NewAmerica.org  |  About  |  RSS  |  Login
Thursday, April 17, 2014

Gainful Employment Liveblog: Session 3

By  — December 13, 2013
 

Today is the first and only day of the third negotiated rulemaking session on gainful employment. Assuming things go as planned, the committee will see if it can reach consensus on regulatory language. If it does, then that language would become what the U.S. Department of Education releases for public comment through what is known as Notice of Proposed Rulemaking, or NPRM. If the committee doesn’t reach consensus, then the Department is free to write the NPRM for public comment as it desires. Updates will appear below.

See here for a summary of the language under discussion today. The big things to know: (1) repayment rate is gone as an accountability measure; (2) programs can kept the debt in their debt-to-earnings rate at the level of tuition and fees assessed to students; (3) a program cohort default rate of 40 percent or more is no longer grounds for immediate eligibility loss; and (4) programs about to fail can avoid penalties by using institutional aid to reduce debt levels of current students.

9:10 a.m. Opening Remarks

Deputy General Counsel Julie Miceli provides opening remarks from the Department. She notes that the Department has made improvements to the rule as it hears feedback from negotiators and thanks them for the robust debate, thoughtfulness, and careful preparation. She notes that the Department has made changes to the rule and also provided some data analysis of the metrics treating non-completers. She hopes the committee will come to agreement on a rule that is balanced, reasonable, and practical.

She says the Department removed the provision that would cause a program with a default rate of 40 percent or more to lose eligibility right away because that would work counter to the goal of giving time to improve. She notes that the loan portfolio repayment rate was removed after feedback from the committee, because they felt the program cohort default rate was more in keeping with the direction of the rule, they did not see the need for two rates that included non-completers versus only one for completers, and because they had limited data to analyze it and draw conclusions about its stability over time.

9:20 a.m. Consensus Protocols

For those who want to understand how this consensus determination actually works, the primary negotiator gets the main say in consensus votes, unless they are not present, in which case the alternate gets the vote. Consensus is defined as the absence of dissent. Negotiators are supposed to dissent with things that they really cannot live with, not things that they see as imperfect. The committee will try to reach tentative consensus throughout the day, but nothing is final until the end of the day.

9:25 a.m. Reviewing New Language

The Department is starting with the program cohort default rate. Programs with rates at or above 30 percent for three consecutive years would lose eligibility. Programs with a rate at or above 40 percent would not run the risk of immediate eligibility loss. About 943 programs out of around 6,815 (14 percent) fail this test.

Marc Jerome from Monroe College in New York asked how many programs would fail the debt-to-earnings test if the minimum number of completers was changed from 10 to 30. The Department will put together a summary document that shows how the failure rate changes at the size of 30. He wants to know if large programs fail versus smaller ones. Because he says its different if a lot of small programs are passing and the big ones are all failing.

Della Justice from the Kentucky Attorney General’s office asks if the Department would put the 40 percent immediate eligibility option back in after a transition period. The Department confirms that it is taking all other pieces from the cohort default regulations except this 40 percent piece. Steve Finley, from the Department, notes that the 40 percent piece is not statutory, it is a regulatory piece added by the Department, which makes it differnet.

Belle Wheelen from the Southern Association of Colleges and Schools Commission on Colleges asks why so many more programs are subject to the rule and fail. Aside: the increase in programs affected is probably most attributable to looking at programs with a smaller number of completers because there are a lot of programs that have between 10 and 30 completers. These would have been eventually captured in the old rule, which rolled up multiple years of completers to get to 30, but would not have otherwise showed up in a one-year snapshot.

John Kolotos says that there is a little bit of growth in the programs from year to year, but the reason why more programs are captured is because of looking at programs with as few as 10 completers instead of 30. He says the Department is open to ideas for a transition period for program cohort default rate, but its stance is still that it wants to give them a chance at making improvements.

Rory O’Sullivan from Young Invincibles asks how many more students might default by letting more programs with high default rates to stay in the program for longer.

One of the negotiators (sorry couldn’t tell for sure who) challenges the idea of taking out the 40 percent kick out idea because cohort default rates are calculated three years after a student leaves school, so improvements won’t show up in the data for at least three years.

