1

United States Department of Education

Gainful Employment Negotiated 

Rulemaking Committee 2017-2018

Session 2, Day 3

Wednesday, December 6, 2017

The Negotiated Rulemaking Committee met in Union Center Plaza Learning Center, First Street, N.E., Washington, D.C., at 9:00 a.m., Ramona Buck, Rozmyn Miller, and Javier Ramirez, Facilitators, presiding. 

Members Present:

Ramona Buck, Federal Mediation and Conciliation Service, Facilitator

Rozmyn Miller, Federal Mediation and Conciliation Service, Facilitator

Javier Ramirez, Federal Mediation and Conciliation Service, Facilitator

Jeff Arthur, Vice President of Regulatory Affairs and CIO, ECPI University

Whitney Barkley-Denney, Senior Policy Counsel, Center for Responsible Lending

Jessica Barry, President, School of Advertising Art

Jennifer Blum, Senior Vice President, External Relations and Public Policy, Laureate Education

Stephen Chema, Ritzert & Layton, PC

Jennifer Diamond, Policy Associate, Maryland Consumer Rights Center

Daniel Elkins, Legislative Director, Enlisted Association of the National Guard of the United States

Ryan Fisher, Intergovernmental Relations Division, State of Texas Office of the Attorney General

Pamela Fowler, Executive Director of Financial Aid, University of Michigan-Ann Arbor

Christopher Gannon, Vice President, United States Student Association

Andrew Hammontree, Director of Financial Aid and Scholarships, Francis Tuttle Technology Center

Neal Heller, President and CEO, Hollywood Institute of Beauty Careers

Marc Jerome, President, Monroe College

C. Todd Jones, President, Association of Independent Colleges and Universities in Ohio

Roberts Jones, President, Education and Workforce Policy

John Kamin, Assistant Director, The American Legion’s National Veterans Employment and Education Division

Kirsten Keefe, Senior Attorney, Consumer Finance and Housing Unit, Empire Justice Center

C.J. Libassi, Center for American Progress

Christopher Madaio, Assistant Attorney General, Office of the Attorney General of Maryland

Jordan Matsudaira, Senior Fellow, Urban Institute

Mark McKenzie, Center for American Progress

Laura Metune, Vice Chancellor of External Relations, California Community Colleges

Anthony Mirando, Executive Director, National Accrediting Commission of Career Arts and Sciences

Matthew Moore, Director of Financial Aid and Scholarships, Sinclair Community College

Kelly Morrissey, Director of Financial Aid, Mount Wachusett Community College

Chad Muntz, Director of Institutional Research, Office of Administration and Finance, The University System of Maryland

John Pierre, Center for American Progress

Tim Powers, Director of Student Aid Policy, National Association of Independent Colleges and Universities

Sandy Sarge, SARGE Advisors

Ahmad Shawwal, Student, University of Virginia

David Silverman, CFO and Director of Business Affairs, The American Musical and Dramatic Academy

Christina Whitfield, Associate Vice President, State Higher Education Executive Officers Association

Staff Present:

Amanda Andrade, Office of the General Counsel

Steve Finley, Office of the General Counsel

Cynthia Hamad

Gregory Martin, Office of Postsecondary Education

Kathleen Smith, Acting Assistant Secretary for Postsecondary Education

Contents

6Proceedings

# Proceedings

 SEQ CHAPTER \h \r 1Mr. Martinez:  All right, good morning, everyone.  So, thanks again for the great dialog yesterday and just a quick notification that like any long drive, every now and then you switch drivers, so Ramona's going to be driving today. 

I tend to get caught up in the scenery.  She keeps her foot on the pedal, so hold on, okay?

(Laughter.) 

But I would remind you, be hard on the issues, not on the people.  I think you did a great job of that yesterday, and hopefully, we can continue that same type of spirit today. 

Are there any statements from any of the negotiating team members, before we get started?  Yes, Sandy?

Ms. Sarge:  Thank you, two things. One, I received a public message from one of my colleagues out in the field, an email, and at some point, when we do public, I'd like to read some of his concerns, only because he said could you please get this in the record? 

So, that, but also, I was going through my notes last night, and Whitney, I was confused. 

You were mentioning something called the Baum Report, and I didn't know what that was, I apologize. 

I didn't know if it was an acronym or a name or what, and then I said, okay, I've looked silly enough today already.  So, could you help me with that? 

Mr. Martinez:  And Whitney, before you do that, I'll remind everyone to state your name for the record. 

I called you but still, for the audio piece, I think it would really be helpful for them if you stated your name beforehand. 

So, Whitney?

Ms. Barkley-Denney:  Sure, this is Whitney Barkley-Denney. 

So, when we did the negotiation last time around, there was a College Board paper that was used in a lot of the thinking about the calculations, by a woman named Sandy Baum. 

So, it's B-A-U-M, it's a last name. And it talked about -- the beginning of the paper is sort of a review of other papers on what college affordability looks like, and then the end of the paper has some of her suggestions and the team that was writing it. 

So, at that time, she was writing for the College Board; I'm not sure where she is now. 

Mr. Martinez:  Okay, any other comments from any of the team members? 

Okay, Sandy, why don't you kick us off with public comment, and then we'll see if there's anyone else that has public comment? 

And I'm going to ask that there be a hard ten-minute time block on any public comment in total. 

Ms. Sarge:  I moved Mike so that it's officially a public thing and not a negotiated seat. 

Okay, I'm reading for Dr. Steven Ruben; he is the owner and President of Colorado Academy of Veterinary Technology, CAVT.edu. 

For CAVT, our specific situation, veterinary technician programs are a capital-intensive program. 

The American Veterinary Medical Association provides programmatic accreditation for all Federally-accredited vet tech schools or programs. 

We have no choice but to spend approximately $500,000 on equipment and inventory to provide a proper education for our students. This is the basis of our tuition. 

I termed this rational tuition. Programs that provide annual tuition under $10,000, similar programs, are receiving state funding supplements. 

Most vet tech students are women.  Many women choose to have children after school and are already mothers or are already mothers and take on the roles of home-care caretakers in addition to working outside of the home. 

Many of these students take on part-time work out of choice.  This is out of the control of the vet tech program.

Many vet clinics pay hourly and seek to limit the time the technicians work so as to avoid overtime charges.  This is out of the control of the vet tech programs. 

CAVT has met all compliance requirements for the last three years; no findings on FSA audits. 

How is it that we could be at risk of defunding?  Our default rate is six percent. 

How does DE ratio additionally add to the efficacy of the program from the student's perspective? 

On average, repayment of our students is $300 a month.  Then, the first-year salary of a vet tech would have to be about $45,000 to meet the 8 percent requirement, DE requirement. 

This is out of step with reality in the vet industry.  $45,000 a year salary approximates somebody in practice between four and seven years.  

This is yet another instance of the rule laying ways to good programs. 

I'm only going to read his stuff from him, not his general comments. 

If the intention of the rule is to move associate degree programs to community college colleges, it will fail in the case of vet techs.  The learning curve and capital requirements are too high. 

The veterinary community requires accredited veterinary technician programs to provide trained veterinary nurses to veterinary communities in order to serve the public health system, including family pets. 

Should private programs go away, this mission, as defined by the AVMA, will have been thwarted. 

And I'll make a separate comment in addition to this. 

In Colorado, many vet techs work on ranches in their first three to five years or one to five years of their employment, which often times, is a small stipend in living with room and board instead of a salary so that they can get the experience with large animals. 

So, I have copies of this which I can pass out or leave up here for everybody that also goes into his more general comments about GE. 

But I thought his, specific to his situation, was important. 

Mr. Martinez:  If you could give a copy to Scott for the record, and then the rest can go on the back table where the other papers are.  Thank you. 

Any other public comment?  Okay, I don't see anyone jumping up to run to the mic, so we're going to have to make a little bit of an adjustment on the timing. 

Because if you remember, yesterday, we were talking about trying to allocate our time block, about 20 minutes per question. 

We ran pretty far over that yesterday, so if we want to get through answering the questions on each of these issues, we're really going to have to make sure that our comments are targeted. 

Hopefully, today we could get through Issues 4, 5, and 6, which are the sanctions, appeals, and disclosures. 

And there is a little bit of overlap between the sanctions and disclosures, so if we cover that in our discussion in 4, when we get to Issue 6, then just say we've covered that already. 

And that way, we don't have to rehash those comments. 

So, for the sanctions, what we're asking you to do is we're asking you to state your position before any comment, right? 

We want to make sure your position on sanctions is clear before you get into any supporting comments for that. 

And what we're asking for is your view on the issue of sanctions, not your view on somebody else's view of sanctions, right? 

So, don't take the bait, I guess is probably the clearest way to say it, right? You’re going to hear comments that may be contrary to your view; so be it.  That's their view.  We're looking for your view on the position of sanctions. 

Clear? 

So, before we get started on that, Greg needs to make a quick clarification on Issue Number 3, and then we'll start rolling into Issue 4. 

Greg?

Mr. Martin:  This is Greg.  Thanks, Javier. 

If you would all turn to Issue Paper 3, Page 3, we discussed yesterday on amortization period, what the Department used to come up with the amortization dates, amortization period rather. 

And at the bottom, you'll note that the Department took this approach based on data from 2002.  There was some confusion about that yesterday, and I think part of that relates to the fact that it just said 2002. 

That should accurately say that we looked at barbers who went into repayment between 1993 and 2002.  

So, please make that correction.  I think that it will make a little more sense to you if you do it that way, that's all. 

Ms. Buck:  Thank you, Greg.  Do you want to now lead us into the discussion of Issue Paper 4?

Mr. Martin:  Sure.  This is Greg again.  All right, let's take a look at Issue Paper 4 here.  We're going to be discussing sanctions.  

Under the current GE regulations program with DE rates failing or in the zone, are potentially in subject of sanctions. 

If the program has a failing DE rate for two out of any three consecutive years for which rates are calculated, or as a combination of zone and failing rates for four consecutive years for which rates are calculated, the program loses eligibility for Title 4 HEA program funds for a period of three years. 

For three years, the institutions may not seek to establish eligibility of a program that is substantially similar to one that is ineligible based on the DE rates or that is substantially similar to a program that was voluntarily discontinued after receiving DE rates that are failing or in the zone. 

A program that could lose eligibility based on next year's DE rates is also required to provide warnings to current and prospective students. 

Any program that received failing final DE rates in 2017 is currently required to provide that warning because they could lose eligibility in the subsequent year. 

GE programs that have only one year of calculated DE rates at this point and programs for which there is a pending alternate earnings appeal are not subject to sanctions during the pendency of the appeal. 

Even though no GE program has lost eligibility under these sanctions at this point, it has been reported that some institutions have used GE program information to adjust their program offerings, possibly to avoid sanctions. We are considering whether the required GE disclosures are sufficient to inform enrolled and prospective students about the outcomes for program graduates, and whether to revise or remove the provisions that tie eligibility to performance under the DE rate's measure. 

This discussion will also consider whether GE regulations should still require an institution to provide warnings based on DE rates. 

Let's take a look at our three questions. 

Should the Department retain or amend the regulations, providing for a loss of eligibility for a low-performing program? 

Are program disclosures alone effective in helping enrolled and prospective students identify lower-performing programs with respect to job earnings? 

And finally, should institutions be required to provide warnings to students about lower-performing programs? 

How should the warnings be changed if the loss-of-eligibility provision is revised or removed? 

Ms. Buck:  So, thank you, Greg. 

And let's look, then, at the first question, and again, as Javier said, if you could start by indicating your position on the question, that would be helpful. 

So, who would like to speak?  It looks like Pamela? 

Ms. Fowler:  Good morning.  Should the Department retain or amend the regulations?  Yes, this is my position. 

I'm open to amending them but there definitely should be something. 

Ms. Buck:  Thank you.  Daniel?

Mr. Elkins:  Yes, we think that amending the regulations is something that would be important to protect veterans at students in the proprietary section that are being serviced well. 

However, it would be interesting to hear from the AGs on their specific perspective as to how we could do that and make it equitable. 

Ms. Buck:  So, I think Marc is next?

Mr. Jerome:  So, and I assume we'll get into this as the day goes on, if the metric accurately identified poorly-performing programs, I would be more comfortable with the penalty section of it. 

But since I do not believe the data is showing that the metric is actually identifying poorly-performing programs, at this point, I'm asking formally the Department not to have the harsh penalties that it has. 

The second point, which I brought up at the last negotiation, which I still think is relevant, is that the loss of Title 4 eligibility I do not believe is the most effective at actually aiding students. 

And I proposed, which I will propose again, a separate proposal of penalties that ends up lowering debt for students to bring the program into, I guess, a passing category. 

Ms. Buck:  Thank you.  Johnson?

Mr. Tyler:  Hi, this is Johnson Tyler from Legal Services in Brooklyn. 

I support the existing Gainful Employment regulations, as the sanctions right now. 

Our experience is that, for low-income students, they continue to go to schools where the default rate is no longer a useful tool to measure a school that's actually not providing value. 

And consequently, when you looked at the 2017 data that came out, many of the programs that my clients went to, stuff like becoming a Court stenographer, becoming a videographer, programs were failing in the schools that were providing those services. 

So, I think it would be useful to keep that metric. 

Ms. Buck:  Thank you.  I think Thelma is next?

Ms. Ross:  Thelma. 

For minority-serving institutions, we would ask that we retain, that the Department retain, the loss-of-eligibility provisions for low-performing institutions as well. 

Ms. Buck:  Thank you.  Laura?

Ms. Metune:  Laura Metune with the Community Colleges of California.  We support the sanctions. 

You heard yesterday from some of my colleagues who spoke about the burden of the reporting and I just wanted to note that you have to balance the burden of the reporting with public interest and the student benefit associated with ensuring that they aren't taken advantage of by poor-performing institutions. 

If there's any discussion, I think the discussion should be about how we might make the reporting requirements easier, but I do support the sanctions and I think those are very important for the public interest. 

Thank you.  

Ms. Buck:  Thank you.  Whitney?

Ms. Barkley-Denney:  Hi, good morning, everyone.  This is Whitney. 

I'm going to be sending two pieces of research over to Scott so everybody can see them, but I wanted to talk about them a little bit because they go directly to the efficacy of disclosures. 

One is from the Yale Law Journal, which I think we can all agree is probably a pretty reliable source. 

And they did a study where they tracked the eye movements of people who were given disclosures on the TILA forms. 

And as most of you remember, in the mortgage crisis, there were a lot of people who had initial rates, whether of interest or of a payment, and then those rates adjusted upward. So, they told the participants, these are your interest rates and these are your payments. 

Not a lie, it was the initial interest rate payment, and they tracked their eyes to see if they ever looked on Page 2 to see that the rate would be adjusting up. 

Even when they turned to Page 2, the people didn't notice that the rate would be adjusting up, to the tune of almost $1500 for the monthly payment. 

And so what they did then is they sit all of these people down and they say, okay, what was the initial interest rate?  96 percent of the participants got it right. 

Then they said what was the initial monthly payment?  54 percent got it right.  Then they asked did you notice that the interest rate went up?  38 percent did. 

And did you notice that the monthly payment went up?  Only 25 percent of participants in that study noticed that their monthly payment was going to go up. 

That's why disclosures are just not enough, particularly when the consumer is in a disadvantaged position. 

And please understand, I'm not saying that anybody's trying to take advantage of someone, but when you're a consumer in any situation, you are in a disadvantaged position relative to the person who is selling you the product. 

They naturally know more, and so we would very much support keeping the sanctions piece of this, and as well as the disclosures, but the sanctions pieces are really, really important when it comes to protecting consumers. 

Ms. Buck:  Thank you.  Chris? 

Mr. Madaio:  Good morning, Chris Madaio.  So, I am certainly in favor of retaining the current sanctions program as exists. 

And I always want to go back to the Higher Education Act. 

I think it requires that in order for programs to participate in Title 4, they have to prepare students and train them for gainful employment in a recognized occupation. 

And if a school is not doing that, then it wouldn't make sure for that school to continue obtaining Federal taxpayer money. 

I just look at the traditional opinions where the Court reviewed this case in the second rulemaking, the Court said that the financial aid issue is alone. 

It's not a scholarship, a grant, or an award, and it would be strange for Congress to loan out money to train students for jobs that were insufficiently remunerative to permit the students to repay their loans. 

The Court goes on, it would be a perverse system that by design, wasted taxpayer money, in order to impose crippling, credit-destroying debt on lower-income students and graduates. 

Had Congress been uninterested in whether the loan-funded training would result in a job that paid enough to satisfy loan debt, it would have created a Federal grant system instead of a Federal loan system, focusing on preparation for gainful employment. 

So, speaking from a taxpayer perspective, which is obviously something I'm interested in, and I think we all are generally, beyond our constituents, and I know that's something the Department is in, it just wouldn't make sense to not have any sanction, or not have a sanction, especially a sanction that would -- not have a sanction that does not stop continued taxpayer money going to programs that have proven not to provide gainful employment. 

As well as, and this was a question too and we'll kind of get to it, but a disclosure system alone would simply not be appropriate. 

We had disclosures alone starting with the initiation of the first rule in 2010.Obviously, accountability was not in place then because it was struck down by the court, but the disclosures were still in place. 

Students were still going to ITT Tech, students were still going to Corinthian, students were still going to schools that were not providing gainful employment and were providing students with a lot of debt that they were unable to repay. 

Ms. Buck:  Thank you.  So, we have Jessica, Sandy, and then Daniel.

Mr. Martinez:  Let me just jump in really quick.  I would just remind folks to careful with names, hard on the issues, not on the people, right? 

We could still make the points without having to use names if possible.  Okay, thank you.

Ms. Buck:  Good point, let's go to Jessica.

Ms. Barry:  Hi, Jessica Barry. 

So, I want to look back at the Higher Education Act, and it says that we are to prepare our students for gainful employment, not guarantee gainful employment, which is nearly impossible for all of us to do. 

I would support the Department amending the regulations providing loss of eligibility for lower-performing schools, and I think this comes back to what Marc said. 

We all know, I mean what we've talked about over the last two days is, that the DE metrics are imperfect. 

They're failing, and I think what I've learned as I've listened to all of you is that they really aren't fair to any of our types of institutions as a single indicator of success. So, should loss of eligibility be based on one single indicator that doesn't give the full spectrum of the quality of that education?  I think we need to look at that. 

The other thing, I think, that's really interesting about the Issue Paper that the Department brought up is that schools and programs had been adjusted once schools looked at how they performed on gainful employment metrics. If the sanctions are in place, could they be amended to give schools the opportunity to make adjustments to their programs? 

And in a small school, which I am representing that constituency, if we have an associate degree program that is a high-quality program, good completion rates, good job placement rates, low default rate, but we don't make the gainful employment metrics because the debt is too high. 

You know, could we take a look at that program? 

In my school, we would go back to the faculty, we'd go back to the employment community that hires the grads and say, hey, I know there's a demand for this program because the placement rates are high. 

What can we do to this program to help reduce the debt?  We might take an associate degree program to a certificate program and still have good outcomes and be able to lower that debt. 

So, I think the three-year provision that blocks schools from developing a program that's similar is definitely a problem. 

If you're lowering the credential and providing still a high-quality program with less debt, I think you should be able to do that. Thank you. 

Ms. Buck:  Thank you.  Sandy?

Ms. Sarge:  This is Sandy.  I have a couple of questions for I think Johnson, hi, and perhaps for Chris. 

You guys have mentioned students that have come to your services or come to the AGs and are saying that they aren't getting an education. So, from a math perspective, I tried to put numbers in context or comments in context. 

So, of the students that came to you to concern, what percentage were they of the total population of the school? 

And did you interview or talk with other students that didn't complain or didn't have a concern with the quality, and how did you weigh that? 

Thank you. 

Mr. Tyler:  I only see students when they're generally in default on their Federal loans.  That's when I see them. 

So, that's years after they've left, or at least a year and a half after they've left the school. 

Often, it's many years after they left the school because the default enforcement doesn't actually affect them for a while.  And that's how I learnt about the programs that are in. 

So, then I see where they are in their lives, if they're doing something like being a home attendant, which is not related to their training. 

And instead, they took out $20,000 to go to a school to become a Court stenographer and they were admitted to a program for that even though they didn't speak English. 

