Gainful Employment

1. Gainful Employment MSFAA Lansing, MI February 1, 2012

2. Gainful Employment

3. The Law - HEA • An educational program is Title IV eligible only if the program: • If offered by a public or non-profit institution, leads to a degree; or • If offered by any institution, “leads to gainfulemployment in a recognized occupation”

4. What is a GE Program? • At proprietary institutions all programs are GE Programs except for - • Preparatory coursework necessary for enrollment in an eligible program • Programs leading to a bachelor’s degree in liberal arts offered since January 2009 that have been regionally accredited since 2007

5. What is a GE Program? • At public institutions and not-for-profit institutions all programs are GE Programs, except for - • Programs that lead to a degree • Programs of at least two years in length that are designed to be fully transferable to a bachelor’s degree program and do not lead to a credential awarded by the institution • Preparatory coursework necessary for enrollment in an eligible program

6. What is a GE Program? At all institutions, GE Programs do not include – • Teacher certification coursework that does not lead to a certificate awarded by the institution • Collection of classes required by state, but not leading to an institutional credential • If the institution awards a certificate/diploma for teacher certification coursework, it is a GE program.

7. GE Program Identifiers • A Gainful Employment program is identified by the: • 6-digit OPEID of the institution offering the program (8-digits for reporting) • 6-digit CIP Code (Classification of Instructional Program) assigned to the program by the institution • 2-digit Credential Level

8. GE Program ID Number Undergraduate Certificate in Ornamental Horticulture at Faber College 00100201060301 6 Digit OPE ID # CIP Code Credential Level

9. Credential Levels • 01 = Undergraduate certificate (or diploma programs) • 02 = Associate’s degree • 03 = Bachelor’s degree • 04 = Post baccalaureate certificate (includes post-graduate certificate programs) • 05 = Master’s degree • 06 = Doctoral degree • 07 = First-professional degree

10. Disclosure Information • Disclosure Information on Program’s website home page - • Must be simple and meaningful • Must contain direct links from any other webpage with general, academic or admission information about the program • Must be in an open format that can be retrieved, downloaded, indexed, and searched by commonly used web search applications

11. Disclosure Information • Disclose for each GE Program: • Occupations (by name and SOC code) that program prepares students to enter • Links to occupational profiles on O*NET • Program costs – • Tuition and fees • Room and board • Books and supplies • May include other costs

12. Disclosure Information • Disclose for each GE Program: • On-time completion rate - • Denominator - Number of students who completed program during most recently completed award year for which information is available • Numerator - Number of students who completed within normal time, as published by institution (Not 150% of normal time).

13. Disclosure Information • Disclose for each GE Program: • Job placement rates for students completing the program • Use formula that the institutional accreditor, program accreditor, or the state requires • Must be disclosed on a program basis, even if formula is for institutional level placement rates

14. Disclosure Information • Disclose for each GE Program: • Median loan debt incurred by students who complete the program • Title IV loan debt (FFEL and Direct Loan only) – Amount borrowed. • Private educational loan debt – Amount borrowed • Institutional finance plans • Amount owed

15. Annual Reporting Multiple reporting methods • Batch using SAIG mailbox • Fixed width format • Comma separated value (CSV) • Online via NSLDS • Direct online entry • Under Enroll tab, GE List, Gainful Employment Add • NSLDS GE Submittal Template • Download at fsadownload.ed.gov • Allows upload of 50 records at one time

16. Annual Reporting • Institution must report information on students who were enrolled in a GE Program for each award year - • Information includes: • Student identifying information • Program identifying information • Amounts from private education loans and from institutional financing plans • Enrollment information • Tuition and Fees (Optional)

17. Annual Reporting Student identifiers • For each student who enrolled in a GE Program during the award year • Social Security Number • First, middle and last name • Date of birth • Use student’s Social Security Administration information

18. Annual Reporting Program Information • For each student enrolled in a GE Program • Institutions OPEID (8 digit) where student attended • Name of program as established by institution • Classification of Instructional Program (CIP) code of educational program • Credential Level

19. Annual Reporting Private education loan information • Defined in 12 CFR 226.46(b)(5) by the Federal Reserve Board • Total amount of non-Title IV loan received to pay costs associated with attendance in the GE Program • Examples – loans from financial institutions, credit unions, states and other localities, guaranty agencies, and postsecondary educational institutions

20. Annual Reporting Institutional Financing Plan information • Includes – • Loans • Extensions of credit • Payment plans or • Other financing mechanisms • That would otherwise not be considered a private education loan but that results in a debt obligation that a student must pay to an institution after leaving the program

21. GE Metrics Two metrics established via regulation • Repayment Rate • A percentage of the loan amounts that a GE Program’s former students are repaying • Debt-to-Earnings Ratios • Annual Income Ratio • Discretionary Income Ratio • For the GE Program’s completers, the average educational loan annual repayment amount as a proportion of the average borrowers’ annual income.

22. Repayment Rate • Repayment Rate is a percentage of the Title IV loan amounts that a GE Program’s former students are repaying (weighted for loan balance) • ED calculates a GE Program’s Repayment Rate using the program’s former students whose Title IV loans entered repayment during the applicable cohort period (e.g., 2YP)

23. Performance Requirements GE Program considered to lead to gainful Employment if it has- • Repayment Rate of at least 35% OR • Annual loan payment under the debt-to-earnings ratios of 12% or less of annual earnings OR • Annual loan payment of 30% or less of discretionary income

24. Cohort Period Used • “2YP” • two year period consisting of the third and fourth federal fiscal years preceding the federal fiscal year for which the Repayment Rate calculation is performed. • Informational rates to be issued in April 2012 • For the most recently completed federal fiscal year of 2011, included the program’s former students who entered repayment on FFEL or Direct Loan Program loans during fiscal years 2007 and 2008. That is between October 1, 2006 and September 30, 2008. It tracks repayment activity on these loans during the fiscal year 2011, between October 1, 2010 and September 30, 2011.