Jerome asks the other negotiators if they think a 40 percent cohort default rate should be a sign of harm and whether that should be applied to all non-gainful employment programs.

Barmak Nassirian from the American Association of State Colleges and Universities asks if there is any level of cohort default rate that is unacceptably high. He notes that this program cohort default rate is a snapshot and institutions have not had to care about their program rates before, so going forward they will work to manage them. Kolotos says the Department’s intent is to follow the statutory framework and that programs at the extreme are likely to fail the debt-to-earnings rate. Finley also notes that if bad programs are pervasive at an institution, then the 40 percent requirement for institutions will likely catch them.

Kolotos notes that this regulation would keep pegging off the statutory language for the cohort default rate. So if Congress changes that provision it would change for the programmatic rates.

9:55 a.m. Definitions

Negotiators have some questions about the definition of a prospective student, which as written now is about people who contact a school, rather than someone who is contacted by the school. This affects when someone is given a warning about the potential loss of eligibility. Jerome notes that the regulations state no student can enroll without written confirmation of having received the disclosure. A small group will work during the break to create a new definition.

Ray Testa from the Empire Education Group, a chain of beauty schools, asks why the Department cannot include any student who applies fills out the Free Application for Federal Student Aid (FAFSA) and not just those who received federal student aid. He says that people who apply for aid are already captured by the Department so it should not create problems with the ban on adding students to the National Student Loan Data System. Finley says the Department believes that excluding them has less legal risk than including them as proposed by Testa and they have tried to provide for that issue through the alternative earnings survey that a failing program can use to document earnings instead of Social Security Administration data.

10:15 a.m. Program Framework

This is the section on what accountability measures are included. So this is where the disappearance of the loan portfolio repayment rate occurs. He also notes the addition of a requirement that programs discontinued before rates are released will still have figures calculated.

Richard Heath from Anne Arundel Community College asks how far back the Department will go for discontinued programs. Kolotos clarifies that it is for programs where they have been reporting data, not ones that ended years ago.

Nassirian says he is extremely disappointed at the loss of the loan portfolio repayment rate, which he sees as less open to manipulation than the program cohort default rate. Margaret Reiter, who represents consumer advocacy organizations, asks if the Department will be collecting loan repayment rate data to gauge this measure in the future. Kolotos says he cannot commit the Department to that at this point. O’Sullivan says he also is disappointed in seeing the repayment rate being excluded.

(As an aside, Rep. Elijah Cummings, a Maryland Democrat who is the ranking member on the Committee on Oversight and Government Reform, just arrived in the room.)

Jerome says he thinks that if the repayment rate is included it will cause lots of failures at community colleges. He asks if the Department ran the data on the effect of the repayment rate.

Nassirian says the issue is the deb-to-earnings measure only looks at what happens to completers. He notes there are 233 programs in the data with a completion rate of less than 20 percent and about 60 percent will pass the tests Note: not quite sure where those figures are from.

Kolotos says the Department frankly did not have enough data to indicate that a program failing the loan portfolio repayment rate was a bad program. He’s not saying the concept is a bad concept. They have it as a disclosure item and they would incorporate it as a metric if they could find a way to target it or justify it with a threshold, but no one has been able to find one.

Kevin Jensen from the College of Western Idaho says the metrics do not work together in concert to allow a program to pass. They work separately to fail programs. He says in that context he struggles to think about how to capture non-completers properly in the way it is structured now. 

Jack Warner from the South Dakota Board of Regents says he thinks that the repayment rate is important because it is affected by completion. He notes that he thinks disclosures do not cause institutions to improve. He wants continued work on the repayment rate because he thinks that it’s important for the completion issue. Reiter also indicates that she thinks that the metrics should take into account students that do not get federal student aid. Note: the restriction to federal aid recipients comes from the judge’s second ruling, which said the Department could not add students that did not receive this aid into its loan database.

Kolotos notes that restrictions do kick in after the second failure so there is protection in terms of borrower relief, enrollment restrictions, etc.

Nassirian reiterates his concern that programs are being given more chances than institutions do. He asks why if its OK to kick out an institution for a 40 percent rate but not a program.

Jensen also notes his concern about manipulation of cohort default rates.