And it seems to us how did this possibly happen?  And so that's a real case, that's one of our cases right now. 

So, we don't compare them to how everyone else is doing in the school, we're just dealing. 

And there's a school very close to our Office that we have a steady stream of people coming into, and they've been sued by some very experienced litigators who didn't really get anywhere in the lawsuit. 

It's very time-consuming.  I can't tell you the name of the school apparently. 

But when you look at the metrics that came out in 2017, eight of their ten programs were either in the one-year category or in the three-year category. 

So, that school would have had to really change their game.  They would either have to reduce the tuition, increase the admissions criteria about people so they could succeed, or get better instructors. 

So, that sort of metric is really useful. 

Now, if you looked at their default rate, that school has a great default rate.  It's easy to have a good default rate.  All you do is get everyone into an income-base-for-payment plan and you're not in default. 

It's a meaningless metric.  And in fact, some schools actually have people who call up just like they do in law school actually to try to get you a job so it increases your US News and School Report Score of having employed graduates. 

They do the same thing to keep the default rate down.  They have people at school calling to make sure that their people who have left the school don't go into a default, that they get into an income base for payment. 

Income base for payment is great; you're not gaming the system, you're just rendering that metric completely irrelevant in terms of identifying schools that are having problems. 

Ms. Buck:  So, let me interrupt for a minute to say it's been about 20 minutes on this question, and Sandy, before we leave, you do want to state your position?

Ms. Sarge:  Yes, thank you for that opportunity, this is Sandy.  My position is there's too many influencing factors in how the calculations are done, and therefore, I think that the metrics in themselves are misleading. Things like if a student doesn't work for a full year, the SSN data or SSA data doesn't tell you that they only worked part time. 

So, their salaries are misleading, and so you screw up the calculations from that perspective. 

So, unless we come up with something here where the metrics are reliable and fair, as I think, Tony, I liked the way you put it yesterday. 

So, thank you, I'll piggyback on what Tony said.  

But until we get to that point where it's really serving students with accurate information, I would say that the sanctions are way too penalizing.  I don't know the word, punitive, excuse me. 

So, I would be against that unless we come up with better metrics.

Ms. Buck:  Okay, thank you.  Daniel?

Mr. Martinez:  No, you're in the queue, Daniel.

Mr. Elkins:  This question is directed at Ms. Ross.  I was wondering if you could clarify what you said earlier?  I just think it would be helpful. 

What I heard you say was that you support sanctions and GE rates at minority-serving institutions. 

Could you just clarify for everyone if that's what you were saying? 

Ms. Ross:  This is Thelma.  

No, the question on the table was should the Department retain or amend the regulations providing for a loss of eligibility for low-performing programs? 

And my position is that, yes, they should be retained.  I'm open to them being amended but there should be some type of penalty associated with low-performing programs. 

Excuse me. 

Mr. Elkins:  Specifically at section 102 or at your institutions as well?

Ms. Ross:  Anywhere they're offered. 

Ms. Buck:  Thank you.  Chris Gannon?

Mr. Gannon:  Yes, for the record, Chris Gannon. 

Our position is that they should be retained as they stand now because disclosures and sanctions are both necessary to protect students, and taking those away would put 100 percent of the burden on students to protect themselves. 

So, they must be retained as they currently exist. 

Ms. Buck:  Jen?

Ms. Blum:  This Jennifer Blum.  So, in terms of my position, I'll piggyback off of Marc to say that I'm not opposed to having some sanctions.  It's what sanctions we have. 

And so on that point, I have a few different points to make. 

With regards to whether this metric actually demonstrates anything relating to training towards a recognized occupation, I want to again reiterate something, the point that was made yesterday, that this relies on income. 

It doesn't reflect at all on what job they have.  So, there could be absolutely zero correlation between the salary. 

Somebody could have decided to go into or could have walked out on making lots of money in a different profession that had nothing to do with their job training, and do quite well in life. 

And they would pass, right?  So, there's no correlation between the learnings and the statutory language in terms of their learnings to the job, the training, preparing for a recognized occupation. 

So, I just want to make that point.  I also want to point out that as I did yesterday, and I did, we're scrubbing just to make sure that the data -- I just want to make us sure the data on the PowerPoint is 100 percent correct. 

And I also shared it with another negotiator, in fairness, because it does reflect on other sectors, and so we're doing that. 

But I do want to reiterate also what I've said before, that the reason that we have issues with the sanctions is that I just don't believe that the intent of this is to have programs not do well in education, and in mental-health counseling and in social services, and have a bunch of business degrees. 

I just don't think that's the intent of the act or the intent of the Department of Ed. And so I think the sanctions don't reflect accurately on what's trying to be resolved. 

And then my only other final point is the sanctions, and it goes a little bit to the metric construction, but these sanctions as constructed, the Department in both rulemakings previously talked about wanting to make sure that there was an opportunity for self-correction by the institution. 

That this wasn't going to be about, boom, you're out. 

And while I appreciate the Department's intent with regards to zone, the fact of the matter is you cannot correct because it is a retroactive-looking -- the metrics are constructed in a way that there's just literally number opportunity, if any, to correct. 

And so that is sanctioned only, and actually, if you look back at what the Department itself has said in preamble, there was actually not just meant to be sanctions, it was meant to be an opportunity there. 

And so the construction of the sanctions don't work, but to be clear, we wouldn't necessarily object to any sanctions, it's just these sanctions.

Ms. Buck:  So, the order we have next is David, Bob, Neil, and Kelly.  So, David? 

Mr. Silverman:  Sandy, the word I would use for these sanctions are harsh, way too harsh. 

This one metric does not work, it just doesn't work.  There's no individual appeal. 

If you fail a 53-year-old performing arts school, there's no one to tell the story to because we're at 8.01 instead of 7.99. 

You're just going to make us disclose that one more year, we're going to close, who's going to go to the school?  Nobody, nobody. 

A school that fails is a 12.0.   After one year, they have to put on their website that if one more year, they're going to close, they're done.  

No one's going to come to the school, nobody.  There's no individual appeal.  You're just going to take away the Title 4 funding. There’s no one to go to.  There's no one to go and say, hey, here's my story, we're a 53-year-old not-for-profit, you're going to close us, collateral, because of a couple of bad actors? 

There's nowhere to go.  There needs to be some kind of appeal. 

I don't mean the income appeal, where you call your students and say, oh, did you make another thousand dollars? 

There needs to be someone you go in front of and say, hey, look at me, I'm not doing anything wrong, I've been here for 53 years,  you guys want to close us. 

It doesn't make sense to me; I threw a number against the wall last night.

If you close all those schools, I think you would be costing -- everyone's worried about jobs. 

I think you would be taking away $500 million dollars of payroll around the United States, and maybe that number's low. 

I'm not sure how many schools would close, but after four or five years, you're talking about $500 million in payroll, you're probably talking about $800 million of paying to the economy from these schools not spending money, paying rent, electricity, security, payroll. 

It doesn't work.  This metric does not work. 

It doesn't account for geography of the student, it doesn't account for geography of the school, New York versus Missouri versus Texas.  

It doesn't account for the economy. 

It doesn't account for their career path. 

You can't compare a performing art student or a social worker to an accounting major.  

It doesn't account for that, it's not working.  We don't think it's accounting for the reporting income properly.  

If people could be making money under $600, that's not getting reported properly.  W2, it's not properly recording tips properly, the metric's not working. 

The interest rate, I was talking to people yesterday.  People are getting their interest rate calculated 6.8 percent, when they actually know that their interest rate is 4.5 percent. 

It doesn't work.  You can't penalize someone; you're not even calculating it correctly. 

If you need an interest rate, use the exact interest rate, don't just use 6.8 percent. I've looked at it. 

I'm sorry to the financial aid people, but use the exact interest rate, let's do the calculation. 

The amortization doesn't make sense either.  Use the exact amortization.  It doesn't make sense to use ten years for a certificate program, 15 years for a bachelor's. 

Use the exact amortization.  Do the calculation right.  

You're going to close good schools.  If there's bad apples, go after the bad apples; go after the bad actors, leave the good actors alone.  

Thank you.

Ms. Buck:  Thank you.  Bob?

Mr. Jones:  Let me say point blank, as I won't repeat all that's been said, but this indicator is absolutely flawed.  It's been proven that way several times. 

I don't think it's even relevant to the conversation any longer.  There's a much bigger issue here, and I encourage the Department, I encourage all of us. 

We cannot have a public system the way we've arranged it, where we have fully accredited every one of those occupations and the schools that are delivering those occupations, and then in another system, turn around and say, oh, they're flawed, they're not good occupations, they're not good standards, it's terrible. 

Sorry, that doesn't work. 

It's a fraud and a scam on both the public funding system and the American public, and the students that you're trying to reach and the employer community that you're trying to reach. 

This is a fundamental issue of communication between the changing business world and the education world.  Those standards are moving at a very rapid rate. 

You cannot use old data to judge current and tomorrow programs.  It doesn't work, it's unfair to the student and the employer that they're trying to reach. 

There's no question that sanctions are always correct, but the question is what sanctions in terms of ensuring that there is viability of the program. 

Our job as public officials ought to be to ensure that marriage and to work on this program and the schools. 

And I said before, you have to put out the demand occupation data so schools have it. you have to put out a ranking of certifications, degrees, and other things. 

So, we know which ones are  valuable and which ones aren't.  You have to put out the combination of academic, technical, and the essential employability skills that people should have. 

If you want to judge in terms of the labor market demand and expectation, those are the indicators.  

The last point, disclosure, I have heard it since I sat here, doesn't work.  Wrong, it works perfectly if used perfectly. 

We need disclosure on all those points from debt to learnings to placement rates, and the whole list that we put in place. 

And then the question is how do we use them in working with the schools to ensure their success, and for those that are in trouble, deal with them? 

But this metric does not work, is not acceptable, and in fact, shall be removed. 

Ms. Buck:  So, I want to just say that there are eight more people now who have their name-tags up and we can go forward. 

We have spent a little over 30 minutes on this question, so you might ask yourself has the point already been made before you speak again? 

And also, when you do speak, try to be as concise as you can.  Neal is next. 

Mr. Heller:  Good morning.  Neal. 

I guess I just want to remind everybody of why we are here in large part, and that is because of a ruling, the latest ruling from the Federal Court Judge Contraris, which asked the Department or demanded that the Department go back and take another look at gainful employment. 

The American Association of Cosmetology schools sued, and that was the Judge's decision. 

And to paraphrase the Judge, he said that the gainful employment sanctions were based on a defective rule without an effective appeals process. 

So, it is incumbent upon us around this table and the Department to take a look at these sanctions, and either correct them or throw them out because they are based on a defective rule.

Thank you. 

Ms. Buck:  Kelly is next.

Ms. Morrissey:  I would agree that we do need some sanctions, however, I would support amending the current regulations so that we could, together, craft more meaningful metrics, meaningful disclosures, meaningful reporting standards. 

I would say that disclosures alone are not effective in informing students about the quality of the education they are about to undertake. 

One example that comes to mind is when I sit down with a student, they're completing the FAFSA, and the minute they hit submit, they see our school's graduation rate and our school's default rate. 

They immediately turn to me and ask me what does that mean really? 

I'm someone who lives in the data, I understand the data.  We have a graduation rate at the state level due to our accountability framework. 

We have an IPEDs graduation rate. Someone asks me what's my college's graduation rate, I of course am going to pick out the one that looks most attractive. 

However, the value of that data to me is that I'm able to dive into it and figure out what do I have to do to improve that graduation rate? 

However, a student doesn't have the benefit of that context.  So, to just disclose to them numbers that are pretty much meaningless, I think is really not getting at the heart of the matter. 

So, I think that the people around this table could really work together to come up with what is a more meaningful metric for students? 

Ms. Buck:  I think the next one is Marc.

Mr. Jerome:  And Kelly, I appreciate the comments, and maybe we'll have to caucus.

And Johnson, I appreciate your opening; the institution you spoke of I've been fighting for ten years to close as well.  I want you to know that. 

I'm actually asking the group to consider the ramifications of calling for total loss of Title 4 aid for programs that do not meet the standard. 

I believe, as I've been consistent with, that we're going to find that low-performing programs, especially for institutions that serve low-income students, are going to be found all across the United States. 

And that this group in particular is going to rue the day that you asked for basically program closure for a degree program that has above an eight percent debt-to-earnings rate. 

And I actually believe that we're starting to see the data out there, and this is what my request to the Department's going to be. So, I do want you to know, and I will present it, there is data out of the State of Texas which is excellent, and it's the first programmatic data that's out there. 

And I believe it's impeachable data and it shows that certain programs in certain majors have well above eight percent. 

And so if this Committee determines that programs, that degree programs, that have above 8 percent are so bad they need to be closed, it presents an entire policy dilemma difficulty for the Department and for the public of what to do with the identical degree program that has 8, 10, 12, 20. 

And in my case, because I'm in this so long, and I'll finish here, I've actually had a student apply to my institution and to a competing institution, identical program, one was GE, one was not GE. 

Our program passes; the other program, based on the data we know, would have about a 20 percent debt-to-earnings rate. 

And as I've been consistent with the Department, the Department couldn't have intended to have students go from a good-performing DE program, even if it fails, to a program that has worse DE rates. 

And I think we may have to caucus to deal with the issue, but it's a big issue. 

And I think the group, and I'm going to ask whether it's the consumer groups representing the AGs, there's something about this issue we're going to have to reckon with. Because my understanding is programmatic debt-to-earnings rates for everyone eventually are going to come out, and I'm just asking the group to really think about the implications of what we're saying. 

Ms. Buck:  So, next is Ryan?

Mr. Fisher:  Hi, Ryan Fisher.  I just wanted to take the time to say we support shutting down bad actors, but --

Ms. Buck:  Ryan, just a little closer to the mic.  Thank you.

Mr. Fisher:  -- that we support shutting down bad actors in the sector, but that there aren't any laws in the books for that. There’s the Accepted Trade Practices Act and all 50 states have these laws, and we use them and they're effective. 

It seems to be here that there's an issue and that this fix has captured more than just the bad actors and is capturing some people who are accredited and otherwise in good standing that provide service. 

And sometimes, when there's a fix, the pendulum can swing too far and I think that's what we have here.

Ms. Buck:  So, we have four more people.  I'm hoping we'll be able to close out this topic. 

John, Chris, Whitney, Sandy, and I guess, Anthony. 

And if you agree with what someone else has said, you can simply say I firmly agree with so-and-so.  Just want to kind of keep it to new information if we can. 

So, John I think is next. 

Ms. Sarge:  Could we take a pulse at some point at the end of each of them, where we would stand on whatever the general theme has been of an issue? 

Can we say where are you for sanctions that are amended, yes or no, that kind of thing, so that we can all kind of get to a conclusion?

Ms. Buck: Thank you for that suggestion, yes.  So, Chris?  John?

Mr. Madaio:  Oh, sorry.  Chris Madaio. I guess just two points.  

One, due respect, Ryan and I are here, we clearly are from different Offices and we hear things from the different Offices that we work with. 

So, I think there is a difference between accreditation and the Department's role in distribution of Title 4 funds. 

I mean, sure, there are accreditation rules, they're one aspect of the triad.  Schools have to be accredited and have to comply with whatever the rules are of their accreditor. 

As an aside, clearly there are some accreditors that can't even follow their own rules, different story. 

And then there are state licensing regulations, that's a second leg of the triad, and states have their ability to regulate schools  separate and apart and above from what our accreditors do. 

And then third is the Department, and they have the statutory authority and the duty as far as ensuring that taxpayer money is being protected to regulate the Department. 

So, to make sure the difference between that is clear. 

And then just lastly, I do want to make clear that no Court has ever struck down the idea of sanctions in totality. 

The recent opinion that caused the Department to delay aspects of the rule was about the alternative appeals process. 

So, the recent ruling of the District Court did not say that sanctions are  inappropriate or that having a prohibition on Title 4 funds would be inappropriate, simply that the as-applied way of alternative earnings appeals to certain schools was inappropriate.

Ms. Buck:  John?

Mr. Kamin:  So, in relation to, excuse me, the subject of whether disclosures are effective and what effect that would have, I think it's worth telling an anecdote about the original GI Bill again. 

Which is when the World War II era GI Bill came out, it preceded the Higher Education Act, obviously, and it was the first time that people outside of the upper classes were afforded these opportunities to receive a higher education. 

The first scandal that came up that was sensationalized was about TV programs, where the sham was these schools or these fly-by-night institutions would give you a TV, a week of training, and then release you, without any kind of preparation for a job in that field. 

At that time, late '40s, was there a demand for technicians who understood tubing and all the technology associated with this new field of televisions? 

Absolutely, program disclosures on that would prove that this is a very valuable field. 

And it was wide open for abuse by sectors who would just give people a TV and veterans who weren't that interested in higher education saw the opportunity for the TV and led these schools to make a lot of money off of them. So, we're very suspicious, then, about the idea that disclosures alone from DOL would be sufficient, knowing that those type of uses have happened in the past. 

It's also worth bringing up if this is overly burdensome for the Department of Education, we're still curious about where the role of accreditation fits. 

So, back in the '40s, I wonder how on earth could an accreditor accept the notion that there was such a lack of education being given and such abuse being taken? 

And just to bring this home, and I'm not sure what the ban is on mentioning institutions now or what happened, but Retail-Ready Career, the center in Texas, 400 veterans were shot down. 

They weren't Title 4 accredited so there's no reason that most of you would have heard of this. 

But it's happened I think two months ago, and same deal where veterans were flown into Texas, given hotel provisions, were taught technology related to HVAC and learned that the skills weren't substantial and they were shut down. 

I'd be curious for the gentleman from Texas to talk about the specifics for that.

So, we know this is still a very usable tactic to make a lot of money.  So, no, we'd be looking for a little bit more than disclosures. 

Ms. Buck:  So, let's follow up on Sandy's suggestion and just get a feeling in the room for whether you feel that the regulations should be amended. 

So, could we have thumbs up, sideways, thumbs down?

Mr. Martinez:  The sanctions?

Ms. Buck:  The sanctions.  Do you want to ask the question?

Participant:  Should the Department amend the regulations -- Question number one, should the Department amend the regulations providing for a loss of eligibility for a lower-performing program?  Show of thumbs. 

Yes, Whitney?

Ms. Barkley-Denney:  Sorry, I hate to be difficult, but I wonder if maybe the way to order it is should they get rid of them, and then should they amend them? 

We might get a better feel of where people actually are.  Because I think there are people who are going to say no and then yes, or then yes and then no. 

Ms. Sarge:  So, just to be even more clear, sorry, repeal, should they get rid of these sanctions? 

Because I do think that some of us will not be comfortable voting on should they get rid of sanctions altogether. 

Participant:  So, what's the language, stand-alone?  

Participant:  Yes, go ahead. 

Ms. Sarge:  Sorry, to Whitney's point, I do agree that there should about an order to this. 

So, I would say that the first question, unless other people disagree, the first question would be do you support the repeal of these sanctions?

Ms. Buck:  Okay, very good, so thumbs up, thumbs sideways, thumbs down.  Mixed.  Okay,  Jen Blum, would you mind giving us the language for the second question?

Ms. Blum:  Good Lord. 

So, do you support exploring the amending of the -- or do you support having sanctions amended, with these ones being amended?

Ms. Buck:  Okay, very good.  Again I see mixed.  So, the third question?

Ms. Blum:  Well, I think Johnson's asking for a straight out do you support retaining them as is? 

Ms. Buck:  Okay, good, let's ask that question. 

Ms. Blum:  Still mixed.

Ms. Buck:  And it's still mixed.  So, that's good information to have.

Ms. Blum:  Yes, I would just say that out of the three, obviously, the middle one of amending seemed to have the strongest support. I know that there was a couple thumbs down, but out of the two, it seemed like they were probably the greatest area of exploration as far as seeing if there could be some type of amendment to them. 

Ms. Buck:  So, having done that, I'm wondering if the people who still have your cards up to comment would consider us going forward to the next item? 

Or is there something that you really feel you must say?  If you really feel you must say it, then leave it up.  Okay, so the --I'm sorry?  Gregory?

