Policy | Analysis

Gainful Employment: New Priorities for U.S. Higher Education IT Departments

Campus executives are likely unaware of what needs to be accomplished and when to comply. CIOs may want to begin that discussion now.

On Dec. 11, 2013, the United States Department of Education posted a 68-page draft of regulations for "Gainful Employment (GE)." Largely ignored by the press, this document — soon to be final regulations — is becoming the template for change of federal financial aid eligibility for college and university students. Gainful Employment currently only applies to certificate and other programs that do not lead to a degree, but may be extended to all postsecondary programs.For the first time, these regulations introduce starting salaries as a condition for students to receive federal financial aid. The regulations also impose financial penalties for institutions whose students in these programs fail to repay their federal student loans. Required disclosures to students have been expanded, as has reporting to the U.S. Department of Education.

Each of these factors add new requirements for administrative IT (Information Technology). In the next six months, colleges and universities will need to review their current admission, curricula, financial aid, career center and student services for effectiveness, costs and risks in this new environment. Because of the number of GE instructional programs found in for-profit and public community colleges, the proposed regulations will be most burdensome for them.

As written, the regulations would now apply to 11,735 instructional programs. Data analysis shows federal financial aid would be terminated for 1,496 of these — likely with financial penalties. 880 programs must be upgraded in order for students to continue to receive federal financial aid. As ED reported, "Fewer than 1,000 out of the approximately 6,000 institutions that are currently participating in the Title IV programs have no GE Programs."

Although no new IT student administrative systems are required before the regulations become effective July 1, 2015, the required Web site disclosure and written acknowledgement must be completed before any students are enrolled in these programs. This makes Jan. 1, 2015 a likely date for initial implementation.To keep up with the new regulations, curriculum management modules now become a key enterprise IT component. The Department of Education has stringent documentation requirements for seeking approval of new programs in addition to institutional or state approval processes. The required data needs to remain available for at least seven years.

The regulations are at the program level — a level between courses and degrees (similar to majors). The data may not exist in current campus ERP systems. Historical data on starting salaries, loan default rates and loan portfolio performance by instructional program will need to be stored for disclosure, reporting and analysis.

Reporting Requirements
Each year, the college or university has to report on each student enrolled in a GE program (34 CFR §668.410), beginning with the 2010-2011 academic year. To illustrate scope, there are 23 required data elements: Ten would typically be found in curriculum management, two from financial aid, two from enrollment and one from student accounts. Five are required to identify the student. New data requirements include tuition and fees charged to the student. All reports are required by Oct. 1, 2015. (This date could be extended. The previous limited GE implementation permitted institutions to continue without full compliance until implementation instructions were finalized.) These data are likely to be needed for policy analysis before being used for federal reporting.

The Department of Education's National Student Loan Data System (NSLDS) is the repository for gainful employment data. Authorized financial aid professionals can access data online of all students attending the institution. Details on reporting can be found in the NSLDS Gainful Employment User Guide. As described in the May 22, 2012 Gainful Employment Operations Manual, the college or university has the option of submitting data using a CSV (Comma Separate Value) spreadsheet or a fixed-width file. By contrast, Federal Student Aid has used XML file formats for data exchanges since 2001. This batch submission does use the current Student Aid Internet Gateway (SAIG) for security and batch control.

Disclosures for Students
Disclosures must include related primary occupations using the Bureau of Labor Statistics (BLS) Standard Occupation Classification (SOC) code with links to the BLS' O*NET Resource Center site for each one. Program completion and withdrawal rates, length of the program, total number enrolled, loan repayment rate, cost of tuition and fees and books and supplies, placement rate, median loan debt, median earnings, the debt/earning rates, a link to the department's Navigator Web site and program accreditation are also required. A link to the disclosure is required on every college or university Web page referring to the GE program (§668.411).

Data about starting salaries and federal student loan default rates will be computed each year for each instructional program based on institutionally provided enrollment data. The computed results will be provided back to the college or university. Colleges and universities may only seek to revise or correct data within 45 days of its receipt (§668.405). These data must be on the institution's Web site; students must have a copy of the data and acknowledge, in writing, the data was provided before enrolling. The disclosures must be made for each instructional program separately (§668.411).

Because the starting salaries from the Social Security Administration are often lower than other sources of data, the institution may want to also display starting salaries from other sources.

Risks
The regulations have severe financial penalties that may include refund of full tuition and fees for the program. The events and decisions that lead to such penalties could have occurred several years earlier. The college or university could lose federal financial aid for some of its instructional programs. If the department declares a program as failing, there is also a risk to the institution's brand.

Because of the complexity and risks, the American Association of State Colleges and Universities has scheduled workshops for teams — presidents, chief budget officers and financial aid directors. Focusing on loan defaults, they will learn about strategies that reduce these risks. Additional alternatives include revisions to enrollment management, curriculum management and financial aid and financial practices. Because of the need for data and the impact on IT software and processes, executives should also include CIOs in their team when attending.

Some observers in Washington argue the increased information will improve student financial decisions and reduce loan defaults. They also insist that federal financial aid eligibility should be related to the students' "ability to pay" following completion of their instructional program. But to avoid discrimination based on financial capability and to maintain student access, some want federal regulation that colleges and universities may not discriminate in enrollment decisions or financial aid eligibility.

Higher education had representatives participating in the discussions of Gainful Employment regulations with the Department of Education. However, there was no discussion of implementation or the impact on campus IT. Campus executives are likely unaware of what needs to be accomplished and when to comply. CIOs may want to begin that discussion now.

Editor's note: This article has been modified since its original publication to correct a factual error. We previously stated:

Because of the complexity and risks, the Association of American Colleges and Universities has scheduled workshops for teams — presidents, chief budget officers and financial aid directors.

The part in bold is inaccurate. It should read:

Because of the complexity and risks, the American Association of State Colleges and Universities has scheduled workshops for teams — presidents, chief budget officers and financial aid directors.

Last modified Feb. 18, 2014, 9:07 a.m. —D.N.

 

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