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Subpart Q – Gainful Employment (GE) Programs 

1. §668.401 Scope and purpose 

2. §668.402 Definitions 

3. §668.403 Gainful employment framework 

4. §668.404 Calculating D/E rates

5. §668.405 Issuing and challenging D/E rates 

6. §668.406 Alternate earnings appeals 

7. §668.407 Calculating pCDR 

8. §668.408 Issuing and challenging pCDR 

9. §668.409 Determining loan portfolio repayment performance 

10. §668.410 Issuing and challenging loan portfolio repayment 

performance determinations 

11. §668.411 Final determination and consequences of GE 

measures 

12. §668.412 Reporting requirements for GE programs 

13. §668.413 Disclosure requirements for GE programs 

14. §668.414 Calculating, issuing, and challenging completion, 

withdrawal, and repayment rates and median earnings 

15. §668.415 Application requirement for new GE programs 

16. §668.416 Certifications for GE programs 
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§668.401 Scope and purpose. This subpart applies to an 

educational program offered by an eligible institution that 

prepares students for gainful employment in a recognized 

occupation, and establishes the rules and procedures under 

which-- 

(1) The Secretary determines that the program is eligible 

for title IV, HEA program funds; 

(2) An institution reports information about the program 

to the Secretary; and 

(3) An institution discloses information about the program 

to students and prospective students. 
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§668.402 Definitions. The following definitions apply to this 

subpart. 

Annual earnings rate: The percentage of a GE program’s 

annual loan payment compared to the annual earnings of the 

students who completed the program, as calculated under 

§668.404. 

Classification of instructional program (CIP) code: A 

taxonomy of instructional program classifications and 

descriptions developed by the U.S. Department of Education’s 

National Center for Education Statistics (NCES). The CIP code 

for a program is six digits. For the purpose of this subpart, a 

CIP family of related programs shares the first two digits of a 

CIP code, and programs that are substantially similar to one 

another share the first four digits of a CIP code. 

Credential level: The level of the academic credential 

awarded by an institution to students who would complete the 

program. For purposes of this subpart, the credential levels 

are: less than one year undergraduate certificate or diploma, 

one year or longer but less than two years undergraduate 

certificate or diploma, two years or longer undergraduate 

certificate or diploma, associate degree, bachelor’s degree, 

post-baccalaureate certificate, master’s degree, doctoral 

degree, and first-professional degree. 
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Debt-to-earnings rates (D/E rates): The discretionary 

income rate and annual earnings rate as calculated under 

§668.404. 

Discretionary income rate: The percentage of a GE 

program’s annual loan payment compared to the discretionary 

income of the students who completed the program, as calculated 

under §668.404. 

Gainful employment program (GE program): An educational 

program offered by an institution under §668.8(c)(3) or (d) and 

identified by a combination of the institution’s six-digit 

Office of Postsecondary Education ID (OPEID) number, the 

program’s six-digit CIP code as assigned by the institution or 

determined by the Secretary, and the program’s credential level. 

GE measures: Collectively, the D/E rates, the program 

cohort default rate, and the GE program’s loan portfolio 

repayment performance as described in this subpart. 

Length of a program: The amount of time in weeks, months, 

or years that is specified in the institution’s catalog, 

marketing materials, or official publication for a student to 

complete the requirements needed to obtain the degree or 

credential offered by the program. 

Loan portfolio repayment performance: The measure of 

whether a GE program’s loan portfolio is negatively amortized, 

as calculated under §668.409. 
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Poverty Guideline: The Poverty Guideline for a single 

person in the continental United States as published by the U.S. 

Department of Health and Human Services and available at 

http://aspe.hhs.gov/poverty or its successor site. 

Program cohort default rate (pCDR): The percentage of a GE 

program’s students who defaulted on their loans, as calculated 

under §668.407. 

Student: A regular student, as defined in 34 CFR 600.2, 

who received title IV, HEA program funds for attending a GE 

program at an eligible institution. 

Two-year period: The period covering two consecutive award 

years that are-- 

(a) The third and fourth award years prior to the award 

year for which the D/E rates are calculated pursuant to 

§668.404. For example, if D/E rates are calculated for award 

year 2014-2015, the two-year period is award years 2010-2011 and 

2011-2012; or 

(b) For a program whose students are required to complete 

a medical or dental internship or residency, the sixth and 

seventh award years prior to the award year for which the D/E 

rates are calculated. For example, if D/E rates are calculated 

for award year 2014-2015, the two-year period is award years 

2007-2008 and 2008-2009. For this purpose, a required medical 
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or dental internship or residency is a supervised training 

program that-- 

(1) Requires the student to hold a degree as a doctor of 

medicine or osteopathy, or as a doctor of dental science; 

(2) Leads to a degree or certificate awarded by an 

institution of higher education, a hospital, or a health care 

facility that offers post-graduate training; and 

(3) Must be completed before the student may be licensed 

by a State and board certified for professional practice or 

service. 
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§668.403 Gainful employment program framework. 

(a) General. A program provides training that prepares 

students for gainful employment in a recognized occupation if 

the program-- 

(1) Satisfies the applicable application and certification 

requirements in §§668.415 and 668.416; and 

(2) Is not an ineligible program under the provisions for 

the D/E rates described in paragraph (b)(1), the provisions for 

the pCDR described in paragraph (b)(2), or because of the 

repayment performance of its loan portfolio as described in 

paragraph (b)(3). 

(b) GE measures. (1) Debt-to-earnings rates. For each 

award year and for each eligible GE program offered by an 

institution, the Secretary calculates two D/E rates, the 

discretionary income rate and the annual earnings rate, using 

the procedures in §§668.404-668.406. 

(2) Program cohort default rate. For each fiscal year and 

for each eligible GE program offered by an institution, the 

Secretary calculates the pCDR as described in §668.407. 

(3) Loan portfolio repayment performance. For each award 

year and for each eligible GE program offered by an institution, 

the Secretary determines whether the FFEL and Direct Loan 
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portfolio of the program is negatively amortized, using the 

procedures in §668.409. 

(c) Outcomes of GE measures. 

(1) D/E rates. 

(i) A GE program is “passing” the D/E rates if-- 

(A) Its discretionary income rate is less than or equal to 

20 percent; or 

(B) Its annual earnings rate is less than or equal to 

eight percent. 

(ii) A GE program is “failing” the D/E rates if-- 

(A) Its discretionary income rate is greater than 30 

percent or the income for the denominator of the rate is 

negative or zero; and 

(B) Its annual earnings rate is greater than 12 percent or 

the denominator is zero. 

(iii) A GE program is in the “zone” for the purpose of the 

D/E rates if it is not passing and its-- 

(A) Discretionary income rate is greater than 20 percent 

but less than or equal to 30 percent; or 

(B) Annual earnings rate is greater than eight percent but 

less than or equal to 12 percent. 

(iv) For the purpose of the D/E rates, a GE program is 

ineligible if it-- 
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(A) Is failing the D/E rates in two out of any three 

consecutive award years for which the program’s D/E rates are 

calculated; or 

(B) Is not passing the D/E rates in one out of any four 

consecutive award years for which the program’s D/E rates are 

calculated. 

(2) pCDR. 

(i) A GE program is “passing” pCDR if its pCDR for the 

most recent fiscal year for which pCDR is calculated is less 

than 30 percent. 

(ii) A GE program is “failing” pCDR if its pCDR for the 

most recent fiscal year for which pCDR is calculated is greater 

than or equal to 30 percent unless the GE program is ineligible 

under paragraph (c)(2)(iii)(A). 

(iii) For the purpose of pCDR, a GE program is ineligible 

if-- 

(A) Its pCDR for the most recent fiscal year for which 

pCDR is calculated is greater than 40 percent; or 

(B) It fails pCDR for three consecutive fiscal years for 

which pCDR is calculated. 

(3) Loan portfolio repayment performance. 

(i) A GE program’s loan portfolio repayment performance is 

“passing” if its loan portfolio for the most recent award year 
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for which the loan portfolio repayment performance is determined 

is not negatively amortized. 

(ii) A GE program’s loan portfolio repayment performance 

is “failing” if its loan portfolio for the most recent award 

year for which the loan portfolio repayment performance is 

determined is negatively amortized. 

(iii) For the purpose of loan portfolio repayment 

performance, a GE program is ineligible if it fails in two out 

of any three consecutive award years for which the loan 

portfolio repayment performance is measured. 
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§668.404 Calculating D/E rates.

(a) General. For each award year, the Secretary 

calculates D/E rates for a GE program as follows: 

(1) Discretionary income rate = annual loan payment / (the 

higher of the mean or median annual earnings – (1.5 x Poverty 

Guideline)). 

(2) Annual earnings rate = annual loan payment / the 

higher of the mean or median annual earnings. 

(b) Annual loan payment. The Secretary calculates the 

annual loan payment for a program by-- 

(1) Determining the median loan debt of the students who 

completed the program during the two-year period, based on the 

loan debt incurred by each student as determined under paragraph 

(d) of this section; and 

(2) Amortizing the median loan debt over a 10-year 

repayment period using the lowest annual interest rate on 

Federal Direct Unsubsidized Loans for undergraduate students 

during the four years prior to the start of the two-year period. 