Mr. Martin:  What we'd be interested in, a lot of people around the table have suggested that they would like to, that they would be amenable to, retaining sanctions in some form, not the sanctions we have now. 

And again, I'm speaking all in hypotheticals, if, right?  

It's not that we're definitely going to do this but if we had a DE metric, and let's just pretend that it's one you could live with. Obviously, some people have said they don't like the current one, they don't feel the current one is truly representative of programs' performance. 

But if hypothetically, you had a metric that you could live with, and we were not to have the loss of eligibility sanctions that we have now, I would be interested in knowing, very briefly, what ideas people would have for alternative sanctions. 

I heard one voice, I think it was Mr. Jerome, saying that giving schools an opportunity to lower debt, that that was one idea. 

I don't need to hear a treatise on what you put together about this, but just we'd like to get some general feel for what a sanctions regime might look like without the one that we have now. 

Ms. Buck:  So, for responding to Greg's question, I think the next person was Whitney. 

Whitney, can you respond to Greg's question?  

Ms. Barkley-Denney:  Actually, I have something to say in the earlier queue that I think is important, which is that I think it's really important that we characterize the measures correctly so there's not just an annualized rate that we are looking at, that there's also a discretionary rate, and those two things work together. 

And I think it is important that we talk about that when we talk about this. 

So, I took the suggestion of possibly going back to the 12 percent annualized rate last night and just sort of looked through the final rates. 

I know not everybody thinks they're good, but they're what we have for the data, to see what that would look like if we applied that to these rates. 

And I found that with an annualized rate starting at 8 percent and going to 12 percent, and discretionary rate starting at the top place where you would be sanctioned, 30 percent are put into a fail zone. 

There were 1037 programs with discretionary rates between 30.07 and 999.99.  And I think we can all agree that 999.99 is an unacceptable amount under the discretionary rate. Now, I will say, and we don't have to talk about it now, I will say there's maybe a median there, where both the discretionary rate and the annualized rate were possibly acceptable. But I just want to make sure that we're talking about this in the fullness of how this rule works and not simply focusing on annualized debt-to-earnings. 

Ms. Buck:  Thank you, so the next group is Anthony, Jordan, Marc, and Jennifer. Anthony?

Mr. Mirando:  Thank you, this is Anthony.  

Once again, I'm sitting here this morning and I'm very carefully listening to all of you. 

And I think, you know, hearing what you all are bringing to the table from your sector is probably very reasonable, but there are a lot of different sectors here. 

And being an accreditor we work very, very efficiently, as far as I'm concerned, in our Office, our Agency, towards ensuring accountability.  It's our number-one goal. 

We work with a lot of State Agencies on a regular basis, because I know I'm the one that's doing it, and we, too, are truly about getting rid of the bad actors. 

We, too, are about ensuring outcomes. There isn't one person at me office that isn't about worrying about the students. 

It's what we get up in the morning, come to work for, every day, hundreds of thousands of students a year. 

To sit here and try to understand this complexity, you need to understand all the factors that surround each one of you. 

And again, to try to fit this all into one fix is an impossible task. 

I absolutely agree that bad schools should be sanctioned, and I think everybody around the table agrees to that. 

It's about trying to determine what is a bad actor, trying to ensure that the student gets the best outcome. 

I agree their accreditors have a lot of information, don't know whether or not it's all of it, but I assure you that we have a lot of it. 

And when you look at professions that are licensed and they're successful in getting those licenses, that means that they did receive the information they need. 

And if they then go out into the workforce or not go out into the workforce, it's really up to them. 

And so are the institutions then preparing them?  I think if they get a license, it's yes. 

And so, again, whether it be you're a social worker, licensed social worker, whether you're a licensed cosmetologist, a licensed massage practitioner, a licensed veterinarian assistant, whether you're a licensed attorney, what you do once you become licensed is your journey. 

And it's really hard for this group to determine what that journey's going to be for that individual.  

And again, you're trying to fit a square peg into a round hole.  It's just not going to work. 

But if we could figure out another option, and maybe it includes are they licensed, and if they are, that's their journey. 

How are they doing with outcomes?  So, are you putting sanctions against a good school and it's not their fault? 

I don't think anybody here wants to put a good school out of business because they're there, and if they're that successful, they mean that they're offering a good program to a lot of students. 

And do you really want to take that option away?  It's about options.  

So, I'm in favor, and you saw the way I voted about sanctions, but it's not working the way that it's happening now.  It's not going to work.

Ms. Buck:  Thank you, Anthony. Gregory, do you have your card up or was that left up?  Okay, very good. 

There are three more people, and I'm hoping, then, that we can switch to the next point.  So, we have Jordan, Marc, and Jennifer. So, Jordan?

Mr. Matsudaira:  Thank you.  Is there some light that's telling you that?  How did you know that?  Got it.  

So, Jordan Matsudaira.  I wanted to make a couple of comments. 

I think that sanctions are an important aspect of the rule and the reason behind them, as Kelly and Whitney earlier alluded to, is that disclosures are effective. 

We have a lot of evidence in the research base. 

And I want to just note for the group that I passed along a kind of summary of the research literature that's been done over recent years about the last five to eight years or so, mainly in the economics profession, about how disclosures affect outcomes in the for-profit sector. 

And broadly across higher education, how they affect students' decisions about where to attend. 

And also, some information that I had mentioned yesterday about the relative performance of the for-profit sector, after accounting for differences in demographics. 

So, I had submitted that to the Department and I imagine they could distribute that to people who are interested. 

But I also submitted that as a public comment prior to these proceedings opening. 

So, on the Department's page where the comments reside, you can search under my name and find that comment as well, which has the full  citation list for people who are interested. 

One of the things that body of research will show was that debt-to-earnings, I don't want negate the kind of things that people have brought up about it not fully capturing the quality of programs that they're familiar with. But one of the things that research will show is that the metric, in fact, is correlated with outcomes that we care about. 

It's correlated first of all with debt. 

It's correlated second of all with earnings, really, really highly, with the exception of, perhaps, some sectors where earnings aren't reflected well in the SSA. 

But I don't want anybody to be under the illusion that IRS data in some broad kind of sense are a poor reflection of people's actual earnings. 

These data are the gold standard for measuring what's happening in the economy.  

We kind of rely on them for the Government's most important function, which is collecting taxes to fund what it does. 

So, with the exceptions that have been pointed out, which are relatively small sections of the economy overall, these data really are the gold standard for doing anything related to earnings. 

The notion that BLS -- I won't get into the BLS data. So, the other things that DT are correlated with are repayment rates, measures of whether students are earning over $25,000, kind of a benchmark high school graduate salary, or it means gains, and so on. 

So, you can read some of the work there. 

The other thing that I wanted to bring up just briefly about when Marc was talking about the consequences of potentially closing down programs with low debt-to-earnings.  

This has come up a little bit.  Laura talked about when Corinthian ITT Tech closed down, how the community college system in California kind of received an inflow of students. 

I want you to have in your head that that kind of anecdote is kind of supportive of research evidence about prior instances of accountability, where we have low-performing schools that are failing accountability measures being shut down. 

So, the recent study by Stephanie Cellini, Raj Darolia, and Leslie Turner show that when schools are shut down for poor performance on the CDR metric, most of the displaced students, nearly all of the displaced students, end up in community colleges for the most part, and community colleges where earnings are generally the same and debt is much lower. 

So, not at all to give short shrift to the disruption that students face in that kind of process, but we should also be considering the likely possibility that shutting down the poor-performing programs results in students getting at least as high earnings, if not higher, and much less debt. 

Thanks.

Ms. Buck:  So, we have two more people, and then I think we can move on to the next item. 

So, we have Marc and then Jennifer. 

Mr. Jerome:  So, just two points for the Committee to think about.  

Really, and you heard it in David's, I guess, frustration with the rule, we've always been looking for a way, if we get data that our programs are not performing well, that we can make a change to help students. 

I do want the Committee to know that the way the rule is written right now, if we receive data for the first time that a program isn't performing well and we make the decision to, through scholarship or otherwise, totally suspend debt for that entire program for every single student who enters, which to me is the most ethical thing we could do, the program will not be redeemed. 

It still will fail.  And that's something I've advocated and I have a proposal on it. 

And I think it's something that last time around, the consumer groups recognized would have a very beneficial impact on institutions. Not all institutions can afford to do it, but those that can and are willing, it's something I'd like the Committee to look at. 

My last comment is a little bit back to Jordan. 

One of the last things on the penalties is the data does show, across both sectors, still, even though Johnson pointed out it may be easy to lower default rates, there still are many institutions that don't have the resources or ability, and default rates across the country are very high. 

And just for the record, many of the programs across sectors with the highest default rates pass the metric. 

Many of the programs with the lowest graduation rates pass the metric, and most programs where default rates are greater than graduation rates pass the metric. 

And with those three facts, that is why we have a lack of comfortableness with the current penalty regime.

Ms. Buck:  Thank you, and last, Jennifer? 

Ms. Blum:  I actually just wanted to respond directly to Greg's question. 

Mr. Martin:  Thank you

Ms. Blum:  You're welcome.  

And I am curious, and I remember it, I am curious about Marc's proposal too, so I would second that it's worth exploration, that his proposal's worth some  exploration. 

But I'll just give you a couple of small examples but examples of where the sanctions, not just relating to the metric, changing the metrics up, but the inability to offer another program for three years, are in the same SIP. 

So, I have mentioned now a couple times the SIP issue, and it is an issue, because there are multiple programs that can fall in the same SIP. 

And so the inability to offer even just a different type of program but it happens to fall under the same SIP is very punitive. 

But more importantly and more to the point, I also have mentioned now a couple times this morning self-correction, right?  Self-improvement. 

I mean, part of this really ought to not just be sanctions but the ability to improve oneself. 

And so if you have a failing program but then you modify your program in a way that the Department -- and the Department has to approve new programs anyway, or at least for us they do. 

And your accreditor does too in many circumstances.  

So, if you can arguably go through the approval process for a new program, and I'll give you examples, there are many, or one of them, online programs that offer programs in different formats now, right? 

We have credit-hour-based and we have competency-based, and there's all sorts of new innovative methods that are tried and true at this point, that demonstrate decreases in cost. And for a school to not be able to then -- if they have a failing program which is no fault of their own, it just happens to relate to the income that teachers make, for example, and they can't then self-correct and offer a new program, I think that is overly punitive and should be a correction that can be made. 

So, that's an example of a sanction that could be removed or changed.  

And then I do want to, on Whitney bringing up discretionary, I have asked my team to look at discretionary. 

I hate the discretionary.  I mean, I don't hate it, I like having it there, but I'm not good on  articulating issues around it. 

And so I've asked for what issues are presented around the discretionary rates, because we didn't talk about that much yesterday, and I agree with you. 

So, I'd like to reserve the opportunity to bring back up the discretionary rate and any issues that are presented. 

Because, actually, I think Whitney's raising a good point that it wasn't fully discussed yesterday. 

And then very finally, when we talk about other sanctions, I think Ryan Fisher brought up a very excellent point that the Department ought to be very mindful of what sanctions exist within the triad, both its own authority to bring sanctions not under gainful employment -- but I mean, they have tons of program review and audit sanctions valuable to themselves -- but then also those of the accreditor and those of the states. 

And the states, of course, and accreditors, are availing themselves pretty actively these days of those. 

And when the triad was created and throughout time, the triad was not meant to layer and layer and layer and layer.  It actually was meant to create balances of who's responsible for what. 

And so I do think the Department needs to be mindful of what other sanctions exist in the world when they go adding new ones. 

Ms. Buck:  So, thank you for responding to Gregory's question.  Would you like  to take a five-minute break before we go on? 

I hear some approval of that, so that's what we'll do. 

(Whereupon, the above-entitled matter went off the record at unstated time and resumed at unstated time.) 

Thank you, so I want to make two suggestions with regards to our discussion going forward. 

One, ask yourself whether there is something new that you have to say because, of course, there is overlap between the various points. 

And two, try to state your position on the question first before amplifying and giving reasons.  That's so we can just kind of see where you stand. 

So, I think we're ready for the second item.  Yes, Gregory?

Mr. Martin:  Yes, just to build on what you just said, in that question, note there are two parts of it. 

Should institutions be required to provide warnings to students about lower-performing programs? 

And secondly, how should the warnings be changed if the loss-of-eligibility provision is revised or removed? 

So, I'd like some response to that as well, and for purposes of this question, it doesn't matter whether you're in favor of the removal of that, it's just asking if. 

So, I'd like to hear some ideas on that as well. 

Ms. Buck:  So, you're thinking that the second item or the program disclosures alone effectively have been covered and that we're ready for the third item? Is that right? 

Mr. Martin:  No, I'm sorry, I missed out on that one. 

I think we have, I do believe we have, discussed, we have had some discussion about that, but I would entertain any more comments about that before we move on. 

Ms. Buck:  Okay, so are there people who do want to make additional comments that haven't been made to the second point, are the program disclosures alone effective in helping enrolled and prospective students identify lower-performing programs with respect to job earnings? So, we have several names.  We have Christina, Jeff, and then Jennifer.  

So, Christina? 

Ms. Whitfield:  I wanted to raise the issue about the portion of programs that don't actually disclose this information.  So, if you have very small -- I'm sorry, this is Christina Whitfield. 

And I'll be more clear, I don't think that the disclosures alone are effective, and in part, I think that's because many programs don't disclose information because they have low levels of completers or low levels of awardees. 

So, you can have a small community college, for instance, where most of their certificate or diploma programs don't disclose any of this information. 

And I just think that's to protect the rights, the privacy rights, of the effective students. 

But I also think that the flip side of that is that you can have situations where very little information is actually available to students. 

And I don't know if this information is available from the Department, but I would be interested to know if anybody's tracking the proportion of gainful employment programs that actually disclose the information. 

I'll let you answer that question. 

Ms. Buck:  Gregory do you have your card up to speak or -- okay, just wanted to be sure. 

Okay, so we're now going to go to Jeff and then Jennifer.  And if you could state your position first and then follow.

Mr. Arthur:  I will do that.  

So, yes, currently, for reasons we've stated before, disclosures alone are not enough or not effective because of the issues we discussed, that the data's not available for all institutions and all programs. 

But given that we're in the age of big data and the data will be there, it's a matter of when we've got either a Scorecard or some derivative of it, it has a real potential to be a game-changer in higher ed. 

And I think when you have full data there, it will be used and promoted, and I really do think that we've got a day coming when the Scorecard is a game-changer for higher ed. in the form of disclosures. 

As it is now, the gainful employment disclosures are provided in a vacuum so they're not really helpful. 

When you take a look in any given community, you may be having just a few institutions that may offer a program you're interested in, and likely, only one that you're considering has any information available. 

And we've discussed those issues before as well. 

And of course, the data that's been chosen to be disclosed in the current gainful employment disclosure can be misleading in the issue I stated about the way time to completion is presented, and many of the other data elements. 

And if we have a fair, solid data system, and again, I like the Scorecard, it's a fantastic database, many -- the New York Times has used the higher ed. 

Others have used that Scorecard database to present data from it that's  extremely interesting. 

I especially liked the one the New York Times did that showed the institutions that lifted students' family income by two quintiles. That was something very fascinating, that we were able to see across a given state the ranking of institutions and their effectiveness in raising students. 

So, that's an indicator, that is one indicator, of quality, or an indicator of somebody, an institution, that's having an impact on low-income students. 

So, I'll leave it at that. 

Ms. Buck:  Thank you.  Jennifer?

Ms. Blum:  It is similar, I guess, to Jeff's but I will say that I think the question, I just want to be careful about the question. Because can disclosures be alone effective?  Yes, possibly.  Are these disclosures alone effective?  Absolutely not. 

And that, we'll get into that at the next -- or I guess it's not the next issue but the issues of disclosure. 

These disclosures are completely, not completely, they are very flawed though, and so we'll reserve judgment. 

I just think this question actually might be better asked after we go through all of the flaws in the disclosures themselves. 

And then, again, I do want to reiterate that without accuracy, you don't get to the full transparency for students, and without comparability, you're not fully informing the student. 

And so I would just have a very big cautionary note on relying on the disclosures pieces because there's no ability to compare across higher education. 

So, I think those are the biggest issues with disclosure. 

Ms. Buck:  Okay, Jordan, I see you raised your name.  

And remember to respond first to the question, give your position on the question first. 

Mr. Matsudaira:  Sure, this is Jordan. I don't think disclosures alone are effective, but I do think disclosures are effective in influencing where students attend programs. 

I just wanted to ask a question. 

So, just as somebody who's familiar with these kinds of data from one context, which tends to be kind of a research-oriented context, I'm just curious if the people who are commenting on how they're inaccurate or how they're kind of insufficient, or things like that, will kind of spell out from their perspective what the inaccuracies are? 

So, you know, at the tail end of Jennifer's comment, I kind of thought you were talking about just the incomplete coverage of the kind of metrics across different sectors, but I wasn't sure. 

And it would just help me appreciate where the critique is coming from. 

Ms. Buck:  So, do you want to respond to that question, and then we'll go onto Pamela?

Ms. Blum:  Yes, thanks, thanks, Jordan. 

Yes, I'm talking about the inability for students to be able to compare the results or information across programs in higher education. So, again, I'll reiterate what I've said before.  Our institutions in the U.S., but actually abroad too, compete primarily, actually, with nonprofit institutions. 

And so our students are making choices between our programs and lots of nonprofit institutions.  And so to the extent that we're disclosing information, it's not available to them across the board. 

I see Todd.  So, let me just say that what I'm suggesting here is not necessarily that we extend flawed disclosures across all of higher ed. 

So, I do think this goes back to the really, really fundamental question of what the Act was meant to apply to in terms of types of programs. 

And so I think that what you disclose at certain levels of degrees is very different, and so one-size-fits-all types of disclosures make no sense at varying degree levels. 

And so I'll just leave it at that.  I don't want to be misconstrued by Todd. 

Ms. Buck:  So, let's go onto Pamela, Whitney, and then Todd?

Ms. Fowler:  Disclosures alone, no. You look at the consumer information requirements in the HEA, it's tons of information that we throw at students.  I'm convinced they don't read any of it. 

If you want a student to know something, you have to sit them down in front of you and tell them.  And that's very difficult for those of us that have more than ten students on our campus. 

But disclosures alone, I don't care what you do, if you send it to them, if you email it to them, if you text it to them, they get to the point where it's overload and they don't read any of it. 

Ms. Buck:  Thank you.  Whitney?

Ms. Barkley-Denney:  Thank you for that, Pamela. 

I agree entirely, and I think with  the nature of education, particularly as so much of it is moving online, those face-to-face disclosures are going to be even more difficult prior to enrollment. 

So, I don't want to scoop many here, but I've mentioned it before that we have worked on a number of focus groups in Florida, where we worked with a totally non-biased group that came up with the questions and we just talked to students about their experiences in school. 

And my takeaway from that, and I think what is going to be in the report that I'm going to be authoring at some point, was that students -- and let me say, I love the Scorecard; it's not about the Scorecard itself. 

But a lot of the people that we interviewed enrolled in school because a) they knew someone who had gone there. 

That was number one in their understanding of the quality of the education. Well, my dad went there or my mom went there, or my sister or my best friend, whoever it was, had gone to the school and had -- it was interesting -- an experience.  

Whether it was good or bad, that personal touch is what led them to enroll. And then marketing was certainly a part of it, particularly if they had seen different advertisements about the school and what they were advertising. 

And then also just tours of the school and seeing the types of options that the school offered, whether it was really good equipment for recording schools that was better than another school that they had toured.

And many of them, they never looked at more than one school, right?  They went to one school, they looked at it, and they decided this is where I want to go. 

So, within the student experience, we did not hear a lot of people saying, yes, I looked at the College Scorecard. 

Now, the caveat on that is the vast majority of these people, when we did just a check-in on what  their finances, who are what we consider to be in distress, had been before school or after school. 

So, these are not people generally, they were older, they didn't have a college counselor that was walking them through and showing them the Scorecard information. 

Or if they were right out of high school, their schools were less likely to be the type of college preparatory place that would say here's the College Scorecard, this is what it means, and this is how you need to synthesize this information. 

And they were also, many of them, first-generation college students. 

So, that was our experience in thinking about disclosures and seeing that, actually, there were a lot of other things that went into the decision of the students, but not necessarily what the College Scorecard said about the school. 