11:25 a.m. Community College Proposal

Jensen and Heath again raise concerns about how programs with low rates of borrowing. Their idea is that programs with a median debt of $0 and prices below the maximum Pell Grant award should be exempted automatically pass from the regulation. Note: Of the more than 1,000 programs that would fail, 49 are at community colleges, two are at public colleges of less-than-2-years, and four are at public 4-year colleges. Update: Sorry, had that wrong, it’s automatically pass, not be exempted from.

Jerome objects, saying he is concerned that such an exemption would allow programs with almost no completers to pass. Jensen says he is open to alternative ideas and their goal is not to give a pass to bad programs, but make sure good programs aren’t measured with unrepresentative student populations.

Jerome indicates he would like to have a completion rate, though is unsure what to do with it.

Several negotiators get into a discussion about whether this rule is about measuring results through just debt or other thing as well, noting that the metrics all are based upon loan amounts or performance.

Jensen notes that programs with low borrowing and low, regardless of type, accomplish what we want and would like that recognized. He indicates fears that some community colleges may choose to exit the loan program. Jerome had responded to a similar point earlier discussing how students who attend a program but dont’ borrow may still use up Pell Grant eligibility if they do not complete.

Reiter again asks about why all completers are not included. Finley says they can be through the alternative measure. But the Department’s primary analysis are about the people getting the federal investment in those programs. He says that is driven in part by the prohibition of retaining information about students that don’t get federal aid in its database. Kolotos says it would need specific information on students that don’t get aid in order to calculate debt-to-earnings rates and it cannot do that.

Nassirian says the idea is for the institution to report the median borrowing amount by looking at its own students so it would not have to report information on the students without federal aid to the Department. He says he strongly endorses the idea from community college and from Jerome about the need for a completion measure.

Jensen notes in response to a question that “low-risk” programs would still have to report and disclose, it just gives them a way to pass. He asks if they came up with a new proposal based upon comments it heard whether the Department would look at it. Kolotos says they would, but needs to know if it applies to debt-to-earnings or everything. Jensen says it would be everything. Kolotos says there would need to be a rationale for why program cohort default rate is excluded as well. Jensen says it is the same issue–low borrowing rates causing ineligibility and leading to lengthy appeals and challenges based upon low borrowing that the Department may not have the capacity to process.

11:45 a.m. Calculating Debt-to-Earnings Rates

The Department wants the total amount of loan debt reported, but it would cap the amount for the actual debt-to-earnings calculations at tuition and fees charged.

Reiter asks about language saying the Department “may” include debt from other institutions with common ownership. Finley notes that the issue is to give the Department flexibility where there are abuses, such as every student nominally enrolled in one place is moved to another. Reiter is concerned that this would allow for a lot of gaming that would be hard to defend without clear thresholds, since some programs could move a handful of students around to avoid penalites.

Negotiators move on to discuss an added provision that would allow median debt figures to be capped at tuition and fees, not total amount borrowed. This is in response to concerns that students may be borrowing for things out of the control of the college. Justice asks if the cap on tuition and fees can also include books, since that can be a large cost to students. Nassirian adds that required equipment and supplies should be included here. She notes that the school could estimate it and do the greater of the estimated or actual cost if purchased from the school.

O’Sullivan notes his annoyance with this cap because he feels that the changes all keep going the way of what schools want, including this one. He says he does not think the Department is thinking about the perspective of students and that’s not the first instinct around the table.

Nassirian says he supports the concept of not dinging programs because of living expenses. But he says its a stretch from there to limiting the loan amount to just tuition and fees because the student didn’t discretionarily buy books, supplies, and equipment. He says those are expenses students would not incur on their own. Jones disagrees. He says students are borrowing for expenses they would otherwise have had. He notes this tuition and fee cap notion was in the prior rule. Nassirian agrees with Jones, but reiterates that he wants books, equipment, and supplies in there.

1:25 p.m. Back from Lunch

We’re going to start with cleaning up some pieces from this morning on prospective students, the community college proposal, and then some of the questions around the larger framework. The Department will caucus at 4 p.m. and then return.

