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President to President
Molly Corbett Broad's weekly email newsletter to higher education leaders.

Department of Education Proposes New Gainful Employment Regulations

March 17-21, 2014 ~ Vol. 15, No. 10

  • Administration Proposes New Gainful Employment Rule
  • Higher Education Leaders Meet With White House Task Force on Sexual Assault
  • IN BRIEF: Mary Sue Coleman’s Atwell Lecture Now Available Online

Congress is on break until March 24, but I want to update you briefly on two developments from the past week. First, the Department of Education (ED) released new draft rules on gainful employment last Friday, the latest move in the administration’s effort to ensure students who enroll in career training programs will earn enough money to repay their student loans. 

Those of you familiar with this issue know that the road to final gainful employment regulations has been long and controversial. In 2012, a federal judge blocked elements of the final rule put forward by the department, which would have pulled federal student aid from career education programs whose graduates had high debt-to-income ratios or low student loan repayment rates. 

The department’s appeal of that ruling was denied in March 2013, and it declined further judicial actions, deciding instead to convene another negotiated rulemaking panel to craft a new set of rules. However, that panel failed to reach a consensus in December, leaving it up to ED to move forward with its favored approach—which brings us to last Friday’s announcement. 

The latest rule, which would take effect in 2016, is extremely technical—click here for a summary of the 845-page proposal​. The basic provisions include:

  • Programs would be flagged as weak if the average loan payments of graduates consumed 8 percent or more of total earnings or 20 percent or more of discretionary earnings.
  • Programs also would be flagged if the loan default rate for former students exceeded 30 percent.
  • Programs must satisfy the requirements of both tests or ED can refuse to extend financial aid to their students.

After the proposal is published in the Federal Register, ED will review the comments and publish a final rule by Oct. 30. I will keep you informed as this situation develops in the coming months.

A higher education delegation that included three ACE member presidents—Jonathan Alger, president of James Madison University (VA); Patricia McGuire, president of Trinity Washington University (DC); and Thomas Chema, president of Hiram College (OH)—met last Friday with members of the White House Task Force to Protect Students from Sexual Assault

The group included the general counsels of seven ACE member institutions along with ACE Senior Vice President Terry Hartle and General Counsel Ada Meloy and Kathleen Santora, president of the National Association of College and University Attorneys (NACUA). At the White House, the group affirmed our backing for the task force’s work and conveyed the complexity that institutions face as they strive to support victims of sexual assault on our campuses while being fair to all parties involved. 

The group assured the task force that our institutions care as much about the safety and welfare of their students as the federal government, and emphasized our desire to partner with the government to address the issue. The delegation urged the task force to focus on prevention and cultural transformation, rather than adjudication, and noted the importance of close consultation with campus staff as federal guidance or regulations are proposed.

You may recall that we submitted comments​ Feb. 28 to the task force on behalf of six of our colleague associations, outlining a series of recommendations to consider as they respond to the president's call to action. In both those comments and during the White House meeting, we conveyed to task force members that colleges and universities, students and the public would all benefit if federal approaches to this difficult issue were coordinated. As I have noted, campuses already must comply with a range of federal laws which all address sexual assault on campus, including Title IX, the Clery Act and its implementing regulations, the Department of Education's 2011 Dear Colleague Letter and the new requirements of the Violence Against Women Act.

According to the White House memorandum​, the task force has 90 days from its formation Jan. 22 to provide recommendations to the president regarding effective policies, prevention and response efforts, and must report on implementation efforts within a year. 


NOW AVAILABLE ONLINE: University of Michigan President Mary Sue Coleman delivered a wonderful Robert H. Atwell Lecture March 9 at ACE’s 96th Annual Meeting in San Diego. Her address, "Innovate, Disrupt, Repeat," focused on the need for universities to become more innovative and entrepreneurial, using her own institution and state—which was hit early and hard by the 2008 recession—as an example of what can be done. Click here​ to watch her speech in full. 

Molly Corbett Broad
President of ACE