25. Repayment Rate • Loan repayment rate for a program calculated annually using the following ratio: • OOPB = Original Outstanding Principal Balance • LPF = Loans Paid in Full • PML = Payments-Made Loans OOPB of LPF plus OOPB of PML OOPB

26. Repayment Rate A loan is successfully being repaid if: • Its balance is reduced by at least $1.00 over the course of the year or paid in full; • It is on track to being forgiven due to public service employment; • Borrower is making payments under an interest‐only or income‐based repayment plan, but limited to no more than 3% of the OOPB; or • For post-baccalaureate programs, is a consolidation loan and all interest accrued over the course of the year has been paid.

27. Repayment Rate • Example • Former StudentsOOPB • Student A $2,000 • Student B 3,000 • Student C 5,000 • Student D 10,000 • Total OOPB $20,000 for 2YP • Only Student D successfully paying on loan • Repayment Rate = $10,000 / $20,000 = 50%

28. Debt-to-Earnings Ratio Annual Income Calculated annual loan payment based on median loan debt Higher of the mean or median annual earnings

29. Debt-to-Earnings Ratio Discretionary Income Calculated annual loan payment based on median loan debt Higher of the mean or median annual earnings less 150% of HHS Poverty Guidelines for single person

30. Debt to Earnings Ratios Median Loan Debt is the lesser of • total tuition and fees assessed the student for enrollment in all programs OR • sum of - • total FFEL and Direct Loan Program loans owed for attendance in the gainful employment program, as reflected in NSLDS • private education loans, as reported by the institution • debt obligations arising from institutional financing plans, as reported by the institution

31. Debt-to-Earnings Ratios • SSA will provide the median and mean earnings of the GE Program’s completers • ED will use the higher of the two averages

32. Debt-to-Earnings Ratios • Exclude students -- • With one or more loans in a military-related deferment status • With loans discharged, or pending discharge, for death or total and permanent disability • Enrolled in Title IV eligible program

33. Debt-to-Earnings Annual Loan Payment— • The program's completers’ median loan debt – • Amortized at 6.8% over – • 10 years for a certificate, associate degree, and post-baccalaureate program • 15 years for a baccalaureate or master’s program • 20 years for a doctoral and first professional degree program

34. Performance Requirements • Upon one year’s failure, institution must provide warnings to students and prospective students that provide – • Notice of the program’s failure and the amount by which the program failed • Any plans the institution has for improving the program • Must establish a three‐day waiting period after the warnings are provided before students can enroll

35. Performance Requirements • Upon failing two years out of three, institution must, in addition to the one-year warnings, also tell students and prospective students that — • Their debts may be unaffordable • The program may lose Title IV eligibility • What transfer options exist

36. Performance Requirements • Upon being a failing program for three out of four years, the educational program loses eligibility for Federal student aid • Initial targeting of the worst programs by capping loss of Title IV eligibility for FY 2014 rates only at 5 percent each of public, nonprofit, and for-profit programs

37. To Add GE Program • Institutions must notify ED at least 90 days before the first day of class when adding a new educational program that leads to gainful employment in a recognized occupation (GE Program) • If the first day of class is on or after July 1, 2011 and before October 1, 2011, notification was due by July 1, 2011 • If the first day of class is on or after October 1, 2011, institutions must provide notification to the Department at least 90 days prior to the first day of class

38. To Add GE Program Institution’s notification must include - • An electronic E-App with GE Program details • Accrediting agency approval • State approval • Notice of Intent to Offer an Educational Program; and • Section L of the E-App containing original signature of the appropriate official

39. Notice Of Intent To Offer GE Program • To ensure Notice of Intent is complete please: • Describe the process used for • Determining the need for the program, and • Developing the program content • Describe the process used to evaluate if the resulting content is appropriate to meet the need • Clearly identify the external parties involved in the development, review, or approval of the program, what their review disclosed, and actions taken in response

40. Notice Of Intent To Offer GE Program • If program is currently taught at the institution it is ok to mention actual placement rates • Focus on benefit to students/employers – make a clear connection between the program, the job it prepares the student for, and the local, regional, or national market need for employees in that job

41. Notice Of Intent To Offer GE Program • Institution’s notice of intent must include: • How institution determined need for the program • How the program was designed to meet local market needs • If an online program, how designed to meet regional or national market needs • Contain any wage analysis performed • How program was reviewed/approved/developed with business advisory committees, program integrity boards, public/private oversight agencies, and any businesses likely to employ graduates • Demonstrate approved by, or included in, school accreditation • Provide the date of the first day of class

42. Approval Required • If the institution did not provide the required notification timely, it must wait for Departmental approval before disbursing funds to students enrolled in the new GE Program • Example - for programs beginning between July 1, 2011 and October 1, 2011 must have provided new GE notifications by July 1, 2011

43. Approval Required Approval is also required if - • The institution is provisionally certified • The institution is adding a Direct Assessment Program • The institution is adding a Comprehensive Transition and Postsecondary (CTP) Program or • The Department advises the institution that it must wait for approval

44. Jamie A. MaloneTraining OfficerU.S. Department of Education312-730-1528jamie.malone@ed.gov My supervisor is: Jo Ann Borel Title IV Training Supervisor joann.borel@ed.gov 202-377-3930