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Gainful Employment and Financial Value Transparency Regulations: Visualizing the scope

Discussions at WCET Conference confirmed how confusing the scope is - particularly re. public and private institutions

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The recently finalized Gainful Employment (GE) and Financial Value Transparency (FVT) regulations, to be in effect as of July 1, 2024, are proving to be quite confusing. Part of the problem is the Gainful Employment language, which leads people to think of the late Obama Administration version that was successfully challenged in lawsuits and ultimately abandoned during the Trump Administration. But the Biden Administration regulations are far different in scope.

The Big Differences

GE circa 2014 stuck to student loan debt, using a debt-to-earnings (DTE) metric, based on gainful employment academic programs, defined roughly as anything from a for-profit institution that is eligible for Title IV federal financial aid and certificate programs from public and private nonprofit institutions also eligible for aid.

GE circa 2023 changes the details with the new regulations, but more importantly it changes the scope significantly. Added to DTE is a new Earnings Premium (EP) metric that independent of debt looks at earnings of program completers three years after completion and compares it to statewide high school graduate (but not postsecondary) earnings for ages 25-34. There are some exceptions, but that is the idea.

More importantly, there are a new Financial Value Transparency rules, also based on the same DTE and EP metrics, that expand the scope to all academic programs eligible for federal financial aid. Public and private nonprofit institutions, degree and certificate programs.

For better or worse, the GE & FVT regulations represent a sea change in US higher education program-level reporting and accountability.

The Need for Communication

During discussions at the WCET Conference late last month, it became apparent to me that this scope question is a problem. A lot of people who are responsible for dealing with the GE & FVT regulations are still figuring out the details, and even when the details are known, it is difficult to communicate with others what parts of the regulations apply to which programs.

I thought I’d take a crack at helping communicate the scope with a graphic using the basic form of a decision tree flowchart.

The Visualization

  • Subject to GE - the academic program’s metrics will be shared publicly and the program can lose eligibility for federal financial aid by failing the DTE or EP metrics

  • Subject to FVT Reporting and Acknowledgement - the academic program’s metrics will be shared publicly (in a Department of Education website) AND programs that fail the DTE or EP metrics must have prospective students sign an acknowledgement declaration before enrolling

  • Subject to FVT Reporting but not Acknowledgement - the academic program’s metrics will be shared publicly (in a Department of Education website) without any acknowledgement requirement

  • Outside of GE & FVT - for programs not eligible for federal financial aid, these rules do not apply

Note the stackable certificates line, as the GE & FVT regulations apply to the highest-level program a student completes. This opens the question of certificate programs (subject to GE) that are part of a degree program. If the student completes the degree program, then in general the metrics should apply to that higher-level program (and FVT) and no longer to the certificates (and GE). But what about cases where students work on stackable certificates but do not complete the degree?

There are other complexities, but hopefully this visualization will help in explaining the scope of the GE & FVT regulations.

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