(c) Annual earnings. (1) The Secretary obtains from the 

Social Security Administration (SSA), under §668.405, the most 

currently available mean and median annual earnings of the 

students who completed the GE program during the two-year period 

and who are not excluded under paragraph (e); and 
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(2) The Secretary uses the higher of the mean or median 

annual earnings to calculate the D/E rates. 

(d) Loan debt. In determining the loan debt for a 

student, the Secretary-- 

(1) Includes the amount of FFEL and Direct Loans that the 

student borrowed for attendance in the GE program (PLUS Loans 

made to parents of dependent students or Direct Unsubsidized 

Loans that were converted from TEACH Grants are not included), 

any private education loans reported by the institution, and any 

debt originating from the institution, such as from 

institutional financing or payment plans, that the student is 

obligated to repay upon the student’s completion of the program 

regardless of who holds the debt; 

(2) Attributes all of the loan debt incurred by the 

student for attendance in any GE program at the institution to 

the highest credentialed GE program completed by the student at 

the institution; and 

(3) Excludes any loan debt incurred by the student for 

attendance in programs at other institutions. However, the 

Secretary may include loan debt incurred by the student for 

attending programs at other institutions if the institution and 

the other institutions are under common ownership or control, as 

determined by the Secretary in accordance with 34 CFR 600.31. 
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(e) Exclusions. The Secretary excludes a student from the 

D/E rate calculations if the Secretary determines that-- 

(1) One or more of the student’s FFEL loans or Direct 

Loans were in a military-related deferment status for at least 

60 consecutive days during the calendar year for which the 

Secretary obtains earnings information under paragraph (c); 

(2) One or more of the student’s FFEL loans or Direct 

Loans are under consideration by the Secretary, or have been 

approved, for a discharge on the basis of the student’s total 

and permanent disability, under 34 CFR 682.402 and 685.212; 

(3) The student was enrolled on at least a half-time basis 

for at least 60 consecutive days in an eligible institution 

during the calendar year for which the Secretary obtains 

earnings information under paragraph (c); 

(4) The student completed a higher credentialed GE program 

at the institution subsequent to completing the program; or 

(5) The student died. 

(f) D/E rates not calculated. The Secretary does not 

calculate D/E rates for a GE program if-- 

(1) Fewer than 10 students completed the program during 

the two-year period; or 

(2) SSA does not provide the mean and median earnings for 

the program as provided under paragraph (c). 

(g) Transition period. 
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(1) If a GE program would be failing or in the zone based 

on its draft D/E rates calculated in accordance with paragraphs 

(a)-(f) for award years 2014-2015, 2015-2016, 2016-2017, or 

2017-2018 the Secretary calculates transitional draft D/E rates 

for the program by using-- 

(A) The median loan debt of the students who completed the 

program during the most recently completed award year; and 

(B) The earnings used to calculate the draft D/E rates 

under paragraph (c). 

(2) For the award years listed in paragraph (g)(1) of 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 paragraphs (a)-(f) or the transitional draft D/E rates 

calculated under this paragraph (g). 

(3) The institution may challenge the transitional draft 

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

transitional final D/E rates under §668.406. 
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§668.405 Issuing and challenging D/E rates. 

(a) Overview. For each award year beginning with award 

year 2014-2015, the Secretary determines the D/E rates for a GE 

program at an institution by-- 

(1) Creating a list of the students who completed the 

program during the applicable two-year period and providing it 

to the institution, under paragraph (b) of this section; 

(2) Allowing the institution to correct the information 

about the students on the list, as provided in paragraph (c) of 

this section; 

(3) Obtaining from SSA the mean and median annual earnings 

of the students on the list, as provided in paragraph (d) of 

this section; 

(4) Calculating draft D/E rates and providing it to the 

institution, as described in paragraph (e) of this section; 

(5) Allowing the institution to challenge the median loan 

debt used to calculate the draft D/E rates, as provided in 

paragraph (f) of this section; 

(6) Calculating final D/E rates and providing it to the 

institution, as provided in paragraph (g) of this section; and 

(7) If the program could become ineligible based on its 

final D/E rates for the next award year for which D/E rates are 

calculated, allowing the institution to appeal the final D/E 
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rates by submitting an alternate earnings data survey, as 

provided in §668.406. 

(b) Creating the list of students. (1) The Secretary 

selects the students to be included on the list by-- 

(i) Identifying the students who completed the program 

during the applicable two-year period from the data provided by 

the institution under §668.412; and 

(ii) Removing any student who is excluded under 

§668.404(e). 

(2) The Secretary provides the list to the institution. 

(c) Institutional corrections to the list. (1) The 

Secretary presumes that the list of students and the identity 

information for those students are correct unless, as set forth 

in procedures established by the Secretary, the institution 

provides evidence to the contrary satisfactory to the Secretary. 

The institution bears the burden of proof that the list is 

incorrect. 

(2) No later than 30 days after the date the Secretary 

provides the list to the institution, the institution may-- 

(i) Provide evidence showing that a student should be 

included on or removed from the list pursuant to §668.404(e); or 

(ii) Correct or update a student’s identity information 

and the student’s program attendance information provided for a 

student on the list. 
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(3) After the 30-day period expires, the institution may 

no longer seek to correct the list of students or revise the 

identity or program information of those students. 

(4) The Secretary considers the evidence provided by the 

institution and either accepts the correction or notifies the 

institution of the reasons for not accepting the correction. If 

the Secretary accepts the correction, the Secretary uses the 

corrected information to create the final list. 

(d) Obtaining earnings data. The Secretary submits the 

final list to SSA. For purposes of this section, SSA returns to 

the Secretary-- 

(1) The mean and median earnings of the students on the 

list whom SSA has matched to SSA earnings data, in aggregate and 

not in individual form; and 

(2) The number, but not the identities, of students on the 

list that SSA could not match. 

(e) Calculating draft D/E rates. (1) The Secretary uses 

the higher of the mean or median annual earnings provided by SSA 

to calculate draft D/E rates for a GE program, as provided in 

§668.404. 

 (2) If SSA reports that it was unable to match one or more 

of the students on the final list, the Secretary does not 

include in the calculation of the median loan debt the same 

number of the highest loan debts as the number of students whose 
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earnings SSA did not match. For example, if SSA is unable to 

match three students, the Secretary does not include the three 

highest loan debts in the calculation of the median loan debt. 

(3)(i) The Secretary notifies the institution of the draft 

D/E rates for a GE program and provides the mean and median 

earnings obtained from SSA and the individual student loan 

information used to calculate the rates, including the loan debt 

for each student. 

(ii) The draft D/E rates and the data described in 

paragraphs (b) through (e) of this section are not considered 

public information. 

 (f) Institutional challenges to draft D/E rates. 

(1) The Secretary presumes that the loan debt information 

used to calculate the median loan debt for the program under 

§668.404 is correct unless the institution provides evidence, as 

provided in paragraph (f)(2), that the information is 

inaccurate. The institution bears the burden of proof to show 

that the loan debt information is incorrect, and to show how it 

should be corrected. 

(2) No later than 45 days after the Secretary notifies an 

institution of the draft D/E rates for a GE program, the 

institution may challenge the accuracy of the loan debt 

information that the Secretary used to calculate the median loan 

debt for the program under §668.404 by submitting evidence, in a 
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format and process determined by the Secretary, demonstrating 

that the median loan debt calculated by the Secretary is 

inaccurate. 

(3) In a challenge under this section, the Secretary does 

not consider-- 

(i) Any objection to the mean or median annual earnings 

that SSA provided to the Secretary; 

(ii) More than one challenge to the student-specific data 

on which a draft D/E rate is based for a GE program for an award 

year; or 

(iii) Any challenge that is not timely submitted. 

(4) The Secretary considers the evidence provided by an 

institution challenging the median loan debt and notifies the 

institution of whether the challenge is accepted or the reasons 

why the challenge is not accepted. 

(5) If the information from an accepted challenge changes 

the median loan debt of the program, the Secretary recalculates 

the program’s draft D/E rates. 

(6) Except as provided under §668.406, an institution that 

does not timely challenge the draft D/E rates for a program 

waives any objection to those rates. 

(g) Final D/E rates. (1) After expiration of the 45-day 

period and subject to resolution of any challenge under 
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paragraph (f) of this section, a GE program’s draft D/E rates 

constitute its final D/E rates. 

(2) The Secretary informs the institution of the final D/E 

rates for each of its GE programs by issuing the notice of 

determination described in §668.411(a). 

(3) After the Secretary provides the notice of 

determination to the institution, the Secretary may publish the 

final D/E rates for the program. 

(h) Conditions for corrections, challenges, and appeals. 