So, again, love the College Scorecard; it's not adequate. 

Ms. Buck:  Thank you.  Let's go on.

We have Todd, Johnson, Jeff, and Jennifer, and again, please state your response to the question first. 

Mr. Jones:  This is Todd, and my answer is undecided.  It was going to be quiet morning but I decided I have to address a couple of issues brought up. 

I think Pamela's quite right that you get to students by engaging them directly.  

I think one of my colleges, actually several, do this but I think one in particular, where to change majors, you actually have to have a meeting in the Financial Aid Office and with Career Services, where they discuss how much longer it's going to take you to complete. 

You know, you change in junior year, it's going to take you five years potentially, if you massively change majors, for a baccalaureate degree. 

And also talking about what does that mean for your potential income? 

I mean, it's great to be a struggling artist, but if you're taking on debt to become an engineer and then decide that you want to be a painter, and you find out that being a self-supporting painter may not be as lucrative as you had hoped. 

I bring that up because it is a matter of information, and it's about the right information. 

I think that's one thing that some folks, some institutions and, frankly, by comparison, some sectors need to keep in mind. Let’s use, for example, these casual comparisons among sectors about DE rates.  I mean, remember, gainful employment doesn't include non-completers.  You go to the Scorecard, we have non-completers. 

There are institutions being shown that they have half of their students transfer out or not complete, often institutions dealing with at-risk students. 

That doesn't come up in gainful employment, and I am certain if we started integrating that, I wasn't going to bring that up, but if we start integrating that into the data, maybe we'd have a more effective measure. We’d have a better idea of actually the effectiveness of programs, but that's what happens when we start delving into the data a little more deeply. 

I don't think the world of big data is going to come in the way everyone thinks.  

As I often say, there's more data about you in this than most things you give away. For those of you on audiotape, I'm holding up an iPhone. 

But there isn't going to be, or over my dead body and that of hundreds of thousands of others, the master database in Washington that tracks you from birth to death. 

So, let's think about what we're really going to have here is quality individual engagement of students, and instead of focusing on proxies, but to the extent that we're going to, as we have with these regulations, and that's exactly where we're going to go. 

Ms. Buck:  Thank you, and next is Johnson. 

And when you put your name tents up, if you can put the name towards the table, it would help me.  Thank you. 

Mr. Tyler:  Hi, Johnson Tyler.  So, I think disclosures are good, I don't think they're a solution whatsoever. 

I agree with Whitney, people are convinced that they want something and they are just going to gloss over that.  That's the experience of my clients. 

Ms. Buck:  Thank you, and next is Jeff.

Mr. Arthur:  Yes, certainly, persons choose institutions for a number of reasons.  It might be the football or basketball team, of course, and maybe their father or mother went there. 

But I think there's an increasing number of prospective students that want to understand not only what the opportunities are at a particular institution, but programs within that institution. 

And I think we could do a good job, I think it would be used.  We don't know.  The information is not readily and easily available on opportunities within different programs at a particular institution. 

And I believe we need to do a better job of connecting students to programs with opportunities that give the best chance to graduate, but primarily, to connect those graduates to employers. 

And I think when we look at consumer information, there is an opportunity to actually have prospective students use that to make better choices, whether it is the institution or the program within the institution. 

Ms. Buck:  Thank you.  So, we have Jennifer, Ahmad, and Sandy.  So, Jennifer next?

Ms. Blum:  So, a lot of people brought up the Scorecard and so I really feel compelled to speak a little bit to the Scorecard, which I know is very well intended but deeply flawed. 

And so while we're talking about -- and I want to second a couple of things that Todd said about it in particular and be very specific. But I do want to tie it to this rulemaking when we're talking about, and we'll be talking about it more later, but when we talk about the effectiveness of GE disclosures. 

We need to really keep in mind that on one page, we're providing students information about program-level data on GE, and then the student turns around and has the Scorecard and it's very conflicting information. 

And so we need to figure out a way to align data so that the student is getting the accurate picture. 

And so I just want to give a couple of examples. 

As I mentioned yesterday, the Department or the Scorecard includes all institutions at the undergrad level, regardless of what percentage of students are actually undergrad students.

And in our case, that's a big deal because 85 percent of our students are not undergrad.  But then they portray it as being institution-wide data in fact. 

So, I want to point that out.

And then, to Todd's point, debt and earnings are only reflected for students receiving Federal loans, but a third of our students don't receive Federal loans in their earnings. 

And I know you don't have access to that data, but we need to be very careful about how we reflect earnings at an institution when a fair number of students actually don't even use Title 4 and might have different earnings. There’s the full time, of course, which everybody loves and adore the first-time, full-time issue of undergrad. 

So, in some cases, there are cohorts as small for us as two students. 

So, there was information, as it relates to our institution, that was portrayed as institution-wide, literally based on two to three students, depending on the metric. 

So, I know that a lot of people like to speak favorably as an example on the Scorecard, and it does provide, in some cases, some useful information. 

My point here is to say that we need to be very careful.  

And I know that Christina pointed out on cohort levels, we need to be very careful how we speak to cohort levels in disclosures. 

And we need to make sure that if we're going to do, and we are I'm sure, on the GE disclosure piece, I would like to put forward that there needs to be some relevancy and some comparative nature between institution-level data on the Scorecard and the GE disclosures. 

Ms. Buck:  Thank you.  So, we have Ahmad, Sandy, Jessica, and Whitney.  

So, Ahmad?

Mr. Shawwal:  Ahmad Shawwal, University of Virginia. 

So, it's our opinion that program disclosures are effective but they are not effective alone, and I have a few points. Contrary to population belief at these tables, there are a lot of intelligent students out there who do know how to read and write. 

And had they know this kind of information was out there, they would have used it in determining what institution to attend. Maybe we ought to focus on how this information is delivered, because nobody wants to read a document that looks more like a terms of service agreement. 

And to that, I challenge anyone here to tell me they fully read their last terms of service agreement that they accepted. 

(Laughter.) 

Mr. Shawwal: This goes back a little bit to some of the previous conversations.  Outcomes are retroactive, that's just the nature of outcomes. I think when we look at all these numbers, maybe we ought to think about the real faces and lives that are behind these numbers. 

It seems like we are discussing a lot about institutions and what we could do to help the institutions. 

And I would like to remind everyone that the students that are suffering the consequences of these very poor programs don't get the second chance that we are trying to give these institutions. 

A single mom does not have the opportunity to go back to school to get a better degree or to get a more reasonable program to attend. 

So, thank you. 

Ms. Buck:  Thank you, Ahmad.  Sandy?

Ms. Sarge:  So, to the question are program disclosures alone effective in helping enroll the prospective students identify lower- performing programs, my answer is no, but not for necessarily the same reason. 

I think it's part of a bigger picture of disclosures. 

And I agree completely with what Ahmad just said, in that students these days in kindergarten are being handed tablets and are learning how to triangulate information and data, and are taught more how to think, not just rotely regurgitate information, at a much, much younger age, due primarily because of the technological advances we have at our fingertips now. 

And because of that, I think that what would be helpful is not -- I, at least, would see it as much more neutral information if schools were to offer disclosures or links to information that is pertinent to success metrics. 

Like job information in the state, maybe it goes to a state database that says if you plan to stay in Colorado, where I'm from, here is the employment information about that. 

Or anywhere where you could say, if you want to leave, here's where you could go find a job. 

So, I think that disclosures about -- I don't like the disclosures that we currently deal with, mainly because I think the data's flawed. 

So, we all seem to be in some sort of a position on that.  But I do think that other disclosures are important to students. 

My concern in hearing everybody's individual perspectives about, and, Chris Gannon, in particular, I really don't want you to take this incorrectly, but to what Ahmad literally just said. 

We sometimes seem to be treating our young adults and older students as if they literally do not have any ability to think for themselves. 

And I agree with what Whitney said, the salesperson does, in consumer issues, by its very nature, have more information about the product. 

But at the same time, I find it difficult to not hold individuals somewhat accountable to their own destinies and to do their own research. 

And my children harp at me all the time about this and they're so good at finding information, I send them off to find it. 

But Ahmad just said it, unbeknownst to all of us, there are students out there who can actually read and write, and he's right.  

So, where do we find that balance? Where do we find a balance?  

So, my ideas would be let's give disclosures that allow students to go out and get other information beyond just what I'm providing about my school, that's neutral, whether it's a Government Agency, a State Agency, consumer  reports, whatever. 

But just something that leads them to go out and be able to make their own decision, informed decision.  Thank you.

Ms. Buck:  Thank you.  Jessica, then Whitney, then Daniel. 

Ms. Barry:  Hi, Jessica Barry.  

I wanted to respond to, I believe Jordan asked a few minutes back for specific reasons of why the disclosure doesn't work. 

I think that the sometimes casual nature of the language on the disclosure is very confusing to students. 

I think the attempt to take that data and bring it down to a level that someone who is not a higher ed. expert could understand is still very confusing to the student. 

And to come back to the Scorecard, I know we keep coming back to that, I started my career as a graphic designer, right?  So, I appreciate well-done graphics. 

I think that the Scorecard, what we're getting to with GE, is we're trying to provide to a student, are you going to receive a good return on your investment after making an investment in this college? 

And the one thing that I like about the Scorecard is that it gives the student the national median so they have something to compare that institution to. 

And then it tells them is this an average return on investment?  Is this above average?  Or is this below average?  And they have something to compare it to. 

So, I think disclosures can be effective.  Are the current disclosures effective?  Probably not in a lot of circumstances. 

But if they were well-designed and if they talked to students about how could we better present this data to you, and what would be effective, students, they understand that. 

We have seen, especially over the last ten years, students and parents understand college debt, you know? 

They've heard the horror stories, they've heard about the great investments in college education. 

And so if we talk to them and see what types of information they think would be most valuable, I think we could make the disclosures much more effective. 

Thanks. 

Ms. Buck:  So, we have spent almost 30 minutes on this point, and we do have the next point to consider. 

I'm just going to ask the people who have their tent cards up to just think about is what they're going to say something that hasn't already been said? 

Or could it be said later?  Or does it have to be said now? 

So, I still see four.  So, Whitney is next.

Ms. Barkley-Denney:  Sure, so I wanted to say two things.  

One is that I think that particularly from a consumer aspect, we certainly respect students' ability to read and write. 

But I think that we would be remiss in placing all students in a certain category and level of the ability to synthesize that information, and particularly, the ability to know what that synthesis means, right? 

A lot of the borrowers who you're talking about, who are going to career education programs -- and again, this is not a slam on anybody, that's important -- are people who are low-income, who are low-wealth. 

Which I'll talk about why I think that distinction is important in a minute, who are encountering college for the first time, who may not actually have parents to guide them through this, sometimes because they're working, sometimes because they're absent, sometimes because they don't know either, and certainly, are not going to, again, to the types of high schools that imagine many of us went to. 

Actually, I didn't go to a great high school but a lot of people did, where you had counselors who are willing to say this is a good decision for you, this is a bad decision for you, regardless of what sector the person is looking at. 

And so I want to be careful that we are not talking about the students with the very highest level of both ability, parental support, and community support, who end up at our best institutions, the Yales, the Harvards, the UVAs, and are talking about the students who might not have the access to that information or the ability to synthesize that information. 

Because it's simply not something that they have the cultural community or academic background to do. 

So, I also wanted to say that it's important to me when I'm thinking about DE rates, and I'm not trying to open up a philosophical discussion, just to explain where I'm coming from, I'm thinking about wealth, not income. That’s what debt-to-earnings, to me, measures.  It measures what you have left after you use your income to pay off your debt. 

And what we know about wealth is there's a very serious wealth gap in this country that if you read a horrifying paper from the St. Louis Fed, authored by William Derrity and Derek Berry, it talks about the fact that we're actually at a point now, guys, where college education is not erasing the wealth gap, right? It erases the income gap, and I think that's an important distinction, but not the wealth gap. 

And debt and college debt is playing a really big role in that. 

So, I think that when we think about the DE rates and what they're disclosing, we actually have to think about the disclosure of wealth and not income. 

Ms. Buck:  Okay, so let's try to keep the comments as brief as possible so we can move on.  Bob is next. 

Mr. Jones:  I just want to focus for one moment, this discussion seems to be focused completely on the presumption that disclosure is a solution to student engagement. 

Disclosure has very little to do with that issue.  

It is about the Department's role, it's about the accreditor's role, it's about a whole series of other actions that will be taken in the process. 

The question is what data do we need to put in front of those people to take their actions, whether it's counselors or other kinds of people? 

It is not a solution to just student engagement.  

I think that's a huge mistake, as has been pointed out, to presume that with just disclosure a student will make all the right decisions, only if the rest of the system that we design is responding. 

So, our responsibility ought to be to identify those data items, most of which we don't have today, and to ensure that people are playing the role with that data that they should play in this process, accreditors, other kinds of people. If we don't, blaming it on students, whether we did it right or wrong, is not ever going to work. 

Ms. Buck:  Thank you.  Now we have Ahmad and then Jeff, and Sandy, is your name tent up?

Ms. Sarge:  Yes. 

Ms. Buck:  Okay, so then after Jeff would be Sandy.  Ahmad?

Mr. Shawwal:  Ahmad. 

I'd just like to quickly clarify that by my earlier comments, I did not mean to say that we should assume that all students are at the same level, but that we should think about our tone when talking about students and not do that from a place of condescension. 

Ms. Buck:  Thank you, and thank you for the conciseness of your comment.  Jeff?

Mr. Arthur:  Mine's concise too.  

I'll just point out that half of our students are  PALE-eligible, the majority are low-income.  

But 30 percent have served in the military.  Veterans were in the densest military community. 

We have a 28-year-old student average; many have taken out mortgages and all. 

And I would say that they're more sophisticated than you think and they're more worldly and understand what they're doing, and able to ingest and look at consumer information and make  sound decisions. 

And I would also just point out that in case people aren't aware, the Scorecard database is not just what's presented on a Scorecard website.  

There are 1500 to 1700 fields of data.

Ms. Buck:  And, Sandy, do you want to close out this issue?

Ms. Sarge:  This is Sandy.  I actually just had a question to the Department based on Jessica's comments, which I thought were really interesting. 

Did you, at any time, do any kind of focus groups or get any actual student input when you were creating the disclosure pages or the templates? 

Thank you.

Mr. Martin:  Yes, we did have focus groups before completing the disclosures templates and we did take what we got from those focus groups, we took it into consideration not only in the questions we asked, but how we presented the information. 

So, the answer to that is affirmative. 

Ms. Buck:  So, Gregory, could you remind us again of what you wanted them to think about with regards to the last item? 

Because we may have forgotten. 

Mr. Martin:  Sure, I just want to remind people there were actually two questions there, and I didn't want the second one to get short shrift. 

How should the wordings be changed if a loss-of-eligibility provision is revised or removed? 

And I want to be able to look at that not with an eye to whether or not they think it should be revised or removed, but if it is. Because I wanted to get some input on that. 

Ms. Buck:  Thank you.  So, we'll start with Jennifer. 

Ms. Blum:  And I guess this is assuming that if there is a loss -- if there's not going to be a loss of eligibility. 

So, I guess it's the first question and sort of implicit.  If we were to do disclosure-only and how to treat the warnings, is that --

Mr. Martin:  Well, let me just, the first part of the question just says should institutions be required to provide warnings about lower -- so, I would look at that in terms of both if there were sanctions or even if there continue to be sanctions. 

The second one is specific to what if there were no sanctions. 

Ms. Blum:  Okay, so on that second question, so if there are no sanctions but you're asking about a warning, I would say, actually, kind of like Jessica Barry's comments on the national data. 

So, rather than making it a warning per se, if you had national data, if the disclosure page somehow included X percentage of programs in this field, you know, had X percentage of result. 

And so sort of piggybacking off of the Scorecard, if you will, in terms of that national comparative, that would be something to consider. Because the minute you start doing warnings per se, and you have no sanctions, somebody else said this yesterday, warnings are confusing to students. 

What are we warning about?  We're not losing Title 4 so what is the -- I mean, obviously, there is a flag, but warning is probably not the right word. 

So, the flag would be a comparative across the national results, or something like that, which is a piggyback off of the Scorecard and there is some consistency. 

So, that would be a thought. 

Mr. Martin:  Okay, thank you, and I think what we're talking about here -- and I think you sort of addressed that -- obviously, there's two things. 

If there are sanctions, then a warning as we currently have, a warning that the program could lose eligibility, which is a statement of fact, if there weren't sanctions  but you retained rates, how to put those rates into context. 

You were saying that a warning wouldn't be appropriate. 

If a warning wasn't appropriate but you had DE rates to disclose, what would be, what would hypothetically be, a context to put that into?

Ms. Blum:  Right, so let me just respond. 

So, I think I answered your second question, that if you have no sanctions, I think you don't think about it in terms of a warning. But, yes, is there a national data value fitting into the national comparison?  And

I think the answer is yes. 

If you do retain a form of metric, I would caution, and again, I guess it's a theme that I'm saying, that the opportunity to improve as a program is shot with the warnings. 

Now, I'm not saying that students shouldn't be aware and somehow informed, and so maybe it's a restructure of the, quote, unquote, warning or something. 

But really, to be honest with you, the way you have it framed, and again, it's really hard to discuss these issues separately. 

Because, of course, if you get rid of the zone, right, then you're going to be changing the timing of the warning and all of that. 

And so that piece I think might frankly be better discussed once you put a proposal on the table.  I'm just being candid, that this all has to fit together. 

But I would say that there are issues associated with the warning itself in terms of the language and then the timing of it. 

But again, I want to be really clear, I'm not saying there shouldn't be some form of notification to students. 

I'm just saying that the timing of it disallows for that opportunity to improve, that I think the Department is still striving for. 

Ms. Buck:  So, we have Daniel, Jeff, Marc, and Johnson, and I'm going to ask you again to respond with your response to the question, and then explain. 

So, Daniel?

Mr. Elkins:  We do think that institutions should be required to provide notice or disclosures.  The issue with a warning is I think what is the intent behind that word? 

So, I have a little bit of uneasiness with the words about warnings and how they imply, and I think that we need to kind of discuss what that would look like. 

But as a general whole, I think that veterans tend to read disclosures or warnings or notices, but in the event that they don't have that information, how can they make good decisions? 

So, you have to empower people to make good decisions.  And I think that without good information, there is a greater need for sanctions. 

But if you can provide people with information, then you can at least see where things are, and we can have a discussion about what sanctions could look like. 

Ms. Buck:  Okay.  Jeff? 

Mr. Arthur:  So, let's just use the one-stop shop Scorecard for an example and let's put the data wherever the facts are there, provide comparison tools. 

If we use that platform, have the data available, and whatever, if there's a situation with an institution's whatever it is, graduation rate, debt-to-earnings, whatever it is, it could be flagged. 

And that effectively can be construed as a warning, but just present the facts as the facts and put it all there.

Ms. Buck:  Thank you.  Marc?

Mr. Jerome:  So, first, I give great credit to the Department for actually providing a warning that is factually accurate, but it ends up being practically misleading. 

And again, I'm going to keep coming back to the group, I'm looking for just some help, where it ends up that the evidence is clear that the program, that almost all programs, the majority of programs, in a typical field, would fail. 

This warning is essentially a death knell to the program, and I'm just looking for some practical help because I believe it ends up being misleading to students  and not serving the public appropriately. 

And so I'm not sure what the solution is, but I'd look for some help from my colleagues. 

Ms. Buck:  Okay.  Johnson?

Mr. Tyler:  So, I view this question as two parts, the first is should there be a warning?  And the answer is yes. 

The second question, if there's no penalty as a result of all of the work we're doing today, should there still be a warning? 

And I have to say, so many of my clients now come to me and say, why did the Government give me money if they then close down this school later on? 

Why did they give them money if Attorney General Schneiderman then went and sued this school?  Why are they doing this? 

So, the idea that the Government's going to give you money and have a big warning about, beware, this may be a bad school for you to go to, you're going to end up with nothing but debt, is really we're abrogating our responsibility of why we're here today. 

We're not here in some vacuum.  We're here because a lot of schools, a number of schools, have taken advantage of easy money and people are taken advantage of. 

