What Colleges and Universities Need to Know About the Department of Education’s Impactful Proposed Institutional and Program-Level Rules

Duane Morris LLP

Alerts and Updates

June 6, 2023

On May 19, 2023, the U.S. Department of Education published in the Federal Register a Notice of Proposed Rulemaking (NPRM) for a package of proposed rule changes addressing financial value transparency (FVT) and gainful employment (GE), financial responsibility, administrative capability, certification procedures and ability to benefit (ATB).

As described by the Department in its press release, the proposed regulations would establish “the strongest set of safeguards ever to protect students from unaffordable debt or insufficient earnings from career training programs, along with new measures to increase transparency across all postsecondary programs,” regardless of ownership type. Potentially of immediate impact to most institutions, the proposed rule would (1) establish new FVT disclosures applicable to every Title IV-eligible educational program at all institution types and (2) reinstate expanded, tougher GE requirements applicable only to GE programs (which includes nearly all programs at proprietary institutions and only certificate programs at public and private nonprofit institutions). Both the FVT and GE regulations would utilize a debt-to-earnings (D/E) rate and an earnings premium (EP) threshold metric to measure the value of Title IV programs, but loss of Title IV eligibility would only occur for GE programs. The FVT proposal is notable in that it is the first time the Department has attempted to measure the value of educational programs at traditional (nonprofit and public) institutions.

The Department posted two fact sheets outlining the proposed changes in GE and transparency and other provisions in the package, as well as GE data sets used to model the effects of the proposed FVT and GE rules:

• GE data description (PDF)

• GE data codebook (Excel)

• GE data set (Excel)

With regard to FVT and GE, it is our strong recommendation that all institutions review the underlying data and conduct an internal analysis to determine the projected impact of the rule changes. This will inform the development of public comments.

Public Comment

The NPRM is open for public comment for 30 days, with comments due on or before midnight on June 20, 2023. All interested stakeholders are encouraged to submit comments addressing the proposed rule. Comments can be submitted through the regulations.gov portal and should include Docket ID ED-2023-OPE-0089.

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