An institution must ensure that any material that it submits to 

make any correction or challenge under this section, or an 

appeal under §668.406, is complete, timely, accurate, and in a 

format acceptable to the Secretary as described in this subpart 

and consistent with any instructions provided to the institution 

with the notice of its draft D/E rates and the notice of 

determination. 
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§668.406 Alternate earnings appeals for D/E rates. 

(a) General. If a GE program could become ineligible 

based on its final D/E rates for the next award year for which 

D/E rates are calculated,  an institution may appeal its most 

recent final D/E rate by proving that the difference between the 

mean or median annual earnings the Secretary obtained from SSA 

and the mean or median annual earnings derived from an 

institutional survey conducted in accordance with the 

requirements in paragraph (b) of this section is sufficient to 

warrant revision to the final D/E rates.

(b) Survey requirements. To appeal a final D/E rate under 

this section, an institution must-- 

(1) Conduct a survey of earnings information from students 

who completed the program during the applicable two-year period 

by following the instructions contained in an NCES-developed 

Earnings Survey Form issued by the Secretary in a notice 

published in the Federal Register. The institution may include 

in the survey earnings information obtained from students who 

completed the program in the applicable two-year period who did 

not receive title IV, HEA program funds in addition to students 

who completed the program in the applicable two-year period who 

received title IV, HEA program funds; 

(2) Certify that the survey was conducted in accordance 

with the requirements of the NCES Earnings Survey Form; and 
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(3) Submit an examination–level attestation engagement 

report prepared by an independent public accountant or 

independent governmental auditor, as appropriate, that the 

survey was conducted in accordance with the standards set forth 

in the NCES Earnings Survey Form. The attestation must be 

conducted in accordance with the attestation standards contained 

in the Government Accountability Office’s Government Auditing 

Standards promulgated by the Comptroller General of the United 

States (available at www.gao.gov/yellowbook/overview or its 

successor site), and with procedures for attestations contained 

in guides developed by and available from the Department of 

Education's Office of Inspector General. 

(c) Alternate earnings appeal procedure. 

(1) In accordance with procedures established by the 

Secretary and provided in the notice of draft D/E rates under 

§668.405 and the notice of determination under §668.411, the 

institution must-- 

(i) Notify the Secretary of its intent to use survey 

earnings data no earlier than the date that the Secretary 

provides the institution with its draft D/E rates, pursuant to 

§668.405(f), but no later than three business days after the 

date the Secretary issues the notice of determination, pursuant 

to §668.405(g), informing the institution of its final D/E rates 

under §668.411(a); and 
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(ii) Submit the survey of earnings and all supporting 

documentation as provided for under paragraph (b) of this 

section no later than 60 days after the date the Secretary 

issues the notice of determination. 

(2) An institution that timely submits an alternate 

earnings appeal that meets the requirements of this section is 

not subject to the provisions of §668.411(c)-(e) while the 

Secretary considers the appeal. If the Secretary has published 

final D/E rates under §668.405(g), the program’s final D/E rates 

will reflect that they are under appeal. 

(3)(i) If the Secretary determines that the institution’s 

appeal submission is not sufficient to warrant revising the 

final D/E rates under §668.411(a), the Secretary notifies the 

institution of the reasons for the decision, and the D/E rates 

under §668.411(a) remain the final D/E rates for the program for 

the award year; or 

(ii) If the Secretary determines that the institution’s 

appeal submission is sufficient to warrant revising the final 

D/E rates, the Secretary recalculates the D/E rates and notifies 

the institution that the recalculated D/E rates are the final 

D/E rates for the program for the award year under §668.411(a). 

If the Secretary has published final D/E rates under 

§668.405(g), the program’s published rates will be updated to 

reflect the new final rates.
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§668.407 Calculating pCDR. 

(a) General. For each fiscal year, the Secretary 

determines the pCDR of a GE program using the same methodology 

the Secretary uses to calculate the institutional cohort default 

rate (CDR) under subpart N of this part. 

(b) References in subpart N. In applying the procedures 

and standards in subpart N to calculate pCDR, the Secretary 

considers each reference to the “institution” to apply 

separately to the institution with respect to each of the GE 

programs at the institution, and considers each provision that 

describes an action, determination, or consequence that applies 

to “you” as stating an action, determination, or consequence to 

apply to the institution separately with respect to each of the 

GE programs at the institution. 
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§668.408 Issuing and challenging pCDR. 

 (a) General. For each fiscal year, the Secretary notifies 

the institution of the pCDR for a GE program determined under 

§668.407. The institution may challenge or appeal the pCDR 

under the procedures in subpart N of this part. 

 (b) References in subpart N. In applying the procedures 

in subpart N to this section, the Secretary considers each 

reference to the “institution” to apply separately to each of 

the GE programs at the institution, and considers each provision 

that describes an action, determination, or consequence to apply 

to “you” as stating an action, determination, or consequence to 

apply separately to each of the GE programs at the institution.
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§668.409 Determining loan portfolio repayment performance. 

(a) General. For each award year, the Secretary 

determines whether the loan portfolio of a GE program is 

negatively amortized by-- 

(1) Determining the outstanding principal balance of the 

portfolio at the beginning of the most recently completed award 

year. The beginning outstanding principal balance includes any 

unpaid interest that has been capitalized; 

(2) Determining the outstanding principal balance of the 

GE program’s loan portfolio at the end of the most recently 

completed award year; and 

(3) Comparing the beginning and ending outstanding 

principal balances of the GE program’s loan portfolio. If the 

ending outstanding principal balance is greater than the 

beginning outstanding principal balance, the portfolio is 

negatively amortized. 

(b) Loan portfolio. For the purposes of this section, the 

loan portfolio of a GE program is comprised of the FFEL and 

Direct Loans for students who were enrolled in the GE program 

and who entered repayment on those loans during the two-year 

period.
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(c) Exclusions. The Secretary excludes a student from the 

loan portfolio repayment performance calculations if the 

Secretary determines that-- 

(1) One or more of the student’s FFEL loans or Direct 

Loans were in a military-related deferment status for at least 

60 consecutive days during the calendar year for which the 

Secretary obtains earnings information under paragraph (c) of 

this section; 

(2) One or more of the student’s FFEL loans or Direct 

Loans are under consideration by the Secretary, or have been 

approved, for a discharge on the basis of the student’s total 

and permanent disability, under 34 CFR 682.402 and 685.212; 

(3) The student was enrolled on at least a half-time basis 

for at least 60 consecutive days in an eligible institution 

during the calendar year for which the Secretary obtains 

earnings information under paragraph (c) of this section; 

(4) The student completed a higher credentialed GE program 

at the institution subsequent to completing the program; or 

(5) The student died. 
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§668.410 Issuing and challenging loan portfolio performance 

determinations. 

(a) Overview. For each award year beginning with award 

year 2014-2015, the Secretary determines the loan portfolio 

performance for a GE program at an institution by-- 

(1) Creating a list of the students who were enrolled in 

the GE program and entered repayment during the applicable twoyear period and providing it to the institution, under paragraph 

(b) of this section; 

(2) Allowing the institution to correct the information 

about the students on the list, as provided in paragraph (c) of 

this section; 

(3) Making an initial determination of the loan 

portfolio’s performance and notifying the institution, as 

provided in paragraph (d) of this section; 

(4) Allowing the institution to challenge the beginning 

and ending outstanding principal balances of the GE program’s 

loan portfolio used to make the initial determination of the 

loan portfolio’s performance, as provided in paragraph (e) of 

this section; and 

(5) Making a final determination of the loan portfolio’s 

repayment performance and notifying the institution, as provided 

in paragraph (f) of this section. 
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29

(b) Creating the list of students. (1) The Secretary 

selects the students to be included on the list by-- 

(i) Identifying the students who were enrolled in the GE 

program and entered repayment during the applicable two-year 

period from the data provided by the institution under §668.412; 

and 

(ii) Removing any student who is excluded under 

§668.409(c). 

(2) The Secretary provides the list to the institution. 

(c) Institutional corrections to the list. (1) The 

Secretary presumes that the list of students and the identity 

information for those students are correct unless the 

institution provides evidence to the contrary satisfactory to 

the Secretary. The institution bears the burden of proof that 

the list is incorrect. 

(2) No later than 30 days after the date the Secretary 

provides the list to the institution, the institution may-- 

(i) Provide evidence showing that a student should be 

included on or removed from the list pursuant to §668.409(c); or 

(ii) Correct or update a student’s identity information 

and the student’s program attendance information provided for a 

student on the list. 
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30

(3) After the 30-day period expires, the institution may 

no longer seek to correct the list of students or revise the 

identity or program information of those students. 

(4) The Secretary considers the evidence provided by the 

institution and either accepts the correction or notifies the 

institution of the reasons for not accepting the correction. If 

the Secretary accepts the correction, the Secretary uses the 

corrected information to create the final list. 

(d) Initial determination of loan portfolio performance.

 (1) The Secretary makes an initial determination of the GE 

program’s loan portfolio performance, as provided in §668.409. 

 (2) The Secretary notifies the institution of the initial 

determination of the GE program’s loan portfolio performance and 

provides the beginning and ending outstanding principal balances 

used to make the determination. 

