Gainful Employment Rescinded with Option for Early Implementation

On July 1, 2019, the US Department of Education published a Final Rule addressing Program Integrity: Gainful Employment (“GE”) in the Federal Register. The regulations rescind the 2014 GE regulations and remove them from subpart Q (gainful employment programs) of the Student Assistance and General Provisions in 34 CFR part 668. The regulatory action also rescinds subpart R (program level cohort default rates) of the Student Assistance and General Provisions in 34 CFR part 668. The regulations are effective July 1, 2020, however, the Secretary is exercising her authority to allow any entity subject to the regulations to choose early implementation.

On June 28, 2019, the Department published Electronic Announcement #122 to provide additional guidance to institutions regarding early implementation of the rule. If an institution chooses early implementation, they must document the early implementation decision internally.  An institution does not have to publish its decision to do so; however, it must make such documentation available upon request by the Department.  Institutions that do not early implement the rule are expected to comply with the 2014 GE regulations until the rescission becomes effective on July 1, 2020.

Institutions that early implement the rescission of the GE regulation will not be required to report GE data for the 2018-2019 award year to NSLDS, which would otherwise be due October 1, 2019.  Additionally, those institutions choosing to early implement will not be required to comply with 34 CFR § 668.412 (d) and (e) requirements (effective July 1, 2019) that institutions include the disclosure template, or a link thereto, in their GE program promotional materials and directly distribute the disclosure template to prospective students.  Institutions that early implement will no longer be required to post the GE Disclosure Template and may remove the template and any other GE disclosures required under 34 CFR § 668.412 from their web pages.  However, institutions must continue to comply with other non-GE consumer disclosure and reporting requirements. See, for example, 34 CFR § 668.41-668.45. Finally, an institution that early implements will not be required to comply with the certification requirements for GE programs under 34 CFR § 668.414.

There are two steps required to choose early implementation:

1) The institution must affirmatively identify the decision to early implement and communicate that decision internally.

2) The institution must maintain documentation of the decision to early implement, which documentation can be made available to the Department, if so requested.