rules and regulations governing the manner of 
operations of, and governing the applicable programs administered by, 
the Department. 20 U.S.C. 1221e-3. Furthermore, under section 414 of 
the Department of Education Organization Act, the Secretary is 
authorized to prescribe such rules and regulations as the Secretary 
determines necessary or appropriate to administer and manage the 
functions of the Secretary or the Department. 20 U.S.C. 3474. These 
authorities, together with the provisions in the HEA, thus include 
promulgating regulations that, in this case: Set measures to determine 
the eligibility of GE programs for title IV, HEA program funds; require 
institutions to report information about the program to the Secretary;


Last Modified: 10/30/2014