(3) The initial determination of loan portfolio 

performance and the data described in paragraphs (b) through (d) 

of this section are not considered public information. 

(e) Institutional challenges to initial determination of 

loan portfolio performance. (1) The Secretary presumes that 

the beginning and ending outstanding principal balances used to 

make the initial determination of the GE program’s loan 

portfolio repayment performance under §668.409 are correct 

unless the institution provides, as provided in paragraph 
DRAFT FOR DISCUSSION PURPOSES – 11/08/2013

31

(e)(2), that the information is inaccurate. The institution 

bears the burden of proof to show that the outstanding principal 

balance information is incorrect, and to show how it should be 

corrected. 

(2) No later than 45 days after the Secretary notifies an 

institution of the initial determination of loan portfolio 

performance for a GE program, the institution may challenge the 

accuracy of the beginning and ending outstanding principal 

balances that the Secretary used to make the initial 

determination for the program under §668.409 by submitting 

evidence, in a format and process determined by the Secretary, 

demonstrating that the outstanding principal balances are 

inaccurate. 

(3) In a challenge under this section, the Secretary does 

not consider-- 

(ii) More than one challenge to the student-specific data 

on which an initial determination of a GE program’s loan 

portfolio performance is based for an award year; or 

(iii) Any challenge that is not timely submitted. 

(4) The Secretary considers the evidence provided by an 

institution challenging the beginning or ending outstanding 

principal balances, or both, and notifies the institution of 

whether the challenge is accepted or the reasons why the 

challenge is not accepted. 
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32

(5) If the information from an accepted challenge changes 

the beginning or ending principal balances, or both, of the 

program, the Secretary revises the determination of the GE 

program’s loan portfolio repayment performance. 

(6) An institution that does not timely challenge the 

initial determination of a GE program’s loan portfolio repayment 

performance waives any objection to that determination. 

(f) Final determination of loan portfolio performance.

 (1) After expiration of the 45-day period and subject to 

resolution of any challenge under paragraph (e) of this section, 

a GE program’s initial determination of loan portfolio 

performance constitute its final determination of loan portfolio 

performance. 

(2) The Secretary informs the institution of the final 

determination of loan portfolio performance for each of its GE 

programs by issuing the notice of determination described in 

§668.411(a). 

(3) After the Secretary provides the notice of 

determination to the institution, the Secretary may publish the 

final determination of loan portfolio performance for the GE 

program. 

(g) Conditions for corrections, challenges, and appeals. 

An institution must ensure that any material that it submits to 

make any correction or challenge under this section is complete, 
DRAFT FOR DISCUSSION PURPOSES – 11/08/2013

33

timely, accurate, and in a format acceptable to the Secretary as 

described in this subpart and consistent with any instructions 

provided to the institution with the notice of initial 

determination of loan portfolio performance. 
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34

§668.411 Final determination and consequences of GE measures. 

(a) Notice of determination. For each award or fiscal 

year in which the Secretary calculates a GE measure for a GE 

program, the Secretary issues a notice of determination 

informing an institution of the following: 

(1) For the D/E rates-- 

(i) The final rates for the program as determined under 

§668.404, §668.405 and, if applicable, §668.406; 

(ii) The final determination by the Secretary of whether 

the program is passing, failing, in the zone, or ineligible, as 

described in §668.403, and the consequences of that 

determination; 

(iii) Whether the program could become ineligible based on 

its final D/E rate for the next award year for which D/E rates 

are calculated; 

(iv) Whether the institution is required to provide 

student warnings under paragraph (c); whether the program is 

subject to the enrollment limits in paragraph (d)(3); and 

whether the institution must satisfy the requirements for 

borrower relief for students under paragraph (e); and 

(v) If the program could become ineligible based on its 

final D/E rates for the next award year for which D/E rates are 
DRAFT FOR DISCUSSION PURPOSES – 11/08/2013

35

calculated, instructions for appealing a final D/E rate, 

pursuant to §668.406. 

(2) For the pCDR-- 

(i) The final pCDR for the program as determined under 

§668.407 and §668.408; 

(ii) The final determination of the Secretary of whether 

the program is passing, failing, or ineligible, as described in 

§668.403, and the consequences of that determination; and 

(iii) Whether the institution is required to provide 

student warnings under paragraph (c); whether the program is 

subject to the enrollment limits in paragraph (d)(3); and 

whether the institution must satisfy the requirements for 

borrower relief for students under paragraph (e). 

(3) For the loan portfolio performance-- 

(i) Whether the loan portfolio is negatively amortized, as 

determined under §§668.409 and 668.410; 

(ii) The final determination of the Secretary of whether 

the program is passing, failing, or ineligible, as described in 

§668.403, and the consequences of that determination; and 

(iii) Whether the institution is required to provide 

student warnings under paragraph (c); whether the program is 

subject to the enrollment limits in paragraph (d)(3); and 

whether the institution must satisfy the requirements for 

borrower relief for students under paragraph (e). 
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36

(b) Effective date of Secretary’s final determination.

 The Secretary’s determination as to a GE measure is 

effective on the date that is specified in the notice of 

determination. The determination, including, as applicable, the 

determination with respect to an appeal under §668.406, 

constitutes the final decision of the Secretary with respect to 

that GE measure and the Secretary provides no further appeal of 

that determination. 

(c) Student warnings. For any year for which the 

Secretary notifies an institution that a GE program could become 

ineligible based on a final GE measure for the next award or 

fiscal year for which the GE measures are calculated, the 

institution-- 

(1) For each enrolled student, must provide a written 

warning directly to each student enrolled in the program no 

later than 30 days after the date of the notice of 

determination. The warning must-- 

(i) State that: “You may not be able to use federal 

student grants or loans to pay for this program after [insert 

date] next year because this program is in danger of losing its 

eligibility under U.S. Department of Education gainful 

employment rules. That means recent graduates are not earning 

enough compared to how much they took out in student loans,” or 

because the program fails other standards established by the 

Comment [A1]: Also require a warning to

enrolled students in programs that enter the

“zone” that the program did not pass one or

more of the gainful employment standards.
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37

U.S. Department of Education. The Department set these standards 

to help ensure that students are able to find gainful employment 

and not burdened by debt they struggle to repay. Programs in 

violation of these standards risk losing access to federal 

funds” or any alternative warning language specified by the 

Secretary in a notice published in the Federal Register;

OR USE THIS LANGUAGE IN LIEU OF THE ABOVE LANGUAGE: 

“You may not be able to use federal student grants or loans 

to pay for this program after [insert date]. 

WHY WOULDN’T I BE ABLE TO USE STUDENT LOANS AND GRANTS?

[Recent graduates are not earning enough to pay their 

student loans off in the regular 10 year payment period.] 

or [The program fails certain standards.] The U.S. 

Department of Education set these standards to help ensure 

students can find gainful employment and not be burdened by 

debt they struggle to repay. 

WHAT ARE MY OPTIONS? 

We will not know until [insert date]if loans and grants 

will still be available after [insert date]. You 

can[cannot] transfer to [indicate program] or [any other 

program offered by [school].] You can [cannot] continue and 

complete this program. [Or:] As of [date] we will no longer 

offer this program. 

CAN I GET A REFUND? 

Comment [A2]: Do we need this? What

does this refer to?  What other standards are

there that would trigger ineligibility but

students’ ability to repay debt?

Comment [A3]: Check against Zauderer.

Comment [A4]: Require student testing as

well as publishing.   

Formatted: Indent: Left: 0.5", First line: 

0"
DRAFT FOR DISCUSSION PURPOSES – 11/08/2013

38

We will not give a refund. [or] We will refund all school 

charges if you decide by [insert by which students must 

request refund], that you do not to continue with the 

program. 

(ii) Describe the options available to the student to 

continue his or her education at the institution, or at another 

institution, in the event that the program loses its eligibility 

for title IV, HEA program funds; and 

(iii) Indicate whether or not the institution will-- 

(A) Allow the student to transfer to another program at 

the institution; 

(B) Continue to provide instruction in the program to 

allow the student to complete the program; and 

(C) Refund the tuition, fees, and other required charges 

paid by, or on behalf of, the student for attending the program. 

(2) For each prospective student-- 

(i) At the time the prospective student first contacts the 

institution about the GE program and at the time the student 

signs an enrollment agreement or otherwise commits to enroll in 

the GE program, must provide a written warning directly to the 

student stating: “You may not be able to use federal student 

grants or loans to pay for this program next year because recent 

graduates are not earning enough compared to how much they took 

Formatted: Indent: Left: 0.5", First line: 

0"
DRAFT FOR DISCUSSION PURPOSES – 11/08/2013

39

out in student loans, or because the program fails other 

standards established by the U.S. Department of Education. The 

Department set these standards to help ensure that students are 

able to find gainful employment and not burdened by debt they 

struggle to repay. Programs in violation of these standards risk 

losing access to federal funds” or any alternative language 

specified by the Secretary in a notice published in the Federal 

Register; and 

(ii) May not enroll the prospective student in the GE 

program earlier than-- 

(A) Three business days after the warning was first 

provided to the prospective student; or 

(B) If more than 30 days pass from the date the warning is 

first provided to the prospective student, three business days 

after the institution provides another warning as required by 

paragraph (c)(2)(i) of this section. 