This is the redrafted definition for prospective student, which may be missing a word or two because its only been read aloud, not distributed to the public and there had been some disagreement over including the word contractor or vendor in it: any individual who has contacted or who has been contacted by an eligible institution or its agents or representatives authorized to enroll students in its gainful employment programs. Jerome and Jones indicate they think it would be better to use the definition of a prospective student, which is already in the rules around misrepresentation and that this may not be the best use of time.

Jensen says the community college proposal has draft language and suggests they could include completers and non-completers. I believe this change would mean the median debt of all students would have to be $0, but the text is not in front of me. He says that they want the language in the framework section because this deals with metrics that do not capture a representative sample of students. He says it would apply to both the debt-to-earnings rate and the program cohort default rate. He wants it to apply to both metrics to avoid the burden of the appeals process where they know they would already win based upon the existing low participation rate challenge. (Basically, an institution with a low borrowing rate can challenge its high cohort default rate by multiplying the percentage of its students with debt by the default rate. The threshold on that test is not the same as the 30 or 40 percent level.)

Jensen asks for a vote on who supports the idea. It looks like Reiter, Heath, Jensen, O’Sullivan, Nassirian, O’Connor, Justice, Greenfield and Daywalt all indicated their favor, though there may have been others. Jones and Jerome did not. I cannot see how the accreditors voted on it either. Reiter asks for a consensus vote on the community college proopsal. Both Jones and Jerome dissent so there is no consensus.

Kolotos asks if the committee has any feedback on the interest rate used for the debt-to-earnings rate. The current proposal is the lowest of the current rate or the rate for the prior six years on Federal Direct Unsubsidized Loans. Nassirian said the initial idea was the weighted average, but notes that the Department thinks that is unmanageable. He suggests a rough average of four or five years prior and make that a proxy for the calculation in question. He suggests thinking of splitting the rates between undergraduate and graduate. Note: I believe that when you consolidate your fixed-rate loans you end up with a weighted average of the underlying rates, but if I have that wrong, correct me in the comments.

Jerome says they are looking for something that reflects the actual experience of the student. He indicates he’d rather err on the side of generosity to the institution because going too high would not reflect the student experience. Reiter says she doesn’t understand why you would go back six years since these are one, two, or four year programs. O’Sullivan supports an average for the length of time of the program being considered.

Kolotos notes a small change to how loan debt for students who complete multiple programs get treated. The Department is proposing to combine a student’s debt to the highest completed undergraduate program and then separately combine a student’s debt to the highest completed graduate program. For example, if you complete an associate degree, bachelor’s degree, and master’s degree at the same school, then the AA and BA debt would be combined and the master’s would be judged separately. This would not penalize a school where you can complete both undergraduate and graduate degrees compared to one where they only do graduate degrees. If that same student also completes a doctorate, then the master’s and doctorate debt would be combined. Jerome says he likes this change.

Kolotos says the Department is going to caucus at 3:15 p.m. instead of 4 p.m. He says they will want 30 minute.

Jeff Baker from the Office of Federal Student Aid says that 3.37 percent is the rate for loans first disbursed in 2004-05 while in repayment. So that is where that rate comes from on the data run.

1:55 p.m. Issuing and Challenging Debt-to-Earnings Rates

Reiter and O’Sullivan both say they would like warnings and borrower relief set asides to occur while rates are appealed.

2 p.m. 668.407 Calculating Program Cohort Default Rates

Mohr says she has a serious problem with the need to go through the disclosure process at a school with low borrowing rates before appeals are granted because of both a resources issue and the message it would send. Jensen agrees and says the process of appealing a cohort default rate based upon low participation rates is burdensome for schools and creates an incentive to exit the loan programs. He wants the Department to have a way of passing those programs before needing to appeal them.

2:05 p.m. 668.409 Final Determination and Consequences of Gainful Employment Measures

This is the section that include borrower relief and the proposal from Jerome about reducing debt levels, so expect a lot of discussion here.

Jerome asks about how the Department would want schools to warn students that cannot get federal student aid, such as foreign students. He says the warnings are particularly hard because they may be issuing warnings for programs that may do better than non-gainful employment programs elsewhere. Kolotos says they will add the foreign students piece to what the Department is discussing. Jerome says he doesn’t think there’s a way to do this between federal aid and non-federal aid recipients, seems like he was primarily thinking about foreign students.

