The Still Overlooked Financial Value Transparency Rules

What about the non-Gainful Employment disclosures coming to a government website near you?

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Update 10/13 - I have updated this post to correct the undergraduate exemption. Associates and bachelors degree programs will be required to disclosure program metrics but will not require student acknowledgement form. I apologize for this error.

With recent publication of the final Gainful Employment (GE) rules, there is still an overlooked aspect of the rules’ impact on nonprofit colleges and universities. Many of those schools’ certificate programs fall under GE, where programs failing GE metrics for two years could lose access to federal financial aid; however, there is also an impact on the more traditional part of these programs, as described in a Department of Education (ED) fact sheet [emphasis added].

Financial Value Transparency

In addition, the rules contain a new Financial Value Transparency (FVT) framework will give all students the most detailed information ever available about the cost of postsecondary programs, and the financial outcomes they can expect. It will also help prospective students understand the potential risks involved in their program choices by requiring them to acknowledge viewing this information before enrolling in certificate or graduate programs whose graduates have been determined to face unaffordable debt levels.

In a nutshell, the FVT will measure academic programs at nonprofit colleges and universities against the GE metrics:

* A debt-to-earnings 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, which is defined as annual earnings minus 150% of the Federal poverty guideline for a single individual (about $21,870 in 2023).

* A new earnings premium test that measures whether the typical graduate from a program who received Federal aid is earning at least as much as a typical high school graduate in the labor force (i.e., either working or unemployed) in their State between the ages of 25 and 34. This is equal to roughly $25,000 nationally but varies across States.

Programs that fail either of these metrics will have to have prospective students sign an acknowledgement that they have seen these failure rates before signing up.


There are two big changes since the draft rules were submitted in May, largely based on across-the-board complaints of trade associations (those representing colleges and universities) during the comment period.

  • Undergraduate degree programs are no longer included from the student acknowledgement requirements. [Updated]

  • Select licensed fields have a different, more complicated timeframe for measuring earnings (beyond the 2-4 years for other programs).

Data Limitations

The big limitation on all of the data is that programs cohorts smaller than 30 students (measured in a two-year period) will not be measured due to privacy concerns. But it is even more restrictive - that is 30 completers who took out federal financial aid. For non-GE programs:

  • 61% of programs are exempted from reporting; and

  • 15% of enrolled students are in these exempted programs.

Adjusted Visualization

The following chart attempts to capture an overview of these nonprofit programs subject to FVT disclosure and acknowledgement. Undergraduate degree programs will be required to disclose data but not require students to sign acknowledgement forms for failing programs. [Updated] Note the following when reading the charts below:

  • I use public College Scorecard data that has a broader coverage than the data formally used in the rule-making.

  • I have set the vertical axis to measure pass-fail on debt-to-earnings and the horizontal axis to measure pass-fail on earnings premium (aligned to state-level data).

  • The size of the bubbles represent the cohort size of specific programs, and the color coding represents the credential level (e.g., master’s, doctoral, first-professional).

  • I have removed undergraduate degree programs based on the FVT rules.

  • I have removed the fields using longer timeframes from this view: “medicine, osteopathy, dentistry, clinical psychology, marriage and family therapy, clinical social work, and clinical counseling”. These programs are still part of FVT, but I have not figured out a way to show them accurately, yet.

  • ED uses a four-digit Classification of Instructional Programs (CIP) coding that may aggregate several related programs together.

Like GE, to pass FVT means to pass both metrics. In the chart above, to be below the $0 vertical mark and to the right of the $0 horizontal mark. The bottom right quadrant.

From first observations:

  • It is primarily for undergraduate certificate programs (many of which will also be subject to GE) that fail the earnings premium test (to the left of $0 line).

  • It is primarily master’s degrees and first professional degrees that fail the debt-to-earnings test.

Specific Institutional Views

To get a sense of how this applies to real institutions, consider this view highlighting the University of Southern California.

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