October 23, 2019

Cosmetology Schools get a little win in Gainful Employment

cometology and the GE rule

A small victory for Cosmetology schools.

A Federal Judge Partially Blocks Enforcement of Gainful-Employment Rule as it pertains to cosmetology schools

6/28/17 A federal district court judge issued an order Wednesday partially blocking enforcement of the gainful-employment rule for cosmetology schools that sued in February to halt the regulation.  Case 1:17-cv-00263-RC Document 30 Filed 06/28/17

The Department of Education  had defended gainful employment in court in March but earlier this month it announced that it would pursue a rewrite of the regulation.

The Federal judge ordered that the cosmetology schools be given additional flexibility with filing appeals of earnings data and that the department must now give those schools more time to file appeals. The order applies only to American Association of Cosmetology Schools programs.

In this case, the Court considers whether the Department of Education (“DOE”) acted
arbitrarily and capriciously with respect to cosmetology schools when it decided to
presumptively use earnings data that does not account for unreported income. Although the
DOE was justified in using reported income as the presumptive measure of overall income, it
arbitrarily and capriciously made rebutting that presumption overly difficult.
In setting standards that determine which proprietary schools’ graduates are entitled to
federally backed student loans, the DOE looks to the rates at which the schools’ graduates are
“gainfully employed.” To determine whether graduates are gainfully employed, the DOE has
adopted a test that compares the graduates’ income levels to their levels of debt. To determine
the graduates’ income, the DOE presumptively uses the Social Security Administration’s
(“SSA”) income data. This data does not account for income that is not reported to the Internal
Case 1:17-cv-00263-RC Document 30 Filed 06/28/17 Page 1 of 40
2
Revenue Service. Schools may appeal the DOE’s use of SSA data through “alternate earnings
appeals,” which, if successful, allow them to use alternate measures of income before the debt
to-earnings rates become final. To submit such an appeal, a school is required to use either state
sponsored data pertaining to over half of its graduates during the relevant timeframe or gather
income data on almost all of its graduates through a survey. Schools that fail the debt-to
earnings test for a long enough time lose eligibility for federal loans. Schools at immediate risk
of losing federal-loan eligibility are required to warn their students and prospective students that
they may be ineligible for student loans in the near future.

Link to the official order

Important DOE Gainful Employment Regulations Info Update Jeri Prochaska, CSPEN

gainful emplyment

info Update Jeri Prochaska, CSPEN

Status of our Sector Webinar, we would like to share two new important pieces of information we received today from top-level Department of Education staff responsible for the interpretation and implementation of the GE regulations and metrics.

1.   TIMING OF RELEASE OF DRAFT GE DEBT-TO-EARNINGS DATA
CSPEN has received word that sometime in October, not November as previously forecast by CSPEN and the Department’s own published timelines and Power Point slides, all schools with programs subject to the gainful employment regulations should expect to receive their Draft GE Debt-to-earnings (D/E) data.  While no specific dates were provided, the release could be as early as October 21st – following completion of the first two GE Reading Files and Submitting Challenges webinars, but are more likely to come sometime the week of October 24th. CSPEN also expects the 45 day challenge period to be announced separately either by the end of October or in early November as well.

We again remind you that it is vitally important for your institutions and those within your organization responsible for review of the Draft GE D/E data and possible submission of challenges to the data to strongly consider attending the workshops later this month.  For more information on these important webinars refer to (ANN-16-14) Subject:  Live Internet Webinars – Gainful Employment: Reading Your Draft GE Debt-to-Earnings (D/E) Rates Files and Submitting Challenges.  http://ifap.ed.gov/dpcletters/ANN1614.html

2.  INTERPRETATION OF TIMING FOR PROPOSED REVISIONS TO 2017 DISCLOSURE TEMPLATE
These same officials also shared that the changes being proposed as part of the September 13, 2016 Federal Register Notice (and the potential for any additional revisions based upon the comment period associate with this Notice which doesn’t close till November 14, 2016) are, in the view and interpretation of the Department, not subject to the Master Calendar and thus all of the revisions – including those based upon the comments – will be implemented as part of the 2017 Disclosure template requirements effective January 31, 2017https://ifap.ed.gov/fregisters/attachments/FR091316.pdf

Gainful-Employment Rule Survives Court Challenge

gainful emplymentThe U.S. Education Department’s gainful-employment rule is one step closer to taking effect.

A federal judge on Tuesday rejected a serious legal challenge, brought by the Association of Private Sector Colleges and Universities, to the controversial rule. The lobbying group’slawsuit was the highest hurdle remaining for the proposed rule, which will judge career-oriented programs on their graduates’ ability to repay their student loans. The rule is slated to take effect on July 1.

The department originally introduced the rule in 2011. The effort was dealt a major setback a year later, when a section of the rule was thrown out as a result of an earlier court challenge by the association, the main lobbying group for for-profit colleges. The group’s second challenge, to a revised rule, used many of the same arguments, asserting that the department had exceeded its authority in issuing the rule and that the rule was capricious and arbitrary.

In his ruling on Tuesday, Judge John D. Bates of the U.S. District Court for the District of Columbia dismissed those claims, saying the association “throws a host of arbitrary-or-capricious arguments against the wall in hope of a different outcome. None of them stick.”

Arne Duncan, the secretary of education, said in a written statement that the ruling was “a win for America’s students and taxpayers.” He added that every student “who enrolls in college of any kind deserves a fair shot at a degree or credential that equips them for success,” and said the department would “continue to fight until that’s a reality.”

Also in a written statement, the private-sector association’s general counsel, Sally Stroup, said the group was “disappointed” in the court’s decision and was considering its options. “Indeed, as numerous commentators have observed, the primary impact of the regulation will be to deprive hundreds of thousands of students of access to higher education,” she added.

The final rule, which was released last fall, is expected to cause 1,400 programs, 99 percent of them at for-profit colleges, to be put at risk of losing eligibility for federal student aid.

The victory for the department occurred on the same day a committee of the U.S. Senate approved a spending bill that would ax the gainful-employment rule and the department’s college-ratings plan.

Link to Article on Chronicle: http://chronicle.com/blogs/ticker/gainful-employment-rule-survives-for-profit-groups-court-challenge/101079

Despite inaccuracies & heavy criticism, Department of Education Moves Ahead With ‘Gainful Employment’ Rule

Well so many of us tried & cried but it looks as though it’s moving ahead…

In its campaign to block the adoption of a new federal rule measuring how colleges prepare students for “gainful employment,” the for-profit-college industry and its allies have attacked the credibility of the Department of Education, questioning the processes it has followed in developing the new regulation and its competency in managing the kind of data that could eventually be used to cut off vital federal aid.

But despite the well-heeled opposition and recent evidence that the message is taking root — fueled in part by notable missteps by the Education Department in calculating data on default rates and by the yet-to-be explained errors of the Government Accountability Office in its widely publicized undercover investigation of several for-profit colleges — a retreat on the rule isn’t looking likely.

That became clearer last week when the department confirmed that it had made final revisions to the proposed gainful-employment rule and sent it on to the White House Office of Management and Budget, the final stop before it is made public in the Federal Register.

Click link below for full article text.

THE CHRONICLE OF HIGHER EDUCATION

Source:
The Chronicle of Higher Education

 

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