Jensen says the language about when students have to get warned is too complicated. He suggests limiting it to when a student makes a financial commitment, which is more consistent across schools. Justice disagrees because she wants the warning to occur before they are about to make the financial commitment. Jensen notes there needs to be flexibility to not warn students attending non-gainful employment programs.

Jerome asks if the idea of borrower relief is that there has been harm to students that should be corrected. Marinucci says yes, this is intended to say for those who were in that program at that time, it is intended to cure them. Jerome says he’s worried that if the student is going to be harmed that it is arbitrary to not protect students in an equivalent non-gainful employment program. Marinucci says the gainful and the rationale and support for using this here is interpreting the term gainful and coming up with methods for defining it. He does not see a comparable basis for doing that for anybody else. Jerome asks if the Department would do disclosure for others to make an informed choice. Kolotos says in general no. Jerome asks if many non-gainful programs would fail the debt-to-earnings metric and if they have a sense of it. Kolotos says they do not because they do not have enough data to do earnings information for non-gainful employment programs. Jerome asks if the scorecard will have that information. Note: generating program-level earnings requires knowing who is in what program. That’s something institutions have to report for gainful employment, so without that reporting the Department does not know who is in what program.

O’Sullivan asks about the payment about what the amount that would have to be made for borrower relief if a program fails the program-level cohort default rate. Marinucci says it would not be the amount of one payment, since default requires not making a payment and going delinquent for 270 days. He says the goal is to deal with the debt burden in a way that’s similar to the relief amount for the debt-to-earnings rate.

Heath says he is concerned about the students who use some of their lifetime Pell eligibility for a program that fails and has no way to get that portion of their eligibility back. Marinucci says that issue came up at the first session and the Department felt like the statute did not let it to change those limits. He says that the relief is about wiping out the debt, but saying it is too much. So there’s no inference that the Pell Grant was wasted.

Jensen says that the issue with the program cohort default rate borrower relief is that the amount of debt may not be the driver of default. He asks how the Department will determine which students get cured and get relief.

2:50 p.m. Loan Reduction

Kolotos puts forward what he calls the Department’s interpretation of an idea from Jerome. Instead of setting aside debt or providing a letter of credit, the institution would lower the debt of current students for the length of the program. This way, when the program is evaluated, it will have passing rates. Schools would have to submit a plan and for the first four years the college could do this instead of losing eligibility if it was failing. It also wouldn’t have to do warnings or enrollment limits.

Jerome thanks the Department for its interpretation. He says there’s a need to balance protection against predatory programs versus accidentally closing good programs. He says this plus the alternative earnings survey is how a program could improve. He closes with having programs being just above the failing level for the debt-to-earnings rate could be common across the country.

Justice says the language is not tight enough to make programs actually reduce the debt and asks what would happen if they end up not reducing the debt enough to pass the debt-to-earnings test in future years. Whitney Barkley from the Mississippi Center for Justice also says she’s concerned that the language only requires that the program be offered and students could end up not being really notified of it or being in it. She asks why there is a requirement that students cannot be coerced into the grant. Kolotos says the issue is loans are quasi-entitlements, so students have to agree to not take out as much in loans as they otherwise would in exchange for the scholarship. So if a student doesn’t take the deal because he/she wants to borrow more, the college cannot force them to take it.

Reiter asks what happens if students who were not going to borrow found out that other students got grants. She notes this could make students borrow that otherwise would not. She suggests programs should reduce their tuition and fees instead of offering grants. She also suggests that colleges should have to put this money into a trust so that it’s guaranteed to be available.

O’Sullivan says he is also concerned about making students accept the grant. Jerome says his intention was the Department would monitor this issue so it knew action was happening. He says the issue is that the debt-to-earnings rate is a median, so half could be above an acceptable level. This proposal would bring all students to below the median debt level and defer to the Department to enforce it.

Nassirian says he does not object to the idea. But he’s concerned that too many changes are moving around from real amounts borrowed and he’s concerned about moving away from real cash flows. He says this amount is less in terms of the snapshot commitment compared to the letter of credit or set aside, though he notes in response to Jerome saying the loan reduction would be more that it could be more over the long run.