(d) Restrictions. (1) Ineligible program. Except as 

provided in §668.26(d), an institution may not disburse title 

IV, HEA program funds to students enrolled in an ineligible 

program. 

(2) Period of ineligibility. An institution may not seek 

to reestablish the eligibility of a failing or zone program that 

it voluntarily discontinued, reestablish the eligibility of an 

ineligible program, or establish the eligibility of a program 
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40

that is substantially similar to the discontinued or ineligible 

program, until the end of the third award year following the 

award year the program was discontinued became ineligible. 

(3) Enrollment limit. For the 12-month period beginning 

on the first day of the month after the Secretary notifies an 

institution that a GE program could become ineligible based on a 

final GE measure for the next award or fiscal year for which the 

GE measure is calculated, except for a GE program that could 

become ineligible as a result of being determined to be in the 

zone for the next award year for which D/E rates are calculated, 

the total number of students eligible for title IV, HEA program 

funds enrolled in the program may not exceed the number of 

students, less any noncompleters, receiving title IV, HEA 

program funds who were enrolled in the program during the 

previous 12 months.

(4) Restoring eligibility. An ineligible program, or a 

failing or zone program that an institution voluntarily 

discontinues, remains ineligible until the institution 

reestablishes the eligibility of that program under §668.415. 

For this purpose, an institution voluntarily discontinues a 

failing or zone program on the date the institution provides 

written notice to the Secretary that it relinquishes the title 

IV, HEA program eligibility of that program. 
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41

(e) Borrower relief. (1) For any year in which the 

Secretary notifies an institution that a GE program could become 

ineligible based on a final GE measure for the next award or 

fiscal year for which the GE measure is calculated, the 

Secretary requires the institution to provide for borrower 

relief for (a) students currently enrolled in, and borrowing to 

attend, the program, and (b) students previously enrolled in, 

and who borrowed to attend the program in the years during which

the program failed or did not pass the gainful employment 

measures, upon which ineligibility was predicated. 

(2) An institution provides for borrower relief under this 

paragraph by making available to the Department sufficient funds 

to pay the excess portion of the Federal GE program loans for 

currently enrolled students if the program becomes ineligible, 

by-- 

(i) Submitting a letter of credit (LOC) to the Department 

or modifying, to the extent required, an LOC previously 

submitted to the Department; 

(ii) Entering into a borrower relief set-aside agreement 

with the Department as described in paragraph (e)(3); or 

(iii) In the case of a public institution, ensuring that 

the obligation to provide borrower relief is backed by the full 

faith and credit of the State. 
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42

(3) A borrower relief set-aside agreement is an agreement 

with the Secretary under which— 

(i) The Secretary sets aside a portion of the Direct Loan 

program funds that the institution would otherwise request under 

34 CFR 668.162 for the purpose of providing borrower relief; 

(ii) The amount set aside is the amount the Secretary 

considers sufficient to accumulate the borrower relief amount 

from those funding requests likely to be made up to the 

projected date when new draft GE measures are released; and 

(iii) The institution agrees to disburse the full amount 

of Direct Loan program funds awarded to students but to request 

Federal funds for that disbursement in the amount of the 

disbursement less the amount needed to accumulate the borrower 

relief. 

(4) The excess portion of Federal GE program loans for each 

currently enrolled student is the amount needed to reduce the GE 

program’s median loan debt to pass the applicable GE measure. 

(5) If borrower relief is required under two or more GE 

measures, the amount required is the largest of the amounts 

determined under this paragraph (e). 

(6) The Secretary provides the institution the data used to 

calculate the borrower relief amount. 

(7) The institution may challenge the Secretary’s 

determination of the borrower relief amount by providing: 
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43

(i) Evidence satisfactory to the Secretary that-- 

(A) The Secretary inaccurately calculated the borrower 

relief amount; or 

(B) The borrower relief amount should be reduced or 

eliminated because currently enrolled students are borrowing in 

smaller amounts than did the students included in the cohort of 

students on which the GE measure was based; and 

(ii) An LOC or entering into and promptly implementing a 

set-aside agreement to provide borrower relief in an amount 

equal to the institution’s proposed borrower relief amount 

pending the Secretary’s final determination of the borrower 

relief amount under paragraph (e)(8). 

(8) The Secretary considers the information provided by the 

institution in any challenge and issues a final determination to 

the institution of the borrower relief amount. The institution 

modifies any LOC provided, and the institution and the 

Department amend any set-aside agreement entered into, under 

paragraph (e)(7)(ii) to reflect the Secretary’s final 

determination of the borrower relief amount. 

(9) If the program ceases to be at risk of becoming 

ineligible in the next year, the Secretary releases the LOC for 

the purpose of this paragraph (e) or terminates the set-aside 

agreement, unless the LOC or set-aside agreement is required, 
DRAFT FOR DISCUSSION PURPOSES – 11/08/2013

44

with or without modification, to provide borrower relief arising 

from a GE measure in that next year. 
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45

§668.412 Reporting requirements for GE programs. 

(a) In accordance with procedures established by the 

Secretary, an institution must report-- 

(1) For each student enrolled in a GE program during an 

award year-- 

(i) Information needed to identify the student and the 

institution the student attended; 

(ii) The name, CIP code, the six-digit SOC code, 

credential level, and length of the program; 

(iii) The tuition and fees charged the student for the 

program; 

(iv) Whether the program is a medical or dental program 

whose students are required to complete an internship or 

residency, as described in §668.402; 

(v) The date the student began initial attendance in the 

program; and 

(vi) The student’s attendance dates and enrollment status 

in the program during the award year; 

(2) If the student completed or withdrew from the GE 

program during the award year-- 

(i) The date the student completed or withdrew from the 

program; 
DRAFT FOR DISCUSSION PURPOSES – 11/08/2013

46

(ii) The total amount the student received from private 

education loans for attendance in the program; and 

(iii) The total amount of institutional debt the student 

owes any party upon completing or withdrawing from the program; 

and 

(3) As described in a notice published by the Secretary in 

the Federal Register, any other information the Secretary 

requires the institution to report. 

(b)(1) An institution must report the information required 

under paragraph (a) of this section no later than-- 

(i) July 31, 2015, for information from the 2010-2011, 

2011-2012, 2012-2013, and the 2013-2014 award years; and 

(ii) For the 2014-2015 award year and subsequent award 

years, October 1 following the end of the award year, unless the 

Secretary establishes a later date in a notice published in the 

Federal Register. 

(2) For any award year, if an institution is unable to 

provide all or some of the information in paragraph (a) of this 

section, the institution must provide the Secretary with an 

explanation of why the missing information is not available. 
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47

§668.413 Disclosure requirements for GE programs. 

(a) Disclosure template. An institution must use the 

disclosure template provided by the Secretary to disclose 

information about each of its GE programs to enrolled and 

prospective students. The Secretary conducts consumer testing 

of a disclosure template and identifies the information that 

must be included in the template based on the results of such 

testing and publishes in a notice published in the Federal 

Register. That information may include, but is not limited to: 

(1) The primary occupations (by name and SOC code) that 

the GE program prepares students to enter, along with links to 

occupational profiles on O*NET (www.onetonline.org) or its 

successor site. 

(2) The GE program’s completion and withdrawal rates as 

calculated by the Secretary under §668.414. 

(3) The length of the program. 

(4) The total number of students enrolled during the most 

recently completed award year. 

(5) As calculated by the Secretary under §668.414, the 

loan repayment rate for any one or all of the following groups 

of students who entered repayment during the two-year period: 

(i) All students who attended the program. 

(ii) Students who completed the program. 

(iii) Students who withdrew from the program. 

Formatted: Highlight

Comment [A5]: So long as these are

reported and DOE‐approved SOC codes

related to the reported and DOE‐approved CIP

codes.

Formatted: Highlight

Formatted: Highlight

Comment [A6]: Highlighted disclosures

should be included by the secretary on the

template subject to student testing.

Formatted: Highlight

Formatted: Highlight
DRAFT FOR DISCUSSION PURPOSES – 11/08/2013

48

(6) The total cost of tuition and fees, and the total cost 

of books and supplies that a student would incur for completing 

the program within the length of the program. 

(7) The placement rate for the program, if the institution 

is required by its accrediting agency or State to calculate a 

placement rate. 

(8) As calculated by the institution, the median loan 

debt, including all of the loans described in §668.404(d)(1), 

incurred by any one or all of the following groups of students: 

(i) Students who completed the program during the most 

recently completed award year. 

(ii) Students who withdrew from the program during the 

most recently completed award year. 

(iii) All of the students described in paragraph (a)(8)(i) 

and (ii) of this section. 

(9) The median earnings of any one or all of the following 

groups of students: 

(i) Students who completed the program during the two-year 

period used by the Secretary to calculate the most recent D/E 

rates for the program under this subpart. 

