A Change in Scope for Institutional Accountability

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The last two weeks I have shared views of the Republican-led House Institutional Accountability proposal in the One Big Beautiful Bill (OBBB), focusing on how that is based on risk-sharing. This week I’ll analyze the Senate Committee on Health, Education, Labor and Pensions (HELP) and its alternative approach, which is essentially Part of Gainful Employment, for All.

For those not familiar with that plan, I summarized it in a post that compared the Democrats’ Gainful Employment with the Republican House Risk-Sharing and the Republican Senate proposals.

For further reading, Inside Higher Ed’s Jessica Blake has a very good description of the Senate proposal last week. The following paragraph is the key to starting an analysis of the Senate version.

You can be wary all you like, however:

• The Senate accountability is derived from and actually builds on Gainful Employment (GE) regulations;

• But there is a difference in programs in scope and metrics applied.

To keep focused, for the rest of this post I am only going to compare to the GE portion of the regulations that would remove access to federal financial aid for failing programs, even though FVT uses the same metrics.

Both / And, not Either / Or

GE regulations are currently in effect. The House Risk-Sharing accountability proposal explicitly removes GE by removing the underlying statutory language that the regulations rely upon. Whether intentional or not, the Senate proposal does not rescind or remove and instead builds upon GE. To maintain access to federal financial aid, college and university programs would have to pass both GE (where appropriate) and the new institutional accountability metrics.

Unlike GE, the Senate HELP proposal does NOT include undergraduate certificate programs. This group of nondegree programs was one of the biggest targets of GE, particularly Cosmetology programs but also Allied Health. However, these programs would still be within the scope of GE regulations as the current bill is written.

Disclosure: I have provided a declaration in the lawsuit filed by the American Association of Cosmetology Schools against the FVT & GE regulations, analyzing the data provided. I am also providing visualizations and data analysis of the new proposals to clients.

Lean Into the New Metric

GE uses two metrics to measure programs.

• A debt-to-earnings (DTE) rate that compares the median annual payments on loan debt borrowed for the program to the median earnings of its Federally aided graduates. For a program to pass, its graduates’ debt payments must be no more than 8% of annual earnings or 20% of discretionary earnings.

• A new earnings premium (EP) metric that measures whether the typical graduate from a program who received Federal aid shows increased earnings due to completing the program.

GE Programs that fail either metric in two consecutive years lose access to federal financial aid programs. The Senate HELP proposal relies exclusively on a modified version of that new EP metric, and there is no direct metric reliant on debt levels of debt payments. Programs that fail the Senate metric for two out of three years would lose access to federal aid.

Part of GE, for All

GE only applies to programs at for-profit institutions and to undergraduate certificate programs at any institution. The Senate HELP proposal would apply to programs at all institutions (excluding UG certificates). This is a major expansion in scope. According to the GE regulations, this would expand from roughly 33,000 academic programs in scope of GE to more than 130,000 in scope of the Senate proposal.

Putting It Together

To visualize these changes in scope, I am using the same chart type that I used extensively in 2023 when the FVT & GE regulations were enacted, using the data file from the GE Regulatory Impact Analysis. The Earning Premium (EP) is shown on the horizontal access, and an Excess Debt Payments metric (where $0 is pass / fail for DTE) is shown on the vertical access. Only programs in the bottom right quadrant (shaded in green) pass GE metrics.

Note that only programs with valid debt and earnings data (generally with 30 or more completers in a combined 2-year cohort) are shown.

Credential levels are color-coded, and program size is used for the size of the bubbles.

Now, let’s use the same data and metrics to show the difference in scope by:

• Removing Undergraduate Certificates;

• Expanding the scope to programs at all institutions; and

• Reliance only on the EP metric.

All of those programs in the top right quadrant pass the Senate metrics, as there is no direct DTE metric. Pass to the right of the EP metric (green), fail to the left (red).

Looking Ahead

Now that we have a view of how the scope of the Senate HELP proposal differs from FVT & GE, we will update data with the new College Scorecard release from two months ago and apply the modifications to the metric definitions as provided in the Senate HELP proposal.

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