Jerome says the proposal is guaranteeing that when there is an issue with student debt that it would guarantee they don’t have too much debt. He says that he expects the Department will monitor the agreement and make sure nothing untoward is happening. He does not think it is open to manipulation.

Barkley says she is concerned about waiving disclosures if the loan reduction occurs and becomes a way to attract new business even though they are doing it because they are at the risk of losing eligibility.

Nassirian says he would prefer a tuition reduction rather than through grants because it brings down the budget as well. Jerome says the issue is a well-to-do student may borrow too much and so a tuition reduction would not prevent borrowing.

Justice says the Department should add language saying that the grant cannot be revoked so that if the plan is not implemented properly it cannot be revoked or have academic criteria or something similar added. Justice says this debt reduction idea looks similar to what community colleges want and asks why one idea would be better than the other. Jerome notes that community colleges with a zero median debt pass anyway and based upon the data reported it looks like community colleges are exempt anyway since so few fail.

Kolotos says the Department can redraft it, but needs actual language suggestions. Otherwise, if they agree on the idea, the Department can share the revised language with the committee before publishing an NPRM.

Heath says he thinks the idea has merit, but asks about what happens about buying down debt and if there are oversight costs to monitor this scenario.

Jenny Rickard, from the University of Puget Sound, asks if the idea around excpetional performers can be added to the agenda after the break.

ED will now caucus for a half hour.

3:55 p.m. Post-Caucus Session

The Department will go through the rest of the package with big ticket items and then return to the exceptional performers idea.

The Department agrees to add books and supplies to the loan debt cap.

Kolotos notes that they are adding requirements to the disclosure information that includes whether the student can get licensed in states in the Metropolitan Statistical Area that could encompass a few different states.

Reiter brings up an issue discussed in the last session about programmatic accreditation and whether it is necessary, required, or something else. Neil Harvison, who represents specialized accreditors, questions whether the Department has the authority to de facto require it. Reiter suggests making it “generally” necessary instead of legally.

Kolotos says the idea is not to create a new accrediting requirement for accreditors or schools. But it wants to get as close as Reiter’s idea about indicating if it had programmatic accreditation.

4:25 p.m. New Programs

Nassirian is not pleased with the changes made between sessions two and three, saying he thinks the Department spent its time weakening the rule too much. He’s objecting to what he sees as not a strong enough set of upfront requirements for new programs.

Reiter is concerned that the language around new programs says the program will be approved just if it submits all the information, regardless of the actual content of that information. She says it would be better to not even have this section since programs would otherwise use this as a defense if they got sued to say that the programs were approved by the Department.

Nassirian asks if the issue Reiter identified is a drafting error or an intentional choice. He likens it to a Soviet style check–the people are starving but the paperwork is in order.

Jones notes that the Department has a statutory restriction on looking at the actual educational work and so in order to avoid that line it makes some sense to apply upfront requirements for a program that’s part of an institution with some problems as a remedial check. But he’s concerned about applying this approval notion to programs with no history of problems.

4:40 p.m. Exceptional Programs

There’s a quick pivot to the idea of exempting exceptional performers from the metrics. That would be done for either an institution or program cohort default rate of 10 percent or below for three straight years (the initial idea was institutional but they indicated willingness to consider it for programs). Kolotos says they could not generate it at the institutional level. Kolotos says that if you drew the line at 5 or 10 percent for programs, you would have some failures but not many.

Dalton, from Excelsior, notes that a few individual schools are under the threshold–about 1,900 at 10 percent and about half that at 5 percent. He says that the reason they picked 10 percent was that you get some special disbursement capabilities if you are below 10 percent. He says that we are not going to fix schools that game the system through deferments or forbearance. And that issue needs to get addressed through reauthorization.

O’Sullivan says he likes the idea of some exception but he’s concerned about this one since it would risk letting some schools through that should not. Dalton says that if something like this isn’t done some schools will walkaway from programs. He says they dropped four programs after the 2011 regulations.

Kriger asks if individuals are interested in this idea. A good number of negotiators put up their cards, including both from the for-profit sector. Kolotos says the issue is they haven’t done a thorough enough analysis to gauge the impact of this on the rule.

4:55 p.m. Where are we on consensus?