(ii) Students who withdrew from the program during the 

two-year period used by the Secretary to calculate the most 

recent D/E rates for the program under this subpart. 

Formatted: Highlight

Formatted: Highlight

Formatted: Highlight

Comment [A7]: Wouldn’t the mean be

more useful and informative?

Formatted: Highlight

Formatted: Highlight
DRAFT FOR DISCUSSION PURPOSES – 11/08/2013

49

(iii) All of the students described in paragraph (a)(9)(i) 

and (ii) of this section. 

(10) A link to the U.S. Department of Education’s College 

Navigator Web site, or its successor site. 

(11) If applicable, with respect to the occupations for 

which the program prepares the student as disclosed by the 

institution under paragraph (a)(1) of this section, whether or 

not completion of the program satisfies the educational 

prerequisites for professional licensure in the State or States 

in which the program is offered. 

(12) If applicable, whether the program holds the 

programmatic accreditation necessary for an individual to obtain 

employment in the occupation for which the program prepares the 

student. 

(b) Disclosure updates. (1) In accordance with 

procedures and timelines established by the Secretary, the 

institution must update at least annually the information 

contained in the disclosure template with the most recent data 

available for each of its GE programs. 

(2) Within 30 days of receiving notice from the Secretary 

that the institution must provide student warnings for the 

program under §668.411(c), the institution must update the 

disclosure template to include those warnings for both enrolled 

and prospective students. 

Formatted: Highlight

Formatted: Highlight

Formatted: Highlight

Comment [A8]: If professional licensure is

required to find employment in the field for

which the program prepares students, then a

program that does not satisfy the educational

prereqs for such licensure cannot be eligible

as a gainful employment program and receive

title iv funds.  Therefore the disclosure would

not be moot.

Comment [A9]: If programmatic

accreditation is a prereq for employment, and

the program is not programmatically

accredited, then there is no reason for this

disclosure because such a program will be not

eligible as a gainful employment program and

receive title iv funds.   
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50

(c) Web link to disclosure information. (1) On any Web 

page containing general, academic, or admissions information 

about a GE program, the institution must provide a prominent, 

readily accessible, clear, conspicuous, and direct link to the 

disclosure template for that program. 

(2) An institution that offers a GE program in more than 

one location or format (e.g., full-time, part-time, accelerated, 

different lengths) may publish a separate disclosure template 

for each location or format if it would result in clearer 

disclosures under paragraph (a). An institution that chooses to 

publish separate disclosure templates for each location or 

format must ensure that each disclosure template clearly 

identifies the applicable location or format. 

(3) In addition to the other remedies available, Tthe 

Secretary may require the institution to modify its Web page if 

the link for the disclosure template is not prominentreadily 

accessible, clear, conspicuous, and direct. 

(d) Promotional materials. (1) All promotional materials 

that an institution makes available to prospective students that 

identify a GE program by name must include-- 

(i) The information on the disclosure template in a 

prominent manner; or 

(ii) Where space or airtime constraints would preclude a 

full disclosure of the required information, the Web address 

Comment [A10]: The link should be located  

immediately beneath the name of the

program and primary to any other description

of the program.

Comment [A11]: Each specific GE program,

e.g. nursing assistant‐20 month, nursing

assistant‐24 month, as well as each location

where the program is offered, should have its

own disclosure template.
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51

(URL) of, or the direct link to, the disclosure template, 

provided that, the institution identifies the URL or link as 

“Important Information about the educational debt, earnings, and 

graduation rates of students who attended this program.” 

(2) Promotional materials include, but are not limited to, 

an institution’s catalogs, invitations, flyers, billboards, and 

advertising on radio, television, the Internet, and social 

media. 

(3) The institution must ensure that all promotional 

materials, including printed materials, about a GE program are 

accurate and current at the time they are published, approved by 

a State agency, or broadcast. 

(e) Direct distribution to prospective students. An 

institution must provide, as a separate document that contains 

only the disclosure template for the specific, relevant GE 

program, a copy of the disclosure template to a prospective 

student, as defined by 34 CFR 668.41, before signing an 

enrollment agreement, at the time the student enrolls in a GE 

program. The institution must obtain written confirmation that 

the student received a copy of the disclosure template. The 

institution must ensure that the contents of the disclosure 

template are orally provided to prospective students as well.
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52

§668.414 Calculating, issuing, and challenging completion, 

withdrawal, and repayment rates and median earnings. 

(a) General. Under the procedures in this section, the 

Secretary determines the completion rates, withdrawal rates, 

repayment rates, and median earnings an institution must 

disclose under §668.413 for its GE programs, notifies the 

institution of that information, and provides the institution an 

opportunity to challenge the calculations. 

(b) Calculating completion, withdrawal, and repayment 

rates and median earnings. 

(1) Completion rate. The Secretary calculates the 

completion rate of a GE program as follows: 

Number of students in the enrollment cohort who completed the 

program within 100% of the length of the program 

Number of students in the enrollment cohort 

and 

Number of students in the enrollment cohort who completed the 

program within 150% of the length of the program 

Number of students in the enrollment cohort 
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53

The enrollment cohort is the number of students who began 

attending the program at any time during a particular award 

year. 

(2) Withdrawal rate. The Secretary calculates the 

withdrawal rate of a GE program as follows: 

Number of students in the enrollment cohort who withdrew from 

the program within the length of the program 

Number of students in the enrollment cohort 

The enrollment cohort is the number of students who began 

attending the program at any time during a particular award 

year. 

(3) Loan repayment rate. For the most recently completed 

award year, the Secretary calculates a loan repayment rate for 

borrowers not excluded under paragraph (b)(3)(vi) who attended a 

GE program as follows: 

Number paid in full plus number in active repayment 

Number entering repayment 

(i) Number entering repayment. The total number of 

borrowers who entered repayment during the two-year period on 

FFEL or Direct Loans received for attendance in the GE program. 
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54

(ii) Number paid in full. Of the number of borrowers 

entering repayment, the number who have fully repaid FFEL or 

Direct Loans received for attendance in the GE program. 

(iii) Number in active repayment. Of the number of 

borrowers entering repayment, the number who, during the most 

recently completed award year made loan payments sufficient to 

reduce by at least one dollar the outstanding principal balance 

of each of the borrower’s FFEL or Direct Loans, including 

consolidation loans that include a FFEL or Direct Loan received 

for attendance in the GE program, by comparing the outstanding 

principal balance at the beginning and end of the award year. 

The outstanding principal balance of a loan includes any unpaid 

accrued interest that has been capitalized. 

(iv) Loan defaults. A borrower who defaulted on a FFEL or 

Direct Loan is not included in the numerator of the loan 

repayment rate formula in this paragraph. 

(v) Repayment rates for borrowers who completed or 

withdrew. The Secretary may modify the formula in this 

paragraph to calculate repayment rates for only those borrowers 

who completed the program or only those borrowers who withdrew 

from the program. 

(vi) Exclusions. For the award year the Secretary 

calculates the loan repayment rate for a GE program, the 
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Secretary excludes a borrower from the repayment rate 

calculation if the Secretary determines that-- 

(A) One or more of the borrower’s loans were in a 

military-related deferment status for at least 60 consecutive 

days during the most recently completed award year; 

(B) One or more of the borrower’s FFEL loans or Direct 

Loans are either under consideration by the Secretary, or have 

been approved, for a discharge on the basis of the borrower’s 

total and permanent disability, under 34 CFR 682.402 and 

685.212; 

(C) The borrower was enrolled on at least a half-time 

basis for at least 60 consecutive days in an eligible 

institution during the most recently completed award year; or 

(D) The borrower died. 

(4) Median earnings. The Secretary calculates the median 

earnings of a GE program as described in paragraphs (b)(5)-

(b)(9). 

(5) Median earnings for students completing the GE 

program. The Secretary calculates the median earnings for the 

students who completed the GE program during the two-year period 

in accordance with §668.405. 

(6) Median earnings for students who withdrew from the GE 

program. (i) The Secretary calculates the median earnings for 
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the students who withdrew from the GE program during the twoyear period by-- 

(A) Creating a list of the students who were enrolled in 

the program but withdrew during the two-year period and 

providing it to the institution, as provided in paragraph 

(b)(6)(ii); 

(B) Allowing the institution to correct the information 

about the students on the list, as provided in paragraph 

(b)(6)(iii); 

(C) Obtaining from SSA the median annual earnings of the 

students on the list, as provided in paragraph (b)(6)(iv); and 

(D) Notifying the institution of the median annual 

earnings for the students on the list. 

(ii) Creating the list of students. (A) The Secretary 

selects the students to be included on the list by-- 

(1) Identifying the students who were enrolled in the 

program but withdrew during the two-year period from the data 

provided by the institution under §668.412; and 

(2) Removing any student who is excluded under paragraph 

(b)(8). 

(B) The Secretary provides the list to the institution. 

