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 Department of Education Releases Final Gainful Employment Regulations 

6/3/2011

The Department of Education (ED) today unveiled the long-anticipated final regulations on gainful employment programs. These regulations, which apply to most degree and nondegree programs at for-profit institutions of higher education and nondegree programs at other institutions, are primarily aimed at programs at for-profit institutions that saddle students with high debt loads and fail to prepare them for an occupation. While very few community college programs are likely to be sanctioned, the regulations nonetheless require additional reporting requirements for a significant number of community college programs. (For a description of those requirements, see the April 22, 2011, legislative alert, “Letters on State Authorization and Gainful Employment, on AACC’s Advocacy News page.)

The final regulations make several significant changes that will soften their impact, compared to the proposed regulations ED issued last July. Like the proposed regulations, the term gainful employment is defined in relation to the loan repayment rates and debt-to-income ratios of a program's former students. Like the proposed regulations, a given program risks losing its eligibility to participate in the Title IV student aid programs if it fails to meet certain thresholds on the repayment and debt-to-income measures. However, under the final regulations, a program would lose this eligibility only by failing the three tests in three out of four years, as opposed to being subject to immediate sanctions under the proposed rules. This change, combined with other, smaller adjustments to the metrics, will result in fewer programs losing eligibility as a result of these regulations. The bulk of these programs are still expected to be those at for-profit institutions.

Look to the AACC website in the coming days for further analysis of these regulations, which take effect on July 1, 2012. ED's press release and a slide presentation providing further details on the regulations, as well as the link to the full text of the regulations, are available on AACC’s Advocacy News page now (“Obama Administration Protects Students From Ineffective Career College Programs”). 

For further information, please contact AACC Senior Vice President of Government Relations and Research David Baime (dbaime@aacc.nche.edu) or Director of Government Relations Jim Hermes (jhermes@aacc.nche.edu).

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