Gainful Employment PanelTom Kosel, Director of Government Relations

Globe University / Minnesota School of Business

Gainful Employment

Since 1965, For-Profit Career Colleges have assisted their graduates in obtaining gainful employment by helping them secure a position in their field of study.

Potential Final Gainful Employment Regs 7/1/2012

Metrics to determine whether a program provides gainful employment

If annual loan payment is …

If repayment rate is …

% of annual income

or % of discretionary

income

and > 45% <45% & > 35%

< 35%

< 8% < 20% Eligible Debt warning Debt warning

< 8% > 20% Eligible Debt warning Debt warning

>8% < 20% Eligible Debt warning Debt warning

>8% &< 12%

>20% & < 30%

Debt warning Restricted Restricted

>8% &< 12%

> 30% Debt warning Restricted Restricted

>12% >20% & < 30%

Debt warning Restricted Restricted

>12% > 30% Debt warning Restricted Ineligible

Key Factors Driving Gainful Employment

•Student loan debt is increasing in all sectors of higher education

•For-Profit institutions graduate students with the highest average debt and the highest % of students with debt

•Lack of consistent, valid data on the ROI and the value- added received by our graduates

•Bias against For-Profit Educational Businesses

The Challenge

To provide student-centered, career-focused educational programs while

reducing student loan debt

Measuring the Outcomes of the Operation

•We have not tracked outcomes in a consistent manner.

• We do not have verifiable data to support our claim that we add value to the lives of our students.

•The gainful employment regs will require us to track data to demonstrate the eligibility and accessibility of our programs.

Gainful Employment Requirements

See handout titled “Program Integrity: Gainful Employment – New Programs 10/29/2010

• New Programs•Reporting Requirements•Disclosure Requirements

10/29/10 Final Regulations Effective 7/1/11

Gainful Employment – new programs

• Institutions must notify DOE of new program at least 90 days before first day of classes

• If DOE wants additional information, they must alert the institution 30 days before the first day of classes.

10/29/10 Final Regulations Effective 7/1/11

Gainful Employment – reports

Annual reports by program from 7/1 to 6/30 with the following data:

• All students entering the program• All students completing the program

Completion date Amount student received from private educational loans and

institutional financing that is owed Whether student matriculated to higher credential program at same

institution or at another institution

• Total enrollment as of 6/30

10/29/10 Final Regulations Effective 7/1/11

Gainful Employment – disclosures

Disclosures must be in all promotional material and websites:

• Occupation the program prepares students to enter• On-Time graduation rate for program• The cost of the program including tuition, fees, books and

supplies• Placement rate for students completing the program using

the methodology developed by NCES• Median loan debt of all students completing the program

Final Gainful Employment Regs 7/1/2012Metrics to determine whether a program provides gainful employment

If annual loan payment is …

If repayment rate is …

% of annual income

or % of discretionary

income

and > 45% <45% & > 35%

< 35%

< 8% < 20% Eligible Debt warning Debt warning

< 8% > 20% Eligible Debt warning Debt warning

>8% < 20% Eligible Debt warning Debt warning

>8% &< 12%

>20% & < 30%

Debt warning Restricted Restricted

>8% &< 12%

> 30% Debt warning Restricted Restricted

>12% >20% & < 30%

Debt warning Restricted Restricted

>12% > 30% Debt warning Restricted Ineligible

Gainful Employment: Suggested reading list

See one page handout – for electronic version, send email request to

tkosel@globeuniversity.edu