(iii) Institutional corrections to the list. (A) The 

Secretary presumes that the list of students and the identity 

information for those students are correct unless the 
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57

institution provides evidence to the contrary that is 

satisfactory to the Secretary, in a format and process 

determined by the Secretary. The institution bears the burden 

of proof that the list is incorrect. 

(B) No later than 30 days after the date the Secretary 

provides the list to the institution, the institution may-- 

(1) Provide evidence showing that a student should be 

included on or removed from the list pursuant to paragraph 

(b)(8); or 

(2) Correct or update a student’s identity information and 

the student’s program attendance information provided for a 

student on the list. 

(C) After the 30-day period expires, the institution may 

no longer seek to correct the list of students or revise the 

identity or program information of those students. 

(D) The Secretary considers the evidence provided by the 

institution and either accepts the correction or notifies the 

institution of the reasons for not accepting the correction. If 

the Secretary accepts the correction, the Secretary uses the 

corrected information to create the final list. 

(iv) Obtaining earnings data. The Secretary submits the 

final list to SSA. For purposes of this section SSA returns to 

the Secretary-- 
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(1) The median earnings of the students on the list whom 

SSA has matched to SSA earnings data, in aggregate and not in 

individual form; and 

(2) The number, but not the identities, of students on the 

list that SSA could not match. 

(7) Median earnings for students who completed and 

withdrew from the GE program. (i) The Secretary calculates the 

median earnings for both the students who completed the GE 

program during the two-year period and students who withdrew 

from the GE program during the two-year period by- 

(A) Creating a list of both the students who completed the 

GE program during the two-year period and students who withdrew 

from the GE program during the two-year period and providing it 

to the institution, as provided in paragraph (b)(7)(ii); 

(B) Allowing the institution to correct the information 

about the students on the list, as provided in paragraph 

(b)(7)(iii); 

(C) Obtaining from SSA the mean and median annual earnings 

of the students on the list, as provided in paragraph 

(b)(7)(iv); and 

(D) Notifying the institution of the mean and median 

annual earnings for the students on the list. 

(ii) Creating the list of students. (A) The Secretary 

selects the students to be included on the list by-- 
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(1) Identifying the students who were enrolled in the 

program and completed or withdrew during the two-year period 

from the data provided by the institution under §668.412; and 

(2) Removing any student who is excluded under paragraph 

(b)(8). 

(B) The Secretary provides the list to the institution. 

(iii) Institutional corrections to the list. (A) The 

Secretary presumes that the list of students and the identity 

information for those students are correct unless the 

institution provides evidence to the contrary that is 

satisfactory to the Secretary. The institution bears the burden 

of proof that the list is incorrect. 

(B) No later than 30 days after the date the Secretary 

provides the list to the institution, the institution may-- 

(1) Provide evidence showing that a student should be 

included on or removed from the list pursuant to paragraph 

(b)(8); or 

(2) Correct or update a student’s identity information and 

the student’s program attendance information provided for a 

student on the list. 

(C) After the 30-day period expires, the institution may 

no longer seek to correct the list of students or revise the 

identity or program information of those students. 
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60

(D) The Secretary considers the evidence provided by the 

institution and either accepts the correction or notifies the 

institution of the reasons for not accepting the correction. If 

the Secretary accepts the correction, the Secretary uses the 

corrected information to create the final list. 

(iv) Obtaining earnings data. The Secretary submits the 

final list to SSA. For purposes of this section SSA returns to 

the Secretary-- 

(1) The mean and median earnings of the students on the 

list whom SSA has matched to SSA earnings data, in aggregate and 

not in individual form; and 

(2) The number, but not the identities, of students on the 

list that SSA could not match. 

(8) Exclusions from median earnings calculations. The 

Secretary excludes a student from the calculation of the median 

earnings of a GE program if the Secretary determines that-- 

(i) One or more of the student’s FFEL or Direct Loans were 

in a military-related deferment status for at least 60 

consecutive days during the calendar year for which the 

Secretary obtains earnings information under this section; 

(ii) One or more of the student’s FFEL or Direct Loans are 

under consideration by the Secretary, or have been approved, for 

a discharge on the basis of the student’s total and permanent 

disability, under 34 CFR 682.402 and 685.212; 
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(iii) The student was enrolled on at least a half-time 

basis for at least 60 consecutive days in an eligible 

institution during the calendar year for which the Secretary 

obtains earnings information under this section; 

 (v) The student died. 

(9) Median earnings not calculated. The Secretary does 

not calculate the mean or median earnings for a GE program if 

SSA does not provide the mean and median earnings for the 

program. 

 (c) Notification to institution. The Secretary notifies 

the institution of the-- 

(1) Draft completion, withdrawal, and repayment rates 

calculated under paragraph (b)(1)-(b)(3) of this section and the 

information the Secretary used to calculate those rates. 

(2) Median earnings of the students who completed the 

program, as described in paragraph (b)(5) of this section, the 

students who withdrew from the program, as described in 

paragraph (b)(6) of this section, or both the students who 

completed the GE program during the two-year period and students 

who withdrew from the GE program during the two-year period, as 

described in paragraph (b)(7) of this section. 

(d) Challenges to rates and earnings. (1) Completion, 

withdrawal, and repayment rates. 
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(i) No later than 45 days after the Secretary notifies an 

institution of the draft completion, withdrawal, and repayment 

rates, the institution may challenge the accuracy of the 

information that the Secretary used to calculate the draft rates 

by submitting, in a form prescribed by the Secretary, evidence 

satisfactory to the Secretary demonstrating that the information 

was inaccurate. 

(ii) The Secretary considers any evidence provided by the 

institution challenging the accuracy of the information the 

Secretary used to calculate the rates and notifies the 

institution whether the challenge is accepted or the reasons the 

challenge is not accepted. If the Secretary accepts the 

challenge, the Secretary uses the corrected data to calculate 

the rates. 

(iii) An institution may challenge the Secretary’s 

calculation of the completion, withdrawal, and repayment rates 

only once for an award year. An institution that does not 

timely challenge the rates waives any objection to the rates as 

stated in the notice. 

(2) Median earnings. The Secretary does not consider any 

challenges to the median earnings calculated under this section. 

(e) Final rates and earnings. (1) Completion, 

withdrawal, and repayment rates. 
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(i) After expiration of the 45-day period, and subject to 

resolution of any challenge under paragraph (d)(1) of this 

section, a GE program’s draft completion, withdrawal, and 

repayments rates constitute the final rates for that program. 

(ii) The Secretary informs the institution of the final 

completion, withdrawal, and repayment rates for each of its GE 

programs by issuing a notice of determination. 

 (iii) After the Secretary provides the notice of 

determination, the Secretary may publish the final completion, 

withdrawal, and repayment rates. 

(2) Median earnings. The median earnings of the GE 

program calculated by the Secretary under this section 

constitute the final median earnings for that program. After 

the Secretary provides the institution with the notice in 

paragraph (c) of this section, the Secretary may publish the 

final median earnings for the GE program. 

(f) Conditions for challenges. An institution must ensure 

that any material that it submits to make any corrections or 

challenge provided in this section is complete, timely, 

accurate, and in a format acceptable to the Secretary as 

described in this subpart and, with respect to challenges under 

paragraph (d)(1) of this section, consistent with any 

instructions provided to the institution with the notice of its 

draft completion, withdrawal, and repayment rates. 
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§668.415 Application requirement for new GE programs. 

(a) An institution must apply to the Secretary to establish 

a new GE program if-- 

(1) The program has the same CIP code as, or is 

substantially similar to, a program that-- 

(i) Became ineligible under this subpart; or 

(ii) Was a failing or zone program that the institution 

voluntarily discontinued or is replacing a currently failing or 

zone program; 

(2) The institution does not currently offer an eligible 

program within the same CIP family; or 

(3) The institution currently has, or had within the 

previous three years, a failing program under its GE measures 

within the same CIP family. 

(b) For a new program requiring the approval of the 

Secretary under paragraph (a), an institution must submit a 

materially complete application to the Secretary in a format 

prescribed by the Secretary signed by the institution’s most 

senior executive officer. The application must include the 

following information: 

(1) The CIP code, credential level, and length of program 

of the program, and a description of how the institution 

determined the CIP code. 

Comment [A12]: Margaret Reiter will be

providing suggested language for this section.
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(2) The primary occupations, by name and SOC code, that 

the program will prepare students to enter. 

(3) The total cost of tuition and fees, and the total cost 

of books and supplies that a student would incur for completing 

the program. 

(4) The date of the expected first day of instruction of 

the program as a title IV eligible program. 

(5) The projected total enrollment for each of the first 

three years that the institution will offer the program. 

(6) The projected entry-level earnings of program 

completers as reported to the institution by likely employers. 

 (7) A narrative description of how the program was 

reviewed by, approved by, or developed in conjunction with an 

advisory committee, a government agency, businesses, or 

organizations that will likely employ completers of the program. 

(8) Letters of recommendation for the program from at 

least three businesses or organizations that are likely to 

employ completers of the program signed by an executive officer 

of each business. 

