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 ED Releases Gainful Employment Data 

6/27/2012

Last week, the U.S. Department of Education (ED) provided to institutions draft data under its gainful employment (GE) regulations and today released that data to the public. Most community college certificate programs eligible for federal student aid fall under these regulations. AACC has sent a series of communications on the new, far-reaching GE regulations in their proposed and final form. The data just provided mark a major step in GE implementation. The draft data that institutions have received, structured around federal FY 2011, are essentially a dry run for the first year of actual gainful employment metrics that will be applied to FY 2012. Nevertheless, these data merit your close attention.

Background

The GE regulations have two very different features—disclosures designed to inform students about the characteristics of a given GE program and a set of metrics to determine programs’ eligibility for federal student aid. The good news is that almost no community college programs will be subject to any of the potential limitations derived from the metrics; not a single community college program failed all three rates in the initial year. The bad news is that, as our campuses already know all too well, the burden of complying with these new regulations is enormous. In addition, the extensive disclosures that are required will probably not be very useful to many potential students. As far as AACC is concerned, ED has badly missed the mark with these regulations.

The regulations were largely motivated by ED’s desire to impose a measure of quality control on programs at for-profit institutions. Given the amount of loan defaults experienced at these schools— defaults at for-profit institutions cost as much as those for all of American public higher education, for an industry that enrolls just one fifth the number of students— this was an entirely legitimate undertaking. However, unprecedented lobbying against the proposed regulations by for-profit school interests led to dramatically weakened sanctions in the final rules. Left standing were disclosure and reporting structures that apply to thousands of community college programs.

Release of Gainful Employment Loan and Debt Repayment Metrics

As mentioned, ED’s release of loan repayment and debt-to-income measurements this week is a test run of sorts. This is prudent given that the GE release represents mammoth new data dissemination. For campuses, the first thing to understand is that no official actions will result from the information that has been provided. These data are for the FY 2011 GE calculations, and the regulations do not take effect until FY 2012.

The key unit in the GE scheme is the individual program. All disclosures and debt measures are applied at the individual GE program level. This represents a level of granularity that is not always found in analyses and public presentation of academic performance. Without going into detail at this time, the three tests that each GE program will be subject to are a repayment rate and two debt-to-earning measures. One of these two measures is keyed to 150% of the poverty level. In order to calculate these debt-to-earnings ratios, the government has matched the social security numbers of program completers with annual earnings data provided by the Social Security Administration (SSA). This is a landmark development in federal policy and may portend further use of these data in other higher education contexts.

What’s in It for You?

Although the GE regulations are deeply flawed, they do offer community colleges a major ancillary bonus. This is the data that will be made available on the earnings of individual program completers. (Note that for programs where there are more than 30 completers in a given year, a 4-year period is used; if the 4-year number is less than 30, data are not provided. Many and perhaps most community college GE programs will not meet this 30 completer threshold.) This information may help you more rigorously assess the impact of your certificate programs. While the SSA data have certain limitations, overall they represent a potentially huge asset to institutions. You and your staff will want to carefully examine these data.

AACC’S Role and Advocating on This Issue

AACC remains committed to helping its institutions comply with these regulations, seek changes where possible, and help guide federal policies in this area. AACC continues to advocate in Washington, DC, for policies that will connect colleges with state and, where appropriate, federal data sources that will help them monitor their performance more effectively.  Again, the GE regulations represent a watershed in terms of the latter, and the availability of data from SSA may prove very helpful to colleges. We still think that the federal government needs to be much more aggressive in helping institutions access workforce data, and although progress is slow, it is occurring.

We encourage you to provide feedback to AACC on  all aspects of the impact of these regulations.  This helps us better understand their impact and in turn communicate that to policymakers. We also strongly encourage you to communicate your thoughts about these rules to your members of Congress.  They remain interested in these regulations, and if Governor Romney becomes president, he will likely take a skeptical view of these policies.

For more information, contact David Baime (dbaime@aacc.nche.edu), Senior VP for Government Relations and Research, or Chris Mullin (cmullin@aacc.nche.edu), Program Director for Policy Analysis.

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