So, I just want to put that on the table. 

Ms. Buck:  Thank you.  Chris? 

Mr. Madaio:  So, definitely appreciate, Johnson, what you just said. 

So, first, of course I would say that, yes, institutions should be required to provide a warning if it's in danger of losing Title 4 funds. 

I think a key question is what is a warning versus what is a disclosure?  

So, and that's kind of a tricky thing to answer and not really defined anywhere, except for the fact that perhaps a warning needs to be bigger, it needs to be more obvious than a disclosure, which is going to be maybe more complicated. 

Perhaps a warning, as set by the Department, needs to be something specific and clear. 

So, it's definitely important that we are disclosing to students what could happen in the future, especially should there be some sort of sanction. 

So, I think a warning is certainly very important, and a warning as to a distillation of what a debt-to-earnings calculation might mean. 

Because the debt-to-earnings isn't something that's in the disclosure, and it's something that is a very complicated metric.  

It wouldn't say a lot.  So, I think a distillation of a warning is an important thing. Thank you.

Ms. Buck:  So, we have Sandy and then John.

Ms. Sarge:  Thank you.  So, this is Sandy.  So, I'm trying to think about what could it look like, right? 

So, things like a warning, you're right, if these metrics are what we deal with and somebody has the potential to lose Title 4 funding, then, yes, that would seem to be the next step is to have that type of a warning. 

And to Chris's point, a warning versus a disclosure as blinking lights or something, right?  That makes it point out. 

To David's point, however, as soon as  you put a warning out and make it very obvious, regardless of what the future result ends up being, i.e. they are able to improve, they are able to fix their rates, you've already lost your students, or your prospective students. 

So, one of the things I'm thinking about is nowadays, in general, there's lots of commentary that gets put out there. 

I was I'd like to use the word victim of that just in the last three days, where a commentary was put out with my name attached to it that leads to an impression, regardless of whether it was true, factual, or not factual, that was put out of me. 

And the impression was derogatory, as is many of these things.  How you put something out, yes, is it factual?  Sure.  But it leads to an impression. 

So, the question would be would we be able to contemplate, and I'm throwing this out, I have no idea how it would work, that more context would be able to be provided in a disclosure? 

So, there's a warning, this school may lose Title 4 eligibility.  My first question would be why?  Why would that happen? 

And then there would be a place where you could say here's the school's position on why this would occur, here's what the steps are that the school is trying to do because of this regulation. 

And to provide a little bit more context, maybe not in the disclosure but somewhere where the students get linked to. Because our disclosures right now end up soliciting more questions than they do answers in my opinion. 

So, I think that's something we need to think about, is how is it that we can present a fair, two-sided discussion on what's happening and maybe that would allow the student to have enough or more information to then contemplate their decisions. 

Thank you.

Ms. Buck:  Thank you.  So, we have John, Kelly, and Jessica.  John?

Mr. Kamin:  Thank you. 

First off, Mr. Martin, I would like to submit an example for the record on I think some of the nuance we're talking about when it comes to the differences between the warning and the implication of a warning, and just regular disclosure as it appears on a College Scorecard. Because I think it's helpful in determining what the differences are. 

I will say from the veteran side, there's a very strong perspective on this that was established from consensus from a couple years ago about the GI Bill comparison tool, which is a little bit of a smaller engine than College Scorecard naturally, but has what we refer to, which I think could be instructive, as caution flags. 

It's not saying it's a warning, it's just a caution, and it takes into account things such as if there is FDC action, if there is a large amount of complaints that came in, if it's under the Department of Education's site and cash  monitoring. 

It's important for the VA to disclose because they don't really have that many enforcement acts of their own. 

So, it's just letting their students know, if you're going to use your GI Bill here, caution, here's some things you need to be aware of. 

And to your point about graphic design, that's very important, to be able to see the difference between what would look like just regular numbers on a regular page and something that you should be made aware of in terms of, wait a minute, what? And then it just draws your eyes towards something.  

That's important.

I'd also say when it comes to the second part about disclosures versus sanctions, another (unintelligible) we're looking at is ITT Tech, where the VA, who was not necessarily complicit in what happened with that institution, still used this comparison tool to warn students. And to inform them that imminent action appears, like it may occur, that will affect your GI Bill benefits and your enrollment. And they got very little feedback from students. Generally, yes, veterans, traditional students, and (unintelligible) like to be informed about what is going on, but they don't like to be told what to do. 

They like a paternalistic (unintelligible) to say don't tell me what to do with my benefits, I earned this.  And they don't react well when you try to inform them of that. And I think that being the modality that we're in, sanctions appear that they are absolutely necessary because we did ultimately still, after, inform all the student veterans there. 

6000 veterans were stuck at that institution, that stayed because they didn't believe that they wanted to go through. 

And we had to deal with a lot of how we can support them after the fact.  So, just worth considering. 

Ms. Buck:  Okay.  Kelly?

Ms. Morrissey:  Kelly Morrissey. Having dealt with students who ended up at the community college after experiencing a school closure, I would definitely support institutions providing warnings to students about lower-performing programs. 

But in the context of providing meaningful and contextualized disclosures, I think that what is important for students to understand is what would happen to them in the event that they were enrolled in a program or school that closed, what teach-out arrangements exist, what is the transferability of any credit that they have earned at the school if they do have to enroll somewhere else? 

These are the things that are important to students.  They need to know what would happen to any debt that they incurred. Would they continue to be eligible for Title 4 aid at another school if their own school closed? 

Again, these are the types of questions that students would have in the eventuality that their school would close.

Ms. Buck:  Thank you.  And we have Jessica and then Jen Diamond. 

Ms. Barry:  So, I'd like the Department to think about with the 800 programs that are right now failing and are kind of waiting to see what's going to happen with this, I'd like us to think about the students. 

So, the students that are in these programs right now we've talked about several times. It is absolutely devastating to go through an abrupt school closure. 

So, talking back to my idea from this morning, I want to clarify a little bit. 

If the Department is at all considering giving these programs the opportunity to make changes to their programs or relaunch a similar program that could provide a better return on investments, I think that a warning is not appropriate. 

A disclosure's definitely appropriate, but if you're going to give them the chance to make changes, the warning should not be sent out. That should be a last-ditch effort if that program has tried to make changes, was not successful, and is now about to close.  

Thank you.

Ms. Buck:  So, we'll close out this item with the comment from Jen Diamond.

Ms. Diamond:  This is Jen Diamond. 

To the question, I think, yes, we do need warnings, not just disclosures.  I think it's time to be clear and direct with students. And it's not just about whether or not a school is going to lose its Title 4 funding, but it's about saying to students this program might not be what it seems. 

The students with whom I work are, you know, some of the folks that we've been talking about, who are coming from high schools without college counselors or who are non-traditional students. 

And I'm seeing it again that they're getting sold an American Dream that just isn't necessarily what's coming out of some of the programs. 

I'm seeing a lot of people here really concerned about schools' reputations and I think that's important, but I think we need to really think about the implications this has for student borrowers. 

I've seen it just absolutely destroy lives, people get credit for anything else, they can't go back to school at a quality program later in life, they can't get a car, they don't have access to home mortgages. 

And the Federal Government isn't deciding here whether a school's going to close or not.  They're deciding whether taxpayer dollars should be put into that program. 

Lots of schools do find ways to function without that type of funding and they just have to operate at lower costs. 

So, that's it.

Ms. Buck:  Thank you very much, and I appreciate people's ability to shorten and summarize, I appreciate that. 

Gregory, just a clarification, someone indicated there might be some similarities or some connection between 4 and 6, but I wasn't clear, did you want to continue with the order and go to 5 next? 

Or go to 6 and then 5?  Which would be better?

Mr. Martin:  I would love to go in the order the papers have been issued. 

I agree there could be some similarities between 4 and 6, but as has been pointed out, at least the way it currently stands, a warning is not the same thing as a disclosure. 

So, we do have things to discuss with disclosures outside the context of warning. 

I can see there could be some overlap, but I do believe they are separate and distinct, so let's go with 5 and then 6.

Ms. Buck:  Okay.

Mr. Martin:  And to the extent that anything in 6 is redundant to 4, I would ask people to keep that in mind when they make their comments. 

Ms. Buck:  Very good.  Yes?

Participant:  Can I call for a --

Ms. Buck:  Five-minute break?

Participant:  -- one function?

Ms. Buck:  Five-minute break, everyone.

Participant:  Thank you.

Ms. Buck:  Thank you.

(Whereupon, the above-entitled matter went off the record at unstated time and resumed at unstated time.)

So, if you could come back and sit down so we will get started and get a lot done before lunch, right?  So, Gregory, you want to talk us through Issue Paper 5?

Mr. Martin:  Sure, this is Greg, and we'll be discussing Issue Paper 5.  And I have up here with me Cynthia Hammond from FSA who will be assisting me with this Issue Paper. 

Okay, we're dealing with alternate earnings appeals for DE rates.  

Under the current regulations, if a GE program is failing or in the zone, the institution may file an alternate earnings appeal to request recalculation of the program's most recent DE rates. 

An alternate earnings appeal offers recourse to an institution that believes SSA earnings used to calculate DE rates do not accurately reflect actual earnings of program completers. 

This may be significant for programs that prepare students for employment in fields where gratuities often comprise a significant portion of income, even though IRS rules require that tip income generally be reported. 

Providing an alternate earnings appeal ensures that institutions facing a program's loss of eligibility have a more direct way to measure graduate earnings. 

Under the regulations, alternate appeals must be from the same calendar year for which earnings were obtained from SSA. Institutions may use either alternate earnings obtained from an institutional survey or from a state-sponsored data system. 

The alternate earnings of all students who had completed the program during the same cohort period used to calculate the final DE rates or a comparable cohort period must be included in the alternate earnings appeal. 

An institutional earnings survey must be conducted in accordance with the standards for conducting the Recent Graduate Employment and Earnings, or RGEES, Survey developed by NCES. Appeals submitted to the Secretary must include a certification signed by the institution's Chief Executive Officer attesting that the survey was conducted in accordance with NCES survey standards, and that the mean or median earnings used to recalculate the DE rates were accurately determined from survey results. Additionally, institutions must submit, along with any appeal, an examination-level Out-of-Station Engagement Report, prepared by an independent public accountant or independent Government auditor, that the survey was conducted in accordance with NCES standards. The outcome of the appeals is determined by the Secretary. 

Under current regulations, several institutions were able to submit materially complete appeals to the Secretary. 

However, the Department is aware that institutions did experience frustrations with the process. 

Among these were difficulty in engaging a CPA to do the examination-level Out-of-Station by the deadline date, the expense of such an engagement, confusion over the exact documentation to be submitted as part of the appeal, and most significantly, technical problems with using the RGEES survey tool developed by NCES for institutions to use in conducting the earnings surveys. 

Concern over RGEES standards relevant to the response rate and minimum number of respondents, the American Association of Cosmetology Schools, AACS, filed a lawsuit against the Department. 

The resulting Court order prohibited the Department from requiring AACS Members to obtain at least a 50 percent response rate from graduate surveys, or have a minimum number of respondents to those surveys. 

The Court further ordered that the Department reasonably extend the deadline for AACS member schools to file auction and earnings appeals. 

The combinations made by the Department in response to that Court order were extended to all institutions. 

The questions for consideration are should the alternate earnings appeal processes laid out in 668406 be retained or amended? 

Is the analysis the same if DE rates are calculated for all programs or just GE programs? 

Is the analysis the same if DE rates are used to establish eligibility, or could otherwise give rise to sanctions, or if they're just disclosures? 

Could the manner in which institutions conduct alternate earnings appeals be streamlined and made less burdensome while maintaining an acceptable standard of accuracy? 

What would the disposition of recalculated DE rates be? 

Would they replace the final DE rates calculated by the Secretary and Department systems or informational sites and on institutional disclosures? 

Or would they appear in addition to DE rates calculated by the Secretary with accompanying explanatory language? 

Ms. Buck:  So, we'll start with the first one. 

And when you respond, do respond to the question first, and then give your explanation. 

So, we have David, Daniel, and then Tony.  David?  David?  Okay, good.  I'll make you run. 

Mr. Silverman:  Thank you.  This earnings appeal, it's okay. 

When I first heard about it, I said I have to call my students or contact my students and ask them did you make more money that was reported?  I just found it kind of odd. 

But people did it, I hear it's successful, so I'm actually doing it right now. And it's a process; you need market research, you need lawyers, you need CPAs. 

It's probably going to cost my school, and we probably don't have as big a cohort as others, it's probably going to cost us somewhere between $25,000 and $50,000, just this one time. And obviously, there's better uses of that funds, but I think the current way that we collect the data for the income, a school like mine, where there's 1099s, there's many jobs, we probably have to do it every year. 

So, that $25,000, $50,000 could be every year. 

And we're a not-for-profit; that money could be could be going to salaries, it could be going to scholarships, it could be going to better places.  It's a waste of money. 

So, until they fix how we collect the income, and even the new tax laws. 

If these new tax laws go through, and people, the S corps and the LLCs, if they're taxed at 15 percent, everyone's going to have a C corp and S corp.  And actors and many professions, acupuncture, they're going to have S corps. 

I don't know if they're going to be able to properly track the income, and that's going to be a problem. 

Lastly, it's great that there's an appeal. I don't think there's enough appeals.  I talked about this earlier. 

There is the appeal in earnings, but as far as I know, there's no appeal on the overall decision. 

So, as it stands right now, if a school fails in two years, they flip the switch, the Title 4 funding's gone, the school's basically closed. 

The school's in the zone in four years, they flip the switch, the Title 4 funding is gone. 

I personally would want some kind of an appeal overall for the school with other metrics and be able to come up to the Department and say, hey, look at us, we have a low default rate, our students love us, look at our success rates, look at our people on Broadway. 

Obviously, the other schools could say, oh, look at these great acupuncturists and graphic designers and everything. 

So, in closing, you've got to give us a form before you just turn off the lights.  It's not fair. 

I want to come up there, I want to show you our great students.  Everyone wants to show their great students, so please consider that, and thank you.

Ms. Buck:  Okay, so the order we now have is Daniel, Anthony, Johnson, Neal, Jeff, Jordan, and Jennifer.  

So, Daniel next.

Mr. Elkins:  Yeah, we think that the appeal process needs to be amended for a couple reasons. 

There are clearly good institutions that are servicing veterans well that just get rolled up in the process of the current calculation as GE is calculated. 

And I think everyone around the table can at least agree in part that, perhaps, the current metrics for the calculation is not effective. 

If we can't agree to change that, I think that schools should have the ability to show if they're at 8.1, like the gentleman just said, to show that they are doing well. 

So, I know you want some examples of what to potentially include in that appeals process. 

And in talking with Pamela a few minutes ago, she brought up a great point to the gentleman who was around for HEA in 1969, that some of those points that he laid out, those are things that are already currently available that we can look at, that you guys have the information already to really paint a picture of is the school doing what it's supposed to do? 

Is it doing a good job? 

And if it's not, then I think that we can see that through those other numbers, but the way the systems are currently in place in the appeals process, I think it just is too much. 

It kills the schools that are doing a good job.  It also kills the schools that are doing a bad job, but there's no way to delineate between the two. 

Ms. Buck:  So, Anthony?

Mr. Mirando:  Thank you, Anthony.  I want to piggyback off of Daniel for a moment.  I think it's a great -- let me answer the question first. 

I do think the appeal process needs to be amended. 

As I've stated earlier, the problem lies at the beginning and so I really feel that we need to fix the front end before we worry about the back end. 

But if the front end cannot be fixed, then, of course, we need to come up with a better appeal process. 

I think there are a lot of good ideas out there, and so one of the questions I have for the Department is can we prepare some scenarios and provide that? 

I don't think we have the time today to go through a series of different metrics that might work for an appeal, but can we put something together and submit it?

Mr. Martin:  Certainly.  This is Greg. If you wanted to put something together, anything you have, you could put that together and submit it to Scott and then we would make it available.

Mr. Mirando:  Okay, perfect.  

I think we all can agree that from an accreditor's point of view, if we have bad standards and criteria that consistently are getting schools in trouble, and we keep saying, ah, who cares, we'll let that get corrected in the appeal process, one would say that's really not a very efficient way to run an Agency. 

And so I think, again, if gainful employment is something we're trying to wrap our hands around for an effective means, then we need to correct how we develop this, and then use the appeal for extraordinary situations, not to fix the problem. 

So, I do think it needs to be amended. Thank you.

Ms. Buck:  So, thank you.  

And we've added Pamela and Whitney to the list, but next up is Johnson, and I appreciate you responding to the question first.

Mr. Tyler:  I'm afraid I can't respond.  I don't really understand who's getting a lot of tips as part of their income. 

I'm just saying beauticians, I see that all the time with my clients.  I'm sorry? 

Participant:  Culinary.

Mr. Tyler:  Culinary.  Okay, so we have massage therapist, we have culinary arts cooks, we have beautician-related things. 

Is there any other industry?  Musicians possibly? 

Participant:  Nail techs, estheticians. 

Mr. Tyler:  I'm sorry, what technicians? 

Participant:  Nail technicians and estheticians, any of the public things. 

Ms. Buck:  So, just assume there are a number of people who do.

Mr. Tyler:  But my question is, I guess I'm going to is it a big segment of what the for-profit industry that we're --

(Simultaneous Speaking.) 

Mr. Tyler: -- into regulate industry is providing training on?

Ms. Sarge:  Can I respond just quickly and use an example which is across all film? Which I'm a little bit out of my league, but I can ask David. 

But I'll just say that film majors or arts majors rely on salaries from, and again, it goes to the issue of whether it's a recognized occupation. 

But we're talking about earnings here for this metric, and I will say that there are lots and lots of professions where the earnings straight out of school are not actually based on the recognize occupation. 

Not a reflection of the program, but they are reliant on tips. 

So, film would be a good example where they become waiters while they're working on jobs doing film projects, legitimate film projects, but to supplement their incomes, they're doing additional work that's under-reported. 

It could even be babysitting that they're doing, by the way.  It could be dog, it could be Rover and Wags and Uber. 

And there are lots of different examples where there might not be taxable income or reported taxable income, where they have sound professionals in the field, but they're not making a lot out of school. 

But this is the purpose of this metric, was to rely on earnings, not on the recognized occupation piece.

Ms. Buck:  So, assuming that there are a number of people to which this applies, what point would you want to make about that?

Mr. Tyler:  I'm going to have to think about it.

Ms. Buck:  Okay, thank you.  So, we'll go on then to Neal.

Mr. Heller:  I turned myself off, sorry.  Neal.  

I think, as Johnson was going to allude to, certainly, the one area that we can all agree on where gratuities or tips are a major part of the income, our people involved in the beauty-related fields, cosmetology, barbering, nails, skin-care, et cetera. 

With that being said, to answer your question, I don't think that the current appeals process can be retained as, again, the Judge was very clear about his concerns about the certain aspects of the appeals process. 

In particular, he spoke directly to the 50 percent threshold in terms of gathering information about graduates and trying to prove their income through their own testimony, rather than what it appears on their tax return or what comes out of Social Security. 

So, as far as the American Association of Cosmetology Schools are concerned, and cosmetology schools throughout the country, I think the Judge's order speaks directly to this problem in terms of retaining this appeals process. 

I don't believe it can be and we, of course, agree with the Judge. 

We believe that an alternative appeal that would be much easier and much less burdensome for our schools would be the BLS data that some have think-tank issue with today. 

And again, the BLS data, although not perfect, neither is the current appeals process or the income levels that are being reported currently. 

So, the BlS data, it takes an hourly wage and annualizes it.  It's regional; it can be broken down to very specific Regions of the country, which I also think is very important. And we, again, believe that that data is much more reflective of -- we still believe it's on the low end, quite frankly, but momentum reflective of what a cosmetology graduate, a barber graduate, et cetera can expect to earn in this field upon graduation and upon licensure? So, that would be an option that we would like to bring to the table and certainly put on the record as something that we would recommend as an alternative appeal for our graduates. 

Thank you.

Ms. Buck:  Thank you.  Jeff?

Mr. Arthur:  Yes, I would say the one major flaw with the appeals process is the required response rate. 

We attempted an appeal on four programs, all of which, by the way, would have passed under the current interest rates without have to appeal. 