(9) Documentation that the program has been approved by 

the institution’s accrediting agency or is otherwise included in 

the institution’s accreditation by its accrediting agency, or 

comparable documentation if the institution is a public 

postsecondary vocational institution approved by a recognized 
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State agency for the approval of public postsecondary vocational 

education in lieu of accreditation. 

(10) For each occupation that the program will prepare 

students to enter, whether the program meets applicable State 

requirements, specialized or programmatic accreditation 

requirements, and other requirements that completers of the 

program would have to satisfy to-- 

(i) Meet State licensure or certification requirements, if 

any, in the State in which the program is offered; 

(ii) Meet the conditions or prerequisites for obtaining a 

certification required or preferred by employers in the State in 

which the program is offered; and 

(iii) Otherwise obtain employment in the State in which 

the program is offered. 

(11) If the program is intended to replace a program that 

is currently offered or was offered within the previous three 

years, a description of the changes the institution made to 

improve the program’s performance under the requirements of this 

subpart. 

(c) The Secretary approves the GE program if-- 

(1) The institution provides all the information required 

by paragraph (b); 
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(2) There are no material or unresolved issues relating to 

the institution’s administration of or participation in the 

title IV, HEA programs; and 

(3) The institution has complied with the reporting and 

disclosure requirements in §§668.412 and 668.413, respectively 

for all of its GE programs. 

(d) The Secretary notifies the institution if its 

application for the GE program is approved or denied. If the 

application is denied, the Secretary informs the institution of 

the reasons for the denial, and the institution may petition the 

Secretary to reconsider that denial. 

(e) An institution may begin disbursing title IV, HEA 

program funds to students enrolled in a new GE program subject 

to this section on the date the Secretary approves the program 

under paragraph (d). 
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§668.416 Certifications for GE programs. 

(a) Program participation agreement certification. An 

institution must provide in its Program Participation Agreement 

under 34 CFR 668.14 a certification that for each of its 

existing GE programs-– 

(1) The program has been approved by the institution’s 

accrediting agency, received programmatic accreditation if 

required, or is otherwise included in the institution’s 

accreditation by its accrediting agency, or comparable 

documentation if the institution is a public postsecondary 

vocational institution approved by a recognized State agency for 

the approval of public postsecondary vocational education in 

lieu of accreditation; and 

(2) The successful completion of the GE program will meet 

the requirements generally needed to secure employment in the 

recognized occupation for which the program prepares students, 

including the ability to apply to take or to take any 

examination required to receive a local, State, or Federal 

license, or a nongovernmental certification, required as a 

precondition for employment, or to perform certain specialized 

functions included in the program’s training in the States in 

which the educational program is offered, or to meet additional 

conditions that the institution knows, or reasonably should 
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know, must generally be met to secure employment in a recognized 

occupation for which the program prepares students. 

(b) Transitional certification. On or before September 1, 

2015, an institution must provide to the Department a 

certification signed by its most senior executive officer that 

all of its GE programs receiving title IV, HEA funds at that 

time meet the requirements of paragraph (a) of this section 

unless that certification is already included in the Program 

Participation Agreement for the institution. 
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Conforming Changes to Existing Regulations 

(new language underlined) 

§600.2 Definitions. 

 The following definitions apply to terms in this part: 

* * * 

Recognized occupation: An occupation that is-- 

(a) Identified by a Standard Occupational Classification 

(SOC) code established by the Office of Management and Budget 

(OMB) or an Occupational Information Network O*Net-SOC code 

established by the Department of Labor and which are available 

at http://online.onecenter.org or its successor site; or 

(b) Determined by the Secretary in consultation with the 

Secretary of Labor to be a recognized occupation. 

§600.10 Date, extent, duration, and consequence of eligibility. 

* * * 

(c) Educational programs. (1) An eligible institution 

that seeks to establish the eligibility of an educational 

program must-- 

(i) For a gainful employment program under 34 CFR 668, 

subpart Q, obtain the Secretary’s approval as may be required 

under 34 CFR 668.415; and 
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(ii) For a direct assessment program under 34 CFR 668.10, 

a comprehensive transition and postsecondary program under 34 

CFR 668.232, or pursuant to a requirement regarding additional 

programs included in the institution’s Program Participation 

Agreement under 34 CFR 668.14, obtain the Secretary’s approval. 

(2) An eligible institution does not have to obtain the 

Secretary’s approval to establish the eligibility of any program 

that is not described in paragraph (c)(1)(i) or (ii) of this 

section. 

(3) An institution must repay to the Secretary all HEA 

program funds received by the institution for an educational 

program, and all the title IV, HEA program funds received by or 

on behalf of students who enrolled in that program if the 

institution-- 

(i) Fails to obtain the Secretary’s approval for an 

educational program identified in paragraph (c)(1) of this 

section; or 

(ii) Incorrectly determines that an educational program 

that is not subject to approval under paragraph (c)(1) or (2) of 

this section is an eligible program for title IV, HEA program 

purposes. 

* * * 
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§600.20 Notice and application procedures for establishing, 

reestablishing, maintaining, or expanding program eligibility or 

institutional eligibility and certification. 

* * * 

(c) The application and certification requirements for programs 

that are required to prepare students for gainful employment in 

a recognized occupation are in 34 CFR §§668.415 and 668.416. 

* * * 

§600.21 Updating application information.

(a) Reporting requirements. Except as provided in 

paragraph (b) of this section, an eligible institution must 

report to the Secretary, in a manner prescribed by the Secretary 

no later than 10 days after the change occurs, any change in the 

following: 

* * *

(11) For any gainful employment program under 34 CFR part 

668, subpart Q, for which the institution-- 

(i) Discontinues the program’s eligibility under 34 CFR 

668.411; 

(ii) Ceases to provide the program for a reason other than 

a normal vacation period or natural disaster; 

(iii) Loses program eligibility under §600.40; or 
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(iv) Changes the program’s name, and as defined in 34 CFR 

668.402, CIP code, or credential level. 

* * *

§ 685.206 Borrower responsibilities and defenses. 

(a) The borrower’s duty to provide information. The 

borrower shall give the school the following information as part 

of the origination process for a Direct Subsidized, Direct 

Unsubsidized, or Direct PLUS Loan: 

(1) A statement, as described in 34 CFR part 668, that the 

loan will be used for the cost of the student's attendance. 

(2) Information demonstrating that the borrower is eligible 

for the loan. 

(3) Information concerning the outstanding FFEL Program and 

Direct Loan Program loans of the borrower and, for a parent 

borrower, of the student, including any Federal Consolidation 

Loan or Direct Consolidation Loan. 

(4) A statement authorizing the school to release to the 

Secretary information relevant to the student's eligibility to 

borrow or to have a parent borrow on the student's behalf (e.g., 

the student's enrollment status, financial assistance, and 

employment records). 

(b) Changes in borrower information. (1) The borrower shall 

promptly notify the Secretary of any change of name, address, 
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student status to less than half-time, employer, or employer's 

address; and 

(2) The borrower shall promptly notify the school of any 

change in address during enrollment. 

(c) Borrower defenses. (1) In any proceeding to collect on 

a Direct Loan, the borrower may assert as a defense against 

repayment any act or omission of the school attended by the 

student that would give rise to a cause of action against the 

school under applicable State law except as provided in 

paragraph (c)(2) of this section. These proceedings include, 

but are not limited to, the following: 

(i) Tax refund offset proceedings under 34 CFR 30.33. 

(ii) Wage garnishment proceedings under section 488A of the 

Act. 

(iii) Salary offset proceedings for Federal employees under 

34 CFR part 31. 

(iv) Credit bureau reporting proceedings under 31 U.S.C. 

3711(f). 

(2) A borrower may not assert as a defense to repayment of 

a Direct Loan a cause of action for which an element is that the 

school, a location of the school, or a program offered by the 

school did not or does not meet one or more requirements for the 

school, location, or program, as applicable, to be eligible to 

participate in a title IV, HEA program. Comment [A13]: Per discussion today, is

this going to be removed?
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(3) If the borrower's defense against repayment is 

successful, the Secretary notifies the borrower that the 

borrower is relieved of the obligation to repay all or part of 

the loan and associated costs and fees that the borrower would 

otherwise be obligated to pay. The Secretary affords the 

borrower such further relief as the Secretary determines is 

appropriate under the circumstances. Further relief may 

include, but is not limited to, the following: 

(i) Reimbursing the borrower for amounts paid toward the 

loan voluntarily or through enforced collection. 

(ii) Determining that the borrower is not in default on the 

loan and is eligible to receive assistance under title IV of the 

Act. 

(iii) Updating reports to credit bureaus to which the 

Secretary previously made adverse credit reports with regard to 

the borrower's Direct Loan. 

(4) The Secretary may initiate an appropriate proceeding to 

require the school whose act or omission resulted in the 

borrower's successful defense against repayment of a Direct Loan 

to pay to the Secretary the amount of the loan to which the 

defense applies. However, the Secretary does not initiate such 

a proceeding after the period for the retention of records 

described in §685.309(c) unless the school received actual 

notice of the claim during that period.