FR part
II
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 [www.gpo.gov] [FR Doc No: 2014-25594] [[Page 64889]] Vol. 79 Friday, 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]] ----------------------------------------------------------------------- DEPARTMENT OF EDUCATION 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: gainfulemploymentregulations@ed.gov. 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- 800-877-8339. SUPPLEMENTARY INFORMATION: 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;