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OPPORTUNITY TO IMPROVE PROGRAM PERFORMANCE

A. Informational Rates

Proposal: The Department Should Issue One Complete Set Of Informational Rates 

To Provide Institutions The Opportunity To Assess How Their Programs 

Are Performing Under The New Metrics Before The Rule Takes Effect. 

We believe the Department has placed institutions in a difficult situation by 

requiring them to anticipate the proposed Rule’s impact before the metrics are finalized 

and published. We believe that most institutions impacted by the GE Rule – public, nonprofit or, for-profit – may not fully and adequately understand the proposed regulation 

or its impact on their institution.1Institutions should be given the opportunity to 

understand and assess the finalized metrics before they can determine what steps they 

need to take to improve program performance. 

We respectfully request that the Department issue one year of informational 

rates so institutions can see and understand their data and ensure they have an 

opportunity to improve program performance. These should be issued in draft form, 

without an appeal process, before leading to “final” informational rates.

We believe the Department might also benefit from this opportunity to develop 

and refine the data systems used for this regulation, since there have been so many 

questions about the accuracy of the Department’s data released on August 30, 2013. 

For example, these “informational rates” do not identify the OPEID Number of the 

reported programs, and institutions cannot make use of the data if they cannot identify 

their programs. In addition, the Department’s report on its methodology for these most 

recent informational rates noted that the Department could not obtain SSA matches for 

about 4,000 of the 6,000 programs that were reported to SSA, a substantial omission. 

Last, it is also important to note that even though the GE Rule has been discussed 

for several years, and the Department has released other “trial” or “informational” 

rates, these other rates have always been fragmentary. The Department has never 

completed one entire cycle of issuing draft rates so that institutions can understand the 

effects on their programs and students and have the opportunity to test the accuracy of 

the data. 

 

1

Some institutions have been working to reduce student debt based on the 2011 proposed 

Rule which included 12% and 30% debt to earnings ratios.
2

Our suggested changes to the text of the regulation are presented in red below:

NEW Section 668.408-A Informational Rates

(a) The Department will publish one complete set of informational rates following the 

regulation’s effective date. The publication shall identify all covered institutions 

and programs by OPEID and CIP code. 

(b) Institutions shall have the opportunity to challenge, but not appeal, such 

informational rates under the procedures at Section 668.405. 

(c) The informational rates shall not have any legal effect, and no consequences or 

requirements as described in Section 668.407 shall be imposed based on such 

informational rates.

B. Transition Period

Proposal: The Transition Period Should Be Revised To Provide Institutions A

Reasonable Opportunity To Improve Program Performance.

One of the Department’s stated goals for the GE Regulation is to give institutions 

the opportunity to improve program performance. However, as currently drafted, the 

rates calculated during the transition period rely on historical data, which will not offer 

institutions the appropriate opportunity to make changes necessary to improve 

performance before they are penalized.

The chart below was circulated at the recent Negotiated Rulemaking session in 

September as an explanation of the transition period set forth in Section 668.408 of the 

proposed Rule. 

2014-2015 2015-2016 2016-2017 2017-2018

Most Recently Completed 

Award Year

7/1/14 to 

6/30/15

7/1/15 to 

6/30/16

7/1/16 to 

6/30/17

7/1/17 to 

6/30/18

2YP (normal cohort) 2010-2011 2011-2012 2012-2013 2013-2014

2011-2012 2012-2013 2013-2014 2014-2015

SSA Earnings Year (Jan. 1 -

Dec. 31) 2014 2015 2016 2017

According to the chart, assuming that the Department requires six months to 

calculate and distribute D/E rates, institutions would receive their first set of D/E rates 

for the 2014-15 award year in January 2016. The chart above also demonstrates that 
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these rates would pertain to students who completed the program in 2010-11 and 

2011-12.

The proposed transition period does not provide an opportunity to improve.

We appreciate the Department’s efforts to add a transition period offering a 

chance to improve. However, even under the transition period’s provision permitting 

substitution of debt for “the most recently completed award year,” institutions will still 

be judged on retroactive data for students who graduated at least six months before 

institutions received their D/E rates. In short, no matter what debt reduction measures 

institutions take upon receipt of their D/E rates, they will not be able to improve 

performance in time to avoid the harsh penalties associated with program failure. 

Institutions can’t change the past; they only can affect the future. 

In support of the Department’s goal to give institutions the opportunity to apply 

corrective measures, we propose that after one year of informational rates, the 

transition period should be equal in length to the program length, and that all 

consequences under Section 668.407 are suspended during that time. This permits the 

institution the opportunity to have an impact on an entire graduating class. The 

suggested transition period lengths would therefore be as follows:

Credential Level Transition Period Length

Certificate Programs One year2

Associate Degree Programs Two years

Bachelor’s Degree Programs Four years

Master’s Degree Programs Two years

Graduating the transition period by credential level allows institutions an 

appropriate time to improve their programs. For example, if an institution receives 

notice that an associate degree program has a failing D/E rate in January 2016, the debt 

reduction strategies they adopt for the incoming freshman class in September would 

now have the potential to show positive results by the end of the two year period, 

without penalty. In contrast, the regulation as currently drafted provides no such 

opportunity.

If a program still has failing ratios at the end of the credential-specific transition 

period, it is fair and reasonable for penalties to be applied. During the transition period, 

it is also reasonable for the Department to require institutions with failing programs to 

submit formal Debt Reduction Plans, and show progress.

 

2

For a two year certificate, the transition period would be two years.
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Our suggested changes to the text of the regulation are presented in red below:

NEW Section 668.408-B Transition Period

(a) The length of a program’s transition period shall be equivalent to the number of 

years it takes to complete the program in normal time.

(a) (b) If a GE program would be a failing or zone program based on draft D/E rates 

calculated in accordance with §668.404 during a program’s transition period, for 

award years 2014-2015, 2015-2016, or 2016-2017, the Secretary calculates 

transitional draft D/E rates for the program by using –

(1) The median loan debt of the students who completed the program during 

the most recently completed award year; and

(2) The earnings used to calculate the original draft D/E rates.

(b) (c) During a program’s transition period For the award years listed in paragraph (a) 

if this section, the Secretary determines the final D/E rates for the program by using 

the lower of the draft D/E rates calculated under §668.405 or the transitional draft 

D/E rates calculated under this section. If a program fails during the transition 

period, the Secretary may require the institution to submit a formal Debt Reduction 

Plan.

(c) (d) The institution may correct the list of students or challenge the transitional draft 

D/E rates under the procedures in §668.405 and may appeal the final D/E rates under 

§668.406.

(d) (e) All consequences under §668.407 are suspended during a program’s transition 

period.