But one of those programs had a cohort of 1200 students and I can tell you there are not enough resources over ability to get 600 students in one program to respond to a survey. 

So, we started down the road and we saw some premise, but there was, frankly, no way we were going to get to even 25 percent response rate. 

We had a small program that did pass, we didn't have to find to many students to accomplish that, so we've got that done. 

And then we had another program that actually, just for informational purposes, had a very dramatic reduction in the debt-to-earnings rate and upon appeal. 

And so that it is a testimony to the fact that the SSA wages are not always in every industry really reflective of the student's true earnings. 

So, I think we were able to prove that through that survey. 

But I can also tell you that I had my 25-year software development passenger, a 20-year financial aid technology person. 

And I can't tell you how confused and difficult it was for them to figure out how to use the appeals process instrument itself. 

And as Greg Martin was very, very clear throughout the process, there is no support.  Don't even ask me, please don't ask me.

(Laughter.)  

Mr. Arthur: And I can appreciate that.  If you don't know how to support it, you can't support it.  And that was another major issue with that instrument. 

But as my software development manager pointed out, if you were going to design a system that you effectively wanted nobody to be able to use or come out with favorable results, then this would be the one I would pick. 

Ms. Buck:  Jordan, and then we have quite a few people coming after that.  He's going to turn it on. 

Mr. Matsudaira:  Hi, Steve.

(Laughter.)   

Mr. Matsudaira: So, I wanted to make a few different comments.  So, the first is about what kind of evidence we have about the magnitude of under-reporting. 

And so I'd be curious for people like David in other institutions that have done their own kind of surveys, if you could comment on the magnitude of the differences that you're finding between what your graduates are reporting and what the kind of gainful earnings are suggesting. And I want to tie that into just a kind of general skepticism that I have about the magnitude of misreporting that's kind of driven by some studies that the IRS has done, some studies by academic economists about the reporting of income across different surveys, where what we tend to find is that in low-income populations, there tends to be over-reporting, or at least people suspect that there's over-reporting of income. 

Because often, for low-income people, depending on your family structure, the tax rate on income is actually negative because people qualify for tax credits like the earned-income tax credit and so on. 

So, I looked up just from the 2015 rates, I think the median cosmetology program has a median earnings of about $15,000. 

So, for a family with two kids, the tax rate for that median person is negative. They'd gain income in the form of the ITC if they reported more income. 

So, I'd just like to see a little bit of substantiation about the magnitude of the issue that we're talking about before kind of spending a lot of time trying to figure out how to solve for a problem that might not exist. 

So, I have no doubt that there might be misreporting but it might be quite different across people, depending on their income level. And for people at the bottom, the same kinds of problems might not exist for more successful workers, and for the more successful workers, we might not be as concerned that it's going to affect program's debt-to-earnings rates. That’s one point. 

Another is just the notion that's been raised about the supplemental earnings. 

And Jennifer's been talking about some people's earnings are coming from sources that aren't the occupation that they're being trained for. 

So, actors having income from other jobs on the side, and that sort of thing. 

I mean, I suppose that's true but just to be clear about that, the consequence of that is that we're over the earnings that are being used in gainful. 

Like if we accept that as the right basis, and I'm not sure that it is, but if we accept that as the right basis for the earnings concept that's in the rule, we're kind of over-counting earnings, and the rule's being too generous towards programs where that's true, rather than the opposite. 

Ms. Buck:  Let me just ask you to be as concise as you can because there are many people who want to speak before lunch if possible.

Mr. Matsudaira:  Forgive me. 

On the issue of the BLS, I don't know how much time to spend on this.  I'll kind of have it be a proportional to the seriousness with which we're thinking this through. 

But I just can't stress enough what an odd idea it would be to incorporate data from this survey for this purpose. 

You have one measure of earnings for an entire occupation, and the regulation would just be saying if you have a cosmetology program, then you can't have debt above Level X. 

It doesn't matter how successful your graduates are, it doesn't matter if your graduates are in 300 times more than the typical graduate, we're not going to let you charge any more than the maximum. 

It's just kind of putting a loan cap on an entire occupation-specific category of training programs. 

And it doesn't appreciate the notion that providing quality training, training that might get you higher wages in an industry, might be more costly. 

Whereas, the current debt-to-earnings structure reflects this idea there's a tradeoff. If your graduates earn more money, the regulation rightly, in my opinion, allows your debts to be higher and still qualify for aid. 

So, just back on the BLS thing briefly, the other thing about the BLS category is I wonder whether those of you who are suggesting that these data are more accurate measures of wages have ever read through the methodology of this report or how the survey is conducted? 

So, this is not a survey of individual-level wages, it's a survey of employers. 

Employers are asked to report how many of their workers in different occupational categories fall into each of a number of different buckets of either hourly wages or annual earnings. 

Bucket number one is under $19,240. There's no variation under that. 

The Department of Labor then uses a statistical model to kind of smooth over -- assuming some kind of distribution of wages to kind of smooth over all these categorical responses to form estimates of wages that are kind of aggregated up. 

So, the notion that these are more accurate than IRS data, which is individually-reported, earnings on a tax form, just I can't think of anybody who would accept that who is familiar with the details of this report. 

Ms. Buck:  So, we have Jen, Pamela, Whitney, Bob, Mark, Stephen, Sandy, Chris, Daniel, and Neal. 

We'll go as far as we can before lunch.  So, if you can be as concise as possible, that would be helpful. 

So, we'll start with Jen?

Ms. Diamond:  So, I think one of the fundamental issues here, and I don't think it's going to be resolved here, is the reliance on earnings as something that the institutions have very little transparency on. 

And so when we get the earnings data back, and again, I think we can all agree it's a very difficult situation, both for the Department and for us because I know that the Department is receiving it in aggregate data as well. 

I do think that there needs to be a mechanism other than an appeal to question the results, and this happened with us in a particular program, where we had two programs and we literally were like the data's wrong. 

We have our own surveys, we have our own information, the data is just wrong.  And we went to the Department and I was like, can you please just go back, you know, and check the data?  Because it's just wrong. 

And they're like, no, got to do an appeal.  So, we did, and of course, you guys have it, but the appeal shows that we were right, because we got the 51 percent. 

It was a lot of work, but we got to 51 percent, and it showed.  So, it's a lot of work to ask us to go through the appeal process on checking. 

Literally, it was clear that the data, there has to have been an error in the data. 

So, I would just say that other than just the appeal, there needs to be some sort of dialog where when an obvious error presents itself, you don't have to go through an appeal. So, I will mention that. 

I actually think this is an area where, again, SIPs come into play.

When there's a roll-up on SIPs, it actually makes it even more difficult when you have a roll-up of multiple programs into one SIP, and then there's a zone or a fail. 

It makes it more difficult to do an appeal because you're appealing across different programs.  So, that's another flag of the issue was more about SIPs but it does get impacted by appeals. 

And then I would say I'll reserve, I guess, for Question Number 2 software issues.  

I don't know where you want that presented but that's another issue that needs to be addressed. 

Participant:  You're welcome to address that whenever. 

Ms. Diamond:  Okay, so I will say, and I agree with what Jeff said about small versus large institutions, and we have both, so we have good experience in this. 

It's very, very hard to do the surveys at the bigger program level, it's extremely unwieldy.  And the alternative to using your survey instrument is mail, literally Post Office mail. 

And so for an online institution with students in 50 states, using the Post Office, although I'm sure the Post Office appreciates the business, it's not very practical. 

And the problem with the survey instrument is that it's not up to date on security data issues which Todd will probably appreciate. 

But there are all sorts of privacy issues attached to the survey instrument, and so very problematic for large institutions to use that particular survey instrument. 

So, there's a real hurdle to make a decision to appeal if you're a larger program or institution.  So, I wanted to flag that. 

And then finally, to Jordan's question about whether it's something that make sense to look to -- and this is not, by the way, an issue that's necessarily -- full disclosure, we don't really face a tips issue at most of our institutions or programs. 

So, I'm speaking a little bit on behalf of David here, rather than just having another tent up. 

But the question that seems to be on the table is whether earnings that aren't from the recognized occupation and whether they're relevant or not. 

And I would say this goes to a larger question of assessing quality based on short-term timeframes like three years. 

And there are examples, I asked him for one; I'll give you his example from his institution, not mine. 

A star of Orange is the New Black worked in their campus store for a number of years after graduation. 

That person has no earnings problem, that person obviously has done well based on their education at his institution. 

So, I think that you do need to contemplate if this is going to be the metric, earnings in the three years, whatever the earnings are, ought to be something that can be counted. 

Ms. Buck:  Okay, I propose we try to finish this item before lunch.  So, let's go as quickly as we can.  Pamela?  

Ms. Fowler:  My comments are more general in nature so I'll pass for right now.

Ms. Buck:  Oh, well, thank you. Whitney?

Ms. Barkley-Denney:  Sure.  So, I have a couple of questions and I'll go through them as quickly as I can. 

Laura or Kelly, somebody from the community colleges, I was wondering if you see the same problem in your numbers with tipped wages, and if you had anyone fail because of those tipped wages issues?

Participant:  We did not have any failing programs at the community college level.

Ms. Barkley-Denney:  And you engage in the same sort of training around particularly some of the tipped-wage industries that we talked about?  

You have programs for those? 

Participant:  We do.  Particularly at technical community colleges, we do have programs of that nature. 

Do you want to respond to that? 

Ms. Buck:  I don't want to get too much into a conversation.  Is it possible to make a comment?

Ms. Barkley-Denney:  Sure, sure, I just wanted to make sure I understood because it seems like we're casting this as a problem of the industry, whether it's nail tech or hair or an esthetician, when it actually seems not to be a problem for community colleges. 

And so I'm just wondering if that is a cost issue of the degree program rather than the tips issue? 

Okay, that's fine.  And so the next thing I wanted to say is we would be very opposed to using BLS data to track any of this. 

And I think that, actually, institutions who are training people really well should be as well. 

BLS data is an aggregate and being an aggregate, it hides two things.  One, it hides very low-performing programs, which I think we all agree are problematic, but it also hides very high-performing programs because those people aren't getting their individual due as borrowers and earners. 

So, I just wanted to make sure that we don't go towards a scheme of using BLS data. 

Ms. Buck:  Okay, Bob?

Mr. Jones:  Bob Jones.  I just want to make one clarifying or forward-looking point. 

I think we all probably ought to pay a little attention to the fact that this is not just about tips and alternatives. 

In fact, we're on the borderline here of looking at 40 to 50 percent of the American workforce becoming independent contractors. 

And we're having Committee meetings in almost every area, the Department of Labor and others, because it changes the whole way wages, benefits, protections -- everything else that we've built 30, 40 years ago don't work for the next 30, 40 years. 

So, we need to just be a little bit careful about how we classify both income and benefits in this process, and that it's going to impact us more down the road. 

Ms. Buck:  Mark McKenzie?

Mr. McKenzie:  Thank you, I'll try and be quick.  Amend was, I guess, the answer to the question first. 

And around the tip issue, acupuncturists in general don't really deal with that issue as a medical profession. 

However, I think the concept needs to be expanded to include those that choose to go into business, because that is clearly not accommodated for in the current earnings. 

And so I'm going to just basically agree with what Robert Jones was just saying. Thank you. 

Ms. Buck:  Stephen?

Mr. Chema:  Stephen Chema.  We agree that the regulation does need an effective appeals process, and that needs to be amended. 

I wanted to speak quickly to the issue of data systems initially, and I apologize to the Department for asking a question and putting you on the spot. 

But are you able to confirm if any appeals you have received have been based on a state data system?

Participant:  I don't have that number off the top of my head.  I know there have been several schools that have been working on it. 

I don't know if they've actually turned them in yet since the new deadline isn't until February. 

Mr. Chema:  Of course, yes.  So, it remains to be seen.  

I can only speak for my experience, working with schools that have asked me to help them with the system, that it's very difficult to identify a state that has a system with the right kind of data that it would be willing to share. My understanding, and Christina may have insights on this as well, but my understanding, for example, in the State of Virginia, is that their longitudinal student data system was not designed for this purpose, nor was any other states'. 

They're designed to help inform policymakers at the State level.  But in Virginia, the individual, personal, identifying information is scrubbed out. 

And therefore, it would be impossible for me to go to that system and say here are a list of our program completers in a cohort, please give me the mean or median earnings out of your database, to the extent you have them. 

It would be impossible for them to do that.  It can't connect the dots, and for various obvious privacy reasons, I think, they made that decision. 

A lot of other states probably fall into that category.  

So, if that's really a bridge to nowhere or at least not to very far, I think that brings us back to why it's important that the alternate-earnings survey be effective and that it present a real opportunity for schools to give an alternate earnings number, given that the numbers that the Department calculates are a black box to us. 

In particular, I think we ought to recognize that 51 percent, in terms of a response rate, and the Court in the Acts case recognizes this to some extent, there really hasn't been a justification put forth for how we arrived at 51 percent. 

My understanding is when I looked at back at the Regs, it's not even there.  I think this was something that we got later in the technical guidance. 

So, I think we need to think more carefully about how to arrive at a reasonable and effective response rate. 

And I would suggest, at least from my short experience trying to get appeals done, that there probably ought to be a rate that is sub 50.Thank you. 

Ms. Buck:  So, we still have a number of people listed here, so if you hear your point made so that you don't have to make it, you can lower your tent.  

Let's go to Sandy.

Ms. Sarge:  Thanks.  So, should the alternative appeals process be retained or amended? 

I think we need to amend it because, if for no other reason, we seem to be trying to solve, or the Department gets stuck in a situation of having to consider and then, therefore, solve for multiple conflicting perspectives. 

One is we want to know the information about individuals at a school and we want to get their earnings, yet, we want to keep everything private and we need to use medians. 

And there's privacy, privacy, privacy all over the place there. 

And then all of a sudden, we are asked to go out to our students anywhere from 16 to 36 months after they've left us, and ask them to be very specific about what they've earned. 

And so now as I mentioned on Day One, schools that talked to me said our students look at us like we're crazy, like I'm not going to tell you that.  

Well, the Department of Ed. requires it.  Okay, well, great, who are they going to share it with? 

They have a lot of -- I think whatever anybody's opinion is about the Government, there's a lot of concern about safety of information and who's going to share that data. So, we have conflicts, right?  We need specific information but we want to keep privacy. So, part of this whole process is that there's conflicting goals we're trying accomplish. 

The manner about using the tools that everybody's mentioned, I have not had to go through an appeal process with a client so I'm not familiar with the tools. 

However, R2T4 gives us perfect example as to how difficult it is at times for each school to come up with the right methodology to try to do things correctly. 

Year after year, it's a top-ten finding; we do multiple sessions at every training just to try and help us all figure out how to do it right. 

So, my suggestion on any of this, wherever we end up, is just give us the tool you want us to use so that we're all consistently using the same platform. 

And then that way, hopefully, we'd either all be consistently flawed or consistently right, but we'd have some sort of -- we wouldn't have a whole bunch of different people trying to come up with the same thing. 

I think, overall, as an industry, that might reduce cost and burden, is if you give us what you want us to do and we do it. 

Thank you.

Ms. Buck:  So, we have Chris Gannon, Daniel, Neal, and then Jessica.  Chris?

Mr. Gannon:  Chris Gannon giving the perspective on the tip issue.  It's my understanding that it's Federal law to report tips as earnings and not doing so is tax evasion. And I think it's insulting to assume that students are violating Federal law not reporting their taxes. 

And I think especially students that are just starting out in their careers, not reporting tips and being at risk of being charged with tax evasion, I think it's kind of ridiculous. 

And I personally don't get any tips with the job that I'm doing right now, unfortunately, but I have friends that do and I know that they report them. 

Ms. Buck:  Thank you.  Daniel?

Mr. Elkins:  So, I'd like to introduce to the record the five principles of patrolling, get some military doctrine into the discussion. The fifth, I think, most important principle of patrolling is common sense.  So, I think just a caveat and make it simple, I agree with most of the discussion around the table. 

If the institution is being judged on the GE metrics, and then in the appeal it's off of the GE metrics, there seems to be no way for exceptions to the rule. 

It seems very, very black and white, very, very off or on. 

Regardless of what additional measures we use to evaluate a school, there has to be a way for us to allow an opportunity for something we haven't thought about around the table to be included in an appeals process. 

GE on its own, we have not thought of anything. 

There has to be an exception and we can't figure out what all the carve-outs are going to be, whether it be for business, entrepreneurship, schools that have high degree costs but offer long-term placements that are good. 

We just can't think of all those things right now.  So, to not have something like that in the appeals process does not pass the common sense test to me. 

Ms. Buck:  So, we have Neal, Jessica, and Jeff, and then we will stop for lunch. 

Mr. Heller:  Okay, first of all, I have to get this out, I'm sorry. 

So, we want to ask whether or not this is an issue at the community college level. 

First of all, 90 percent of the vocational programs at the community college level did not have a large enough cohort to even be considered for gainful employment.  That's number one. 

Number two, the thing that drives me crazy, the cost of our program at our school or a community college is exactly the same. 

The only difference is their tuition is subsidized by the state in which they operate in, ours isn't. 

So, I'll give you another example, which maybe some of our more traditional colleges and universities would easily comprehend.  

My son graduated from the University of Miami.  I spent or he spent or we spent $200,000 on his finance degree. 

Had he gone to the University of Florida, the hated Gators, it would have cost $30,000. 

What do we do with that?  It's the same exact example when you hit us with why do you charge so much when the community college can do it for what they do it for. 

Why does the University of Miami charge so much?  They are a private institution that does not receive state subsidies.  I think we should put that argument to bed once and for all. 

More importantly, as far as data concerning under-reported or unreported income for those people in the cosmetology or beauty-related industries, the Department already has clear and uncontroverted evidence from those states, schools that operate in those states, that actually have employment data and compensation data. 

State of Oregon, State of Washington, and others.  Unfortunately, State of Florida doesn't keep that data so I can't go to it. 

But I know for a fact, and I only wish that she was here today, school in Oregon, their data from SSA was in three out of the five cases less than 50 percent of what the State of Oregon had for the same exact people in the same exact cohort. 

So, whether you want to think that everybody reports their income, I can't change a culture. 

I can't change the way people, you know, the families that they've been brought up in, the way they look at a tax return, or not look at a tax return, that's not my job. 

But I can only tell you that it is a fact that there is under-reported income and unreported income. 

Whether it's tips from waiters and waitresses, the way the IRS actually impugns a percentage, if you work in the service industry and you file your tax return, the IRS adds 20 percent. 

Why not do the same thing here, at very least for those that worked in different types of service industries?  That would be another alternative appeal. 

And as far as BLS data is concerned, it's the United States Government's data.  

So, Jordan, I understand you want to question how it is derived at, but quite frankly, what else can we depend on more than the U.S. Government? 

And we're not saying it's perfect. It's far from perfect.  But so is the SSA data and so is some of the other data that we're trying to collect. 

So, we're not asking for BLS to be used as a way to cap debt, nobody ever mentioned that.  

We're just asking it for it to be used as an alternative appeal because trying to gather 50 percent of your graduates to tell you what they really make when they're never going to tell you that is extremely costly, burdensome, and unrealistic for most of us. 

Thank you. 

Ms. Buck:  We're going to go in the order that we have.  We have you in the queue. So, Jessica and then Jeff. 

Ms. Barry:  Okay, I'm just going to make a really quick point. 

There's just one point about the appeals process that hasn't been addressed that affects the colleges that I represent.  And that's the non-biased response calculation. 

Many of the colleges that I represent are small and some of our programs skew very far female or very far male, and so we're being penalized unfairly because we're not able to get a balanced response based on gender. 

So, I just want to put that out there very quickly. 

Ms. Buck:  Jeff?

Mr. Arthur:  Yes, I'll just add clarity to the figure Neal put out there. There's 29,585 certificate programs that were considered GE programs, and of those, 26,234 didn't meet the 30-student threshold. Northern Virginia Community College, one of the largest community colleges in the country, if you look at College Navigator, you can find about six certificate programs that had more than 30 graduates. 

And of course, those are all at D.C. wages, so I'm sure they all did fine. 

Ms. Buck:  Whitney then Laura.

Ms. Barkley-Denney:  Thank you.  I just wanted to address a couple of things. 