Sandra Kinney from the Louisiana Community and Technical College System says that with a couple of slight modifications they will get as close as they can and she would vote yes. Greenfield from Spelman says yes as well with some modification.

Jerome thanks the Department for listening to them, in particular on his proposal. He says it was very difficult for him because he believes in the two metics. He says what is hard is that his accreditor and state have told his school for 20 years it is not vocational and finds being told he is vocational is hard. He indicates that having the data sooner would have helped. At this point without the data he finds it hard to accept that a program with a debt-to-earnings [above] 8 percent for three years is a bad program harming studens. He also says he would have liked a discussion of the 12 percent threshold as well as the amortization period. Jerome says the for-profit sector has some issues with loan debt and some issues with marketing, but the public sector has some problems with completion. He says on the whole he cannot support it.

Heath from Anne Arundel Community College says he would get there if he could know what the Department needed to make the community college proposal acceptable.

O’Sullivan from Young Invincibles says this is far away from what he would need as a student advocate. He says that chipping away at the structure makes it feel like a paper house.

Barkley says that the rule as it sits today does not sufficiently protect students and low-income borrowers. She says that the mark of the Department means a lot to students and this rule does not take what that marks means seriously enough. She says she’s disappointed that the repayment rate was not discussed.

Warner from the South Dakota Board of Regents says the three questions should be if students finish, if they find jobs, if they repay their loans. He thinks that the debt-to-earnings is designed to get at the loan repayment by proxy, but suggests that may not be good enough. He says that creates major gaps in the regulation because they can’t answer the naive questions that a logical person looking into it would ask. He thinks a lot of work on it needs to be done.

Jones from Strayer University says he agrees with what Jerome says about the specifics. He commends the Department for the direction that the conversation went in. He knows there were a lot of different viewpoints and said he doesn’t think there was any point where consensus looked imminent. He says there is a lot of data that we have received in the last 48 hours and in light of the impact of this proposal its difficult to sit here today and say he could support this proposal. He says he was concerned about the direction of the second session and is worried about entangling good programs. He says the way this conversation has gone presumes every institution in this sector is a bad institution by focusing on how rules could be manipulated. He says the student debt problems aren’t just endemic to this sector. As the Administration focuses on debt in the larger higher education context should not label everyone as bad actors. He says he was pleased to see this proposal today. It was still problematic in many ways, but what he does see is an effort to come forward with a proposal that is less complex and is a way for good programs to implement. He says there are too many unjustified elements, but he appreciates the tone the Department set this week and hopes that tone will continue.

Reiter says the issue is we need good measures to tell us who is predatory and who is not and this is an attempt to do this and she wanted to be clear that she did not think the whole sector is like that.

Kolotos says there needs to be an official vote. He needs to know who dissents. Reiter, O’Sullivan, Nassirian Harvison, Jones, and Jerome all formally dissent by raising their cards. Others suggest they would have raised their cards if the protocols hadn’t been that dissent by any member is enough to cause a lack of consensus.

A member of the public asks if votes will be taken on individual pieces instead of the rule overall, since in the past the Department has looked to see where there are some areas of agreement. But the Department is not obligated to do that.

Since there is no consensus, the Department now will write the NPRM as it desires and then release it for public comment.

5:15 p.m Closing Remarks

Kolotos thanks all the negotiators for this work. He says the feedback and discussions have been extremely valuable. As the Department works to draft the NPRM it is not bound by what it discussed today. But he says the ideas offered will be considered as they work to create something that is reasonable and achieves their policy goals. He says the Department stays open to new ideas for how to measure gainful employment. He stresses the need for concreteness in ideas and research and data to support ideas. He notes the Department must have a reasoned basis to support its proposals and concrete ideas make it possible to do so.

email
Photo: 

About the Author:
 
Ben Miller
Ben Miller

Ben Miller in a Senior Policy Analyst on the New America Foundation's Education Policy Program. He was previously a Senior Policy Advisor in the U.S. Department of Education.  Follow Ben Miller on Twitter or Google+.

Ed Central is produced by the New America Foundation's Education Policy Program
1899 L Street, N.W., Suite 400, Washington, DC 20036
199 Lafayette Street, Suite 3B, New York, NY 10012