One, I think that we've all agreed here that we address issues and not people. 

And I think that in my opinion, I don't know about Chris, but I felt very much addressed in Neal's comments and I wanted to be able to respond to them. 

First, I understand that the industry, sorry, not the industry, the proprietary schools feel that the subsidies are what makes up the difference. 

But however you look at it, those subsidies or lack thereof therefore become debt. And if what we are talking about is whether or not someone's wages can support the debt of a program, then that's all I was pointing out.

Community colleges have less debt, possibly it's because their subsidized, maybe it's another issue. 

I don't know, I'm not an expert to make an assessment on that.  But what I do know is that for whatever reason, there is more debt coming out of certain schools. 

And if we're going to address this as a debt-to-earnings issue, then we have to understand the expense of a program. 

Whether it's the fault of the U.S. Government, whether it's the fault of the State Government, or whether it's the fault of the institution, is part of that calculation. 

So, that's all I wanted to say, and I would ask that everyone keep with those protocols that we discussed, which are, of course, to address issues and not people directly. 

Thank you. 

Ms. Buck:  Let's just have one more comment before lunch, and that is Laura, and then we will break for lunch. 

If other people have comments, we can start up again later. 

 Participant:  Yes, I think hanger is became a factor here.  So, Laura, take us home.

Ms. Metune:  I'll try not to be hangry.  I did have just a couple of quick points. 

First, I was going to give a 20-minute lecture on why there's a public subsidy for public education and the values surrounding social mobility, but I won't do that.

Ms. Buck:  Thank you.

Ms. Metune:  Instead, I'll say with that public subsidy comes public oversight and public accountability that our institutions have to our state-level regulators and legislators. And finally, I just want to say I looked up our state subsidy for a certain program which will remain nameless, for a one-year certificate program. 

Including tuition, the cost was $7,900.  I looked up that similar certificate program at an institution that was not a public institution and the tuition cost alone was $14,000. 

So, I don't think that comparison that it's the same price when you factor in the public subsidy is true across all fields. 

Okay.  So, I'll propose that we come back at 1:30 p.m.  Is that okay? 

(Whereupon, the above-entitled matter went off the record at unstated time.)

Ms. Buck:  Okay, welcome back everyone, I hope you had a good and restful lunch.  Before we get started, John has a concern he wanted to share.

Mr. Kamin:  Yes.  I just wanted to, I felt a little bit uncomfortable as we wrapped up leading to 1, so I just wanted to mention a few things.

Especially, I serve in the psychological operations unit in the Army Reserves, and one of the things that we're taught is that in a group environment there is nothing more contagious and nothing more effective than anger and frustration.

And that in turn will have the symbiotic effect on the nature of your conversation with the group.  So there's enough to ratchet up tension and to build disagreement and discord.  All it takes is even the appearance of frustration and visible displays of aggression that can lead to really inflaming disagreement.

So I just ask that we all kind of hold each other accountable towards putting the best foot forward.  It's easy to talk in a Military crowd because you just say Military bearing and people get it.

For us it's just organizational protocols.  If we could just keep each other and not have Ed be the tough guys on this.  So, if we could just keep that in mind as we continue these negotiations I think we'd all be better served.  Thank you.

Ms. Buck:  Well thank you for that.  And as mediators, we all try to learn to separate the person from the issue and to respect the people and the process as we go forward.

And it's hard to hear things that you don't agree with, but we all know that we've got many different opinions in the room, and that's a good thing.

So, my understand is that we've covered Item 1 under Issue Paper 5, and we're now ready for the second one, so, Gregory, do you want to introduce that?

Mr. Martin:  Sure.  This is Greg for the record.

Ms. Buck:  Are we doing, are we finished --

Mr. Martin:  I think we did, yes, I think we finished --

Ms. Buck:  Okay.

Mr. Martin:  I think we finished this.

Ms. Buck:  Great.  Then we have finished them all.  So the Department of Ed has asked -- Jennifer, did you want to say something?  Or was Christina first?

(Off microphone comment)

Ms. Buck:  Okay, Christina.

Ms. Whitfield:  I just want to say a little bit --

(Off microphone comment)

Ms. Miller:  Push again.

Ms. Whitfield:  I always turn it off instead of on.  This is Christina Whitfield, I wanted to say a little bit about data systems because that came up right before lunch yesterday, earlier today.

And I wanted to say that, so, the vast majority of states have the capacity to match educational records and employment insurance outcomes, and they're existing now.

The structure of those data matches and which sectors of higher educational institutions are included varies by state.  But I don't think it's fair to say that it's impossible to respond to an appeal with those data systems.  It is possible, but it depends on your situation in your particular state.

I also wanted to say, to voice some support for some of the things that Jordan has been saying about administrative data being a gold standard and that we're definitely going to get more accurate results using social security administration data then we would from projections coming from other parts of the government.  Thanks.

Ms. Buck:  Thank you.  And Jennifer.

Ms. Blum:  Yes, actually, and I hate to delay things, but I don't think we did the last question.

Mr. Martin:  Yes, the last question, I believe you're correct, we still need to address.

Ms. Blum:  Okay.  So can I go ahead and give a point of view or did you want to read it or --

Mr. Martin:  Yes, I'll just briefly review that last.  It was the third question I think we need to talk a little bit about.  And please try to be brief because we really do need to move on.

What would the disposition of recalculated DE rates be, would they replace the final DE rates calculated by the Secretary in the Department systems and informational sites and on institutional disclosures or would they appear in addition to DE rates calculated by the Secretary, with accompanying explanatory language?

Ms. Blum:  I'll be really brief.  I think if an institution successfully appeals based on the data, especially the burdens of the data in the appeal system that you've set forward, I think that that new rate becomes the rate.  Replaces, to be clear.

Ms. Buck:  Thank you.  Sandy.

Ms. Sarge:  I said, I wrote replace, why add to the confusion.

Ms. Buck:  And, Christina, I think you had already spoken, is that right?

And did anyone else want to comment?  Jennifer.

Ms. Diamond:  I just had a question.  In that case would there be, are you imagining a way to reestablish a rate, you know, to go back to a certain rate if conditions changed in the future?

Ms. Blum:  I'm not sure.

Ms. Diamond:  If the rate is replaced, is there a method to go back to the original rate?

Ms. Blum:  Why would you go back to the, I mean, so I guess, a couple of things, just so everybody.  So, when you do appeal, so when you register an appeal, and actually, it would be helpful if the Department reminds me about this, the timing of the appeal relative to draft and disclosed rates.

Ms. Hamad:  Under the current regulations you would, you could start an appeal any time from when you get your draft rates to letting us know you intend to do it.  Tend is after the final rates, because we acknowledge that this process takes a fair amount of time.

But I think what she's talking about is after the Department has accepted the appeal, then it would be replaced.

Ms. Blum:  Right.  So I guess I'm asking, sorry, Cynthia, but this is a good question, I mean, I think there's a part, I'm not exactly answering your question but I'm trying to get to it.

So there is a scenario where your original rate is disclosed to the public pending appeal.  And I think there's an asterisks or something saying it's under appeal or how does that work currently, I just can't remember.

Ms. Hamad:  Yes.

Ms. Buck:  And please give your name for the record.

Ms. Hamad:  I'm sorry, Cynthia Hamad (phonetic.)  The current spreadsheet that is on our data center has a column about whether or not it's under appeal, and there's an A in that column if a particular program is under appeal.  And also we ask, as part of the disclosures, whether or not the rate is under appeal, and that would determine whether or not the warnings are pre-populated on the disclosures.

Ms. Blum:  But in addition to the A, sorry, but in addition to the A is the rate that's being appealed, the results that are being appeal listed?

Ms. Hamad:  Yes.

Ms. Blum:  Okay.  So, I just wanted to make sure before because I couldn't remember, to be honest with you.

So the point being, the original one, there is a public component even when you're appealing the rate, so it's known that you're in, for example, in the zone.  There is an asterisks that says you're appealing.

I think the question on the table is, at the point and time when the appeal is successful, and in effect there's a new rate, right, a new rate result, I think the question on the table is whether one would replace the other.  And I'm suggesting that, yes, it should replace the other because, A, I agree with Sandy that it's confusing, and B, that is the rate.

Because we've established that the metric was in effect and correct, because we have established, through the survey process, that the actual data, the actual earnings is different then what the Department, for whatever reasons, and again, I will say it's not the Department really, it's the SSA data.  And the transparency around, this is very, very difficult.

So, I think that the benefit in that case, when there's a demonstrated actual appeal that's successful, that it ought to be replaced.

Keeping in mind to your point too, next year there is a whole another rate.  So there will be, so it gets replaced every year anyway.

Ms. Diamond:  Thank you for clarifying it.

Ms. Buck:  Jeff.

Mr. Arthur:  But also, there is another rate.  But keep in mind these are rolling to your cohorts.

Ms. Blum:  Right.

Mr. Arthur:  So half of the students, theoretically half of the students, it could be half or close to it, are going to be probably surveyed again for their next tax years wages.

And one thing I would just throw out that perhaps if you've already, because, now, it seems a little awkward to go back to those people, okay, we asked you last year now tell us what this years was.

Just one quick thought is, maybe that in the survey instrument if we've collected the income information on, for like, let's say 2015, and now that same students in the 2016 tax year cohort, why not be allowed to have the choice of either re-surveying them or use the 2015 results.

One thought, just to streamline it so that the next year you go back, you're only having to hit one year's worth of graduates.  That would really help make the process more efficient.

And it's almost likely that they're wages wouldn't have gone down from one year to the next.

Ms. Buck:  Thank you.  Daniel.

Participant:  That's a good idea.

Mr. Elkins:  This is a question for the Department.  Two things.

One, is there a current timeline or expectation that you have for the appeal process?

We anticipate that lots of schools would appeal and we don't want to see a bottleneck, so we'd love to see some sort of overarching kind of goal, how long it should take one if institutions aren't servicing people correctly then we need to execute on that, and then if there is a reasonable explanation for why the rates are incorrect and schools should know that as well.  So that would be the first question.

And then the second question is, is it possible for a school currently, that thinks that the rate that you guys might come to is incorrect to kind of submit prior to?

I just think there would be some stigma associated with a school that is potentially been put on notice, then kind of once that's out, even if they do go through the appeals process and are shown to be correct, that that has, could potentially damage the institution.

Ms. Buck:  So, do you want to respond to those questions?

Ms. Hamad:  So, this is Cynthia, in response to the first question, the appeals are now due February 1st, which is a Thursday, and we will start processing them after that time.  How long it will take us to do that will also depend on how many we get in.  So I don't have an exact timeline for you.

As far as your second question, I that's something, I think, for this table to discuss.  It's a regulatory issue right now.  The current regs say that we put out the final rates and then the appeal comes after that.  So whether or not to take your suggestion would be something for the table.

Mr. Elkins:  Okay, can I make a motion?

(Off microphone comment)

Mr. Elkins:  Can I motion the table to have that discussion?

Ms. Buck:  Gregory, do you have some comments about that in terms of time?

Mr. Martin:  Well, I mean, we certainly have the issue and we will take it back.  I mean, I think in terms of it, I don't know if we have time to debate the merits of whether we should, I guess the issue would be, should we allow schools to do that, would we allow schools to appeal prior to issuance of the final rates, is that correct?

We can do a temperature check if you want, but I don't know that we have time, given how much we have to do, to debate it.

Ms. Buck:  So why don't you ask the question again and we'll have a temperature check.

Mr. Martin:  I think the question would be, would we permit schools to appeal prior to public release of the rates, to begin appealing their rates?

And then I guess what you're suggesting would be, we wouldn't publish the rate at all until such time as the appeal is processed?

Mr. Elkins:  I mean, essentially, it's a semantical shift where you would be providing alternative documentation.  And if reviewed, when the rates come out, they would pass under their alternative measures through --

Mr. Martin:  Oh, I see what you're saying.  So before the rate is even calculated, we would use the alternate appeal data to calculate the initial rate, okay.

So I guess that's the question then, would we allow the use of alternate appeal data to calculate the final rate --

Ms. Buck:  So, do you want --

Mr. Martin:  -- rather than correct it after having received appeal data.

Ms. Buck:  So, do you want to have a temperature check on that?

Mr. Martin:  Certainly, I'll obtain that.

Ms. Buck:  Thumbs up, thumbs down, thumbs sideways?

Ms. Miller:  Jen, do you have better language for us?

Ms. Blum:  No.

(Laughter)

Ms. Buck:  Did you have a question?

Mr. Mirando:  I have a question.

Ms. Buck:  Okay.

Mr. Mirando:  Yes, Tony.  So what you're asking is, you're suggesting, or what you're suggesting, is that offer another pathway for schools to provide information prior to the Department coming out with their final numbers, if in their draft numbers they see some kind of a flaw, so if they have additional information that would help you get to a more appropriate correct answer, they can provide it, is that what the question is?

Mr. Elkins:  Yes.  Like essentially, if I'm a school in a state that has a workforce program or a state laborer that has more accurate information on this then the SSA, and I also know that I'm in an industry where I'm at risk for failing this, if before the rulings come out I can compile the data and submit them to ED for consideration, before they make the rules, and then when the rules come out, the only thing it would like would be a pass under the state, at ED's discretion, passing the gainful employment under the state's metrics.  So that way instead of saying we had to wait until this came out to do this.

Mr. Martin:  Okay, essentially what I am hearing is that some people believe that there's a pejorative effect involved with having your rate actually published, even if subsequent to that there is an appeal and that rate would be changed.

So what I'm hearing voiced is that would be an opportunity for a school to, and I don't even think it would be an appeal, it would be provide the alternative data on which the calculation itself would be done.  If that calculation yielded a, I guess a better result than what SSA said it would yield.  So I guess that's what's on the table then.  For a temperature, check not a --

Ms. Buck:  Is everybody clear with what is being asked?  Okay, so let's have the temperature check.  Thumbs up, thumbs down, thumbs sideways?

I see some up, I see some sideways, one down.  So that gives you an idea, Gregory, right?

So, are there other comments that need to be made?  So I think Chris is next.

Mr. Madaio:  Chris Madaio.  So, I guess one point and a little concern, I was like, eh, maybe going less and less, getting colder and colder.

I guess first, I'm not sure how much of a pejorative effect it would have if a school wants it, it's going to appeal, it doesn't have to post a warning.  So the only place, right, I'm correct?

And that if a school is going to appeal after the numbers come out, it doesn't have to post the warning, correct?

Mr. Martin:  That's correct.

Mr. Madaio:  Right.  So, the only place that I guess it would be published is in this massive chart, on the Department's website.

So I guess a question, if that's something that's really going to effect the decision making of students going to the school?  So that's kind of one.

And then second, I just wouldn't want it to slow down the creation of the metric.  So if the effect is that the Department is waiting or it keeps getting in additional new information, and then from the metric is going to be published on X date, instead now gets pushed back months and months, I think that would not be something I would support.

So I supposed if there was some deadline by which a school, if they wanted to submit information, I don't think I'd be opposed to that, but I think that's something, there should be a very strict deadline after which it wouldn't be considered until the school wants to have an appeal, and then of course they could do that.

Ms. Buck:  So I think we have Jordan, then Jennifer, then Sandy.  So, Jordan.

Mr. Matsudaira:  I'll try to talk from here.  So, I also don't like the idea of the kind of preemptive kind of thing but had an idea along these lines that maybe Mike kind of constitutes some simplification.

And that's, you know, if we kind of agreed on some kind of appeals process that we thought was high quality and kind of provided a good window into a programs earnings, then maybe some version of this would be just to, you know, if through that process you establish that a programs earnings are systematically underestimated through SSA earnings, then establish some sort of multiple, like, the survey shows your earnings are usually 20 percent higher than what's reflected in SSA and we just apply that multiple to your earnings rate going forward for X numbers of years, just so we don't force programs to redo the survey kind of every year.

And by the same token, if we kind of establish that your earnings are accurately measured or whatever the case might be, then you can appeal the process for the next X number of years.  Or something like that.

And that might kind of achieve some simplification of this kind of process, reduce some of the burden on all sides of this kind of issue.

I do think this kind puts a lot of pressure on just getting the kind of appeals process correct.  And I don't have great ideas on that front, but I did want to ask just one question, and that's whether the alternative, having the alternative appeals process run kind of in a close to automated way, like by the Department was something that was feasible, so there is some kind of contact information that's provided to the Department.

The Department, you know, we here agree on some kind of survey form that's appropriate for asking people about their earnings and so on, and then the Department automatic, you know, sends out something that invites people to record their earnings on some kind of site and it kind of automates a lot of the process in a way that perhaps saves people time.  I wonder whether there is some solution along those lines might be feasible?

Ms. Buck:  So, that's a proposal.  Sandy.

Ms. Sarge:  Oh, it was Jen.

Ms. Buck:  Oh, Jen, I'm sorry.

Ms. Blum:  Thanks.  So, actually just to address a couple of things first.

On Jordan's suggestion, I was actually, I didn't say this earlier, I was actually on the work, there was a working group on the survey after the last regs came out and we were a part of the, there was a sort of informal working group that the Department called to meet to discuss some of this.

And the issue of who would send out the survey, actually I believe, if I remember correctly, looking at John, because I think he was part of it too, I believe that issue was discussed.  And students, and I actually welcome the views of the folks who have done more on this than I have, but students will actually be more likely to respond if they're around students, are asking, I mean, if they're own schools are asking, then if the Department of Ed is asking about their earnings.

So, I don't think you're going to get a response rate out of students with the Department of Ed asking, what did you really make.  So I just want to sort of address that.

And then actually I was anticipating, which is why I put my card up, that somebody might mention two things.  One, this isn't totally just aligned with the warnings issue because when you're in zone you're allowed to appeal and you don't have to actually do a warning in year one of a zone.  And the rate is public.

So the warnings is an issue, I agree with you, but the rates are public.  And so I am intrigued by this idea of addressing this issue before the rates become public, if there is a strong belief that the rates are not correct.

And so therefore my proposal, or my thought process in terms of, because I was also anticipating that somebody would say, and I was thinking it myself, God Lord, this is going to delay the release of rates even further.  And even in the interest of the schools themselves, who are doing a lot of work, it's actually not to our advantage to have the rates string out like way past the cohort timeframes because of, you know, because of the amount of work of the Department.

But there is, I wanted everybody to remember, there is, we do already receive the completer information.  And so there is a period of time, it's sort like the draft appeal.

You get to draft one half of your information a little bit.  It's even before the draft rate, because you do get your completer information to sort of validate during the process.

And I think there's a window of time that wouldn't delay the timing of the rate being released, Chris, because I think that there is already windows of time being used to confirm the completer information.  And so I think that you could run parallel.

You know, if an institution wanted to submit alternative, I think there is timing that wouldn't delay the rate.

Ms. Buck:  So, thank you.  Sandy.

Ms. Sarge:  This is Sandy.  Chris, I would agree with you, it shouldn't be open-ended by any stretch of the imagination.  In fact, I think that there would have to be the same deadlines or there would need to be deadlines in association with it.

I really like Jeff's idea where if you receive data from a student and that student ends up being in the cohort the next year because of the way of the rolling, that we just use that same data so we're not invading that persons, you know, we're going back to them every year.

But I definitely would say that if somebody is, if you have a choice between the two ways to get your data, then you still have to meet the same deadlines.  I would want everybody to have to stick with that.

Ms. Buck:  Thank you.  So, it looks like that may conclude the comments for Item 3.

Now, the Department of Ed has explained that rather than going next to 6 there is some information they will be needing to bring tomorrow about 6, and so they are proposing instead that we go to 7 next.  So I wondering, Gregory, if you want to introduce Issue Paper 7 to us?

Mr. Elkins:  Excuse me, can I just ask a quick question?  What type of information the Department expects to bring just so we get a little bit of a heads up?

Mr. Martin:  Okay, it's nothing secretive, this is Greg.  It's mostly a procedural thing.

There isn't, I don't want to explain it today, there's an additional aspect of disclosures that we need to discuss tomorrow.  We're going to be looking at disclosures sort of holistically, and that includes those disclosures relative to borrower defense.

So, I'll introduce that tomorrow.  And I'll be honest with you, not only does it give us time, it gives me time to digest that and to prepare for that tomorrow.

So it's nothing other than just my own need to familiarize myself with what I need to do tomorrow a little more, that's really all I'm asking for.  I will explain it to you fully tomorrow morning.

Okay, we'll be looking at Issue Number 7.  And that is reporting requirements.

So we know that currently institutions are required to report a specific information for each student who receive Title IV funds during an award year.  And there is information about student's enrollment in the GE program, the amounts of private or institutional loans and other financing received by the student, as well as the amount that was assessed for the student for tuition fees and book supplies.

This information, as well as data contained in NSLDS, is used to determine median loan debt from which annual loan repayment, which is an element in DE rates, is calculated.

Initially institutions were required to report information from the 2008 and '09 award year through '13, '14 award year.  Therefore, reporting is annual, thereafter rather, reporting is annual by October 1 for the previous year.

While going forward, the administrative burden on institutions to report is far less than it was initially, it is not inconsequential.  Determining median loan debt administratively, could potentially reduce the need for institutional reporting altogether, or at least significantly reduce the amount of information institutions are required to report.

Since 2014, institutions have been required to report program level data to NSLDS.  As a result, the department already possesses much of what is needed to determine median debt for GE programs.

Two exceptions to that are, tuition fees, books and supplies and institutional and private debt.

Institutions have only been required to report program level debt to NSLDS since 2014.  Because of that, administrative calculation of median debt, using the debt of students who completed a program during a specified cohort period, would delay the publication of further DE rates.

For, in the case of some programs, a number of years, while information necessary to calculate those rates became available in NSLDS.

In evaluating whether median loan debt should be determined administratively, there is several considerations.  I'm not going to read through all of these questions.

I'll read through each question as we address it.  I would ask you all to keep in mind that we have several things we need to address here, so as we go through the questions, please keep your responses as conscious as possible.

And I'm going to ask that the facilitators put a hard time limit on each one of these so that we, I want to get through them all.  If we get through them all and we have time, I don't have any problem with going back and addressing others.

But I think what tends to happen is just human nature, is we start with the first one and people get hung-up on the first one, we spend a long time on the first one then we have ten minutes to address all the other ones and I don't want to go there.  So I think all of these are important and I want to see all them addressed by the committee.

So, we'll start with, should the current reporting protocol requiring institutions to report to the department specific student level information for each program be retained, or should median loan debt be calculated administratively using data already on hand from program level NSLDS reporting?

Ms. Buck:  Sandy.

Ms. Sarge:  I would say if you've got the data let's use it since that way we're getting it all back consistently.  But I do have one question.

We all had a lot of conversation over the last few days on tuition fees, books and supplies and things like that, I would just like to ask the group, how do you feel about students that incur additional tuition fees, tuition costs or institutional costs because they didn't perform well?

So the student that gets charged to repeat a class, or whatever, has remedial classes involved in things like that, should it be published rates if we were to go down that or should it be actual rates that the student incurs because they failed a class or they took a leave of absence and come back and stuff like that?

Ms. Buck:  Jeff, I think you're next.

Mr. Arthur:  Yes.  And I think we've already described a lot of the issues and burdens with reporting, and certainly don't want to rehash all that here, but in reference to the, is it going to be much easier now going forward since you are only going, we have the big tranche of seven years that we had to deal with and get through and that was burdensome, the one year at a time.

But, I can tell you, due to the complexity and the gravity and the implications of the data that we have submitted, I feel like we are, and we do continue to review and fine-tune that historical data, as you've told us to do, Cynthia, and said, yes hey, the first thing the Department wants is accurate data.

So, in that vein, I feel like we've got to take as much time as we possibly can afford, constantly, to continue to go back and review and rethink and figure out, is the data correct.  And so it's going to continue to be a burden for some time.

Ms. Buck:  Other comments on Item 1?  Kelly.

Ms. Morrissey:  Kelly Morrissey.  I would be very supportive of aligning gainful employment reporting with other reporting that is already taking place.  Especially in the case where data elements are already by reporting to NSLDS.

And some of the elements that are currently absent I think could certainly be examined so that we could also report those through NSLDS reporting on, and probably result in some more meaningful data metrics being reported.

For example, as I described earlier, our efforts to collect accurate tuition and fee amounts, on a programmatic level, are probably less than perfect because we assess tuition and fees on the course level, not the program level.

So I think that there could be some ways that we could address the reporting to show, based on enrollment pattern, which is in NSLDS, whether a student is full-time, three-quarter time, half time, et cetera, we could use some mapping of their enrollment status to the publish, tuition and fees for the program that they're in.  And I think that would actually get us closer in a more accurate depiction, of what their costs related to their program level are.

Ms. Buck:  Marc.

Mr. Jerome:  I'm basically echoing Kelly's comment.  To the extent the Department can simplify the number of databases available, I believe it's going to have a major impact, both on the institutions, on the Department and on the public's ability to gather information.

We saw this especially with all the different databases associated with all the different GE proposals, and then later attempts to use the same data in other places, it just becomes too confusing for everyone to have multiple databases.  And to the extent we can do NSLDS, the score card and have the data more centralized, I think would help all of us.

Ms. Buck:  Andrew.

Mr. Hammontree:  This is Andrew Hammontree and I would be very strongly in support of the Department administratively calculating this information, using information that you already have.  A lot of the information that we report for enrollment, for SULA, is already in the system, and if you could just use that.

Because a lot of what we're reporting from GE is duplicative, it's the same information that we're already reporting anyway.  So if we could do it just once instead of twice that would alleviate a lot of the administrative burden for the financial aid administrators.  Thank you.

Ms. Buck:  Other comments?

Ms. Miller:  Greg, have you heard enough on this bullet point?

Mr. Martin:  Yes, I believe so.  It was one area where there seemed to be a lot of support around the table for this.

So I think what we need to do is say, should the Department do everything and then that would --

(Laughter)

Mr. Martin:  -- that garners support everywhere.  That definitely reads consensus on that, at least on that, right?  Yes.  That's pretty fun.

(Laughter)

Mr. Martin:  Okay, moving on to two.  And it’s sort of an extension of what we said in one.

How would tuition fees, books and supplies and institutional and private debt be reported?

Separate reporting would still involve a burden, though reduced on institutions.  NSLDS enrollment reporting might be enhanced to include those elements, however, the necessary modifications would take time.

Ms. Buck:  Okay, comments on that one?  Is, Marc, is yours up?

Mr. Jerome:  Just a question.  Are these, is this information sufficiently available in the cost of attendance data that's available on IPEDS?  No?

Ms. Hamad:  Not to my knowledge.

Mr. Jerome:  And what's the reason not?

Ms. Buck:  So don't forget to introduce yourself.

Ms. Hamad:  I'm sorry, it's Cynthia.  No, I do not think that information is currently available on IPEDS.

Ms. Buck:  Other comments or questions or thoughts?  Yes, Sandy.

Ms. Sarge:  I had put expected or published tuition fees might work.  We already have that mapping.  Most schools have something that's either mapping into their enrollment agreements.  So, potentially it's already in a system somewhere at the program level.

It could be, if it's by credit hour, then you could multiple based on the number of credits you have to complete, so you could do that.

I think the difficult piece of it would be on books, given today's trends, with one open source data.  Whether or not students, schools are using that and/or students renting, getting books online, things like that.

Different ways to get book materials may be a little bit of a complication but we could probably work around that.  Expected book costs.

Ms. Buck:  Other ideas on this topic?  Oh, did you have another comment, Marc?

Mr. Jerome:  I just want to point out one thing, and I think Kelly will comment on it.  Again, the way this section of the rule has reported is, it's been reported that the GE rule only holds institutions liable for debt that are directly applicable to their tuition.  And it's written in that way.

And in my mind, it's a misleading part of the rule, especially for community colleges or a low cost proprietary institution because it doesn't take into consideration any grant aid.

And so I don't know if Kelly wants to comment on it or the Department, and I don't know if this is the right place for it, but I just want to make sure we bring it up because it's relevant, I think, especially for a bunch of us.

Ms. Buck:  And that was Marc who was just speaking.  Gregory.

Mr. Martin:  Two things.  We have noted, as an issue from yesterday, when that was discussed.  And I believe, Cynthia, you wanted to make a point?  Actually, ask a question.

Ms. Hamad:  Yes.  I have some questions on this one for you all.  So currently the way the rule works is schools report each student's actual tuition fees, books and supplies charged or cost of attendance in the case of books and supplies, if that's less than what the actual was.

But what I'm hearing you guys say around the table is, instead of doing the actual per student, that you would rather do the published rate.  I was wondering if that is an accurate summation of what I'm hearing?

Ms. Buck:  So do people want to comment on that?  Jennifer.

Ms. Blum:  So that's actually exactly why I had my card up.  Because I wanted to make sure that the conversation didn't go too far down a path.

And consistent with the conversation yesterday when we were talking about the debt calculation.  You know, tuition ought to contemplate, the report of whoever is, however, wherever it's reported.

So whether it's what we're saying in NSLDS and then the Department, because I love the idea of the Department doing the work, it needs to be tuition minus grants or discounting the actual what to, what students are paying to go to your school.

Ms. Buck:  Gregory, did you want to say something before we went further?

Mr. Martin:  I believe Cynthia had one more thing she wanted to say.

Ms. Hamad:  I'm sorry, this is Cynthia.  I don't have a tent card to put up myself and so I'm using Greg's.

(Off microphone comment)

Ms. Hamad:  So my other question for the group is that, I hear you want us to do a lot of this and don't want to do a lot of additional reporting.  Is it worth giving up tuition and fees to not have to do the additional reporting?

It sounds to me like this might be a tradeoff, like, you can just do enrollment reporting and not do any additional reporting, such as tuition fees, books and supplies and equipment, also private debt and institutional debt, or you can have these as factors in the calculation.  So I'm wondering if people are thinking of that tradeoff.

Is the reporting burden worth giving up the benefit to the schools of having it limited by tuition and fees?  I mean, how would you come out on that tradeoff?

Ms. Buck:  So, Sandy and then Kelly and the Jennifer.  Sandy.

Ms. Sarge:  Yes, thank you.  I'm going to give my esteemed colleague, Marc, my time because I think he had a point he was going to make.

Mr. Jerome:  So, it's Marc.  I believe, though I have to go back and look at the data, that the tuition, the limiting the debt to tuition and fees, in practice, may not be meaningful.

But I'd have to go back and look at it to see if it has a meaningful impact.  Especially at higher cost institutions.  And it might.  So, I just have to go back and look at it.

Mr. Martin:  We'd be interested to see anything you came up with for that.

Mr. Jerome:  Yes.

Ms. Buck:  Okay.  And then, Kelly.

Ms. Morrissey:  Well, this is Kelly.  To Cynthia's question regarding the tradeoff, would there be an opportunity to add data elements to the current NSLDS reporting just so that we have a single stream of reporting and we're not duplicating efforts, knowing right now in our data systems, could we add the cost of attendance components of tuition and fees, which would be prorated by enrollment status, et cetera, and would that get us where we need to be?

That's the way that I would envision doing it so that the tuition and fee data would not be absent, there would just be a different way at arriving at that information.

And I also think the most impactful part of tuition and fees, less any kind of grant aid, would be, again, and I know I made this point yesterday, but I think it's worth emphasizing, due to the increase in promise program there really are a lot of programs that have a true net zero tuition and fees.

Ms. Buck:  Thank you.  Johnson.

Mr. Tyler:  I'm asking just a clarification.  When you said -- was I understanding you say you think it might be a wash whether you do the calculation by actual versus the tuition?

Mr. Jerome:  It's unclear to me the extent to which limiting the amount of the reportable median debt to the maximum of the tuition and fees is having an impact, that it should be easily findable on the Department spreadsheet because it would be, how many institutions was the reported debt higher than the actual debt you used for the calculation.  So I'm unaware of it.  I'm unaware of it.

Ms. Buck:  Did you have anything to add, John?

Mr. Kamin:  Yes.  I was just going to add, from my client, low-income client's perspective, the Pell grant that they lose going to an institution that doesn't benefit them in terms of gainful employment.  If that's not being calculated in the context of the total debt, because it's not debt, it's a grant, but it's still a loss of an opportunity.

And if the for-profit industry is suggesting they would use the, just the tuition amount, and in that sense, the Pell grant being lost is counted that way, I think my clients would agree to that.  Did anyone understand what I was saying?

Participant:  No.

Mr. Kamin:  No?

Participant:  I understand.

Mr. Kamin:  You do, okay.

Ms. Blum:  I think we just need to keep in mind that there are a lot of programs in the mix that aren't Pell grant eligible because they're graduate level.  Just bringing that up again.

Ms. Buck:  Sandy.

Ms. Sarge:  Thank you.  I think the, I like the part that, Kelly, that you were saying, to capture the tuition and fees somewhere, and I think this is what you're saying, if we capture the published tuition and fees and we have Pell information and everything, then in reality, we potentially could start to do some statistics or analyses on how much above and beyond are people really borrowing for living expenses.

Because theoretically, cost of attendance includes the stuff that's direct charges to the university plus the living expenses and other items under cost of attendance.  So then you can start to bifurcate how much is going to it, and then there might be other decisions that a tax paying government might, tax payers may question about that.

So I would be in favor, definitely, of gathering the data unpublished.  And again, if it's published tuition I know, I'm still debating because I do think there is accountability for students that get charged more because they didn't pass the classes.  So therefore, their tuition goes up and therefore they borrow more.

You guys allow them to borrow more when they're repeating a class.  So, you guys being the Department, I apologize, so, there's some things in my mind a little, I'm still struggling with but I definitely think that we should look at that.

There are low cost providers in our sector that would benefit from having it be the lesser of debt plus, Title IV debt plus institutional, or private institutional debt versus tuition and fees and supplies and all that.

Ms. Buck:  So, Gregory and then Daniel.

Mr. Martin:  Just a point here.  I think part of what we're, and Cynthia talked about this, what we're getting to here is that, so, for purposes of simplification, ease of burden going to, could we do it administratively, but pointing out that there's a give and take here.

The idea of having tuition and fees or perhaps private institutional debt reported to us, via maybe NSLDS, is very intriguing.  However, that couldn't be done overnight.

Even if we made that decision today, it wouldn't be like, the next time we do rates or even when this is concluded, then we have final rules, we'd be able to do that for quite some time.

So, I think the point we're making here is if, whatever we do involves, is going to involve the use of tuition and fees, books and supplies, then it's going to have to be reported to us, to some of the mechanism, and that's not going to be in NSLDS in for the forcible future.

Ms. Buck:  So, Daniel and then Jennifer.

Mr. Elkins:  I had a question for Mr. Tyler.  This is Daniel.

Are you requesting or wanting Pell grants across the board to be counted in the ratio?  Is that what you're asking?

Mr. Tyler:  If they the Department of Education was going to use the actual tuition, not what was disbursed and not taking to the count, then I would say yes.  Yes, that's what I was suggesting.  That's a value to, I thought that was, what, part of the discussion.  Yes.

Ms. Buck:  Jen Diamond.

Ms. Diamond:  I just wanted to make the point that I think we need to look at cost of living, that needs to be inclusive of that because that's part of the cost of going.

Unless you have the advantage of being able to live with a relative or something like, getting housing in some other way.  That's just sort of non-negotiable and it doesn't really paint the full picture unless we're including that.

And just that in terms of the full-time versus part-time, a lot students are looking to get through a program quickly.  So full-time is a way to do that.  So, that's it.

Ms. Buck:  Gregory, did you want to say something?

Mr. Martin:  Oh, no.

Ms. Buck:  Okay.  Any other comments on Item 2?  Then I think we're ready to go on to Item 3.

Mr. Martin:  Okay.  This is Greg again.

How would the ability of an institution to challenge the accuracy of information used to calculate a GED programs median loan debt be effected, if median loan were calculated administratively, using information already provided through NSLDS enrollment reporting.

Institutions are expected to report accurately to NSLDS.  Any errors that do exist must be corrected in that system.

Reliance upon NSLDS enrollment data exclusively would potentially obviate the need for a challenge period for the debt calculation.  And by extension, the need to publish draft DE rates.

This of course assume no mechanism external to NSLDS is being used to collect institutional debt and private debt.

Ms. Buck:  Okay, comments?  Marc.

Mr. Jerome:  So, I'm just really trying to understand the issue, because this is like a very complex issue.  Am I hearing from the Department that it's a major administrative burden, both for the institutions and for the department, to take the median, the debt information you have and then subtract out all of the tuition fees, books that are a part of the regulation?  Is that what the issue is?

Mr. Martin:  No, not so -- the issue here is one of, I think, getting to a burden reduction on institutions as far as reporting is concerned.

And it just has to deal with, if you adopt the use of NSLDS exclusively to do this, what are the limitations we face and then what, like for instance, do we need a completer's list anymore, because remember, with NSLDS, all the data would be there.

Mr. Jerome:  Right.

Mr. Martin:  So any data that would need to be corrected would be corrected in there.  We would presume that what you report to us, the way we do now, is accurate.

So just understanding that there would be changes, potentially in how we currently do things, were we to go to NSLDS exclusively.

Mr. Jerome:  So essentially, it's Marc, it's Cynthia's question about the tradeoff.  You're saying the tradeoff would be reduce the institutional burden of reporting all the extra fees, but the tradeoff would be we would not have the benefit of subtracting that from the existing NSLDS debt?

Ms. Hamad:  I think this question gets to something slightly different.

Mr. Jerome:  Okay.

Ms. Hamad:  You're currently required to report enrollment reporting data correctly to NSLDS, so if all the data that we're looking at for this is data that you guys have already reported or either from COD or from your enrollment reporting, do we need to have a completer's list, do we need to have a challenge period?

I mean, presumably it's already correct, so we're kind of asking the question that, do we need to have all of these things if under the premise that there isn't any separate reporting and under the premise that you reported it correctly as you're required to do the first time.

Mr. Jerome:  So my sense is, I think you're correct, I'll just have to go back to our technical people to find the answer.  Kelly, do you have a comment on this?  Just because you're in it.

Ms. Morrissey:  I'm just, I think the data is probably the most accurate data that you could obtain.  I'm just wondering, I'm still not sure of the nuance though of how the calculation would differ based upon the absence of some of the data elements that we're currently reporting.  That part I'm not 100 percent clear on.

Ms. Buck:  Okay, Jordan and then Daniel.

Mr. Elkins:  Can I just ask whether part of what's involved in the kind of NSLDS only means omitting institutional and private debt from the calculation as well or are we only talking about the tuition and fees part of things?

Ms. Buck:  So, Cynthia.

Ms. Whitfield:  Thank you.  Cynthia.  That's something for discussion.  I mean, potentially yes, we would, if we just went with enrollment reporting as it is now, you don't have the institutional debt or the private loan debt.

Mr. Elkins:  Okay.

Ms. Whitfield:  Whether or not we add that, but then again, that is an additional institutional bargain.

Mr. Elkins:  Yes.  So I think on that note that would be the kind of, I know a little bit less about how this tuition and fees, the books issue would impact things, but the omitting the other kinds of debt I think is potentially a larger concern because it creates incentives for some of the things that Whitney talked about yesterday with regard to switching loans to kind of institutional loans.

Ms. Buck:  Daniel.

Mr. Elkins:  We agree with the direction that Jordan was going in, we just would be concerned that doing so could potentially incentivize private borrowing from institutions.

Ms. Buck:  Jen.  Jennifer.

Ms. Blum:  So I just want to point out that, and I, again, you know, what would be helpful is, around, I don't know if this is possible by tomorrow or whatever, but it's, I'm not asking for a lot, just a spelling out of what, currently what tuition and fees is currently.

I mean, just for all of us who aren't doing the reporting day-to-day, what is the amount that institutions are reporting, I don't mean each institution, I mean, sort of in the definition of what is tuition and fees, you know, spelling that out so we can see what's in, what's out, relative to what we're talking about.

And then the second point I wanted to make was, of course as we're discussing this to the extent that we're adding it or taking out, then this all goes back to the metric calculation, right, the metric calculation very well might have to change because even if you kept it at eight percent, eight percent in the longer makes sense because you're not, so there's, I mean, I just want to point out the obvious that this is all very much fits together on how you then do the calculation, you know, what the right metric is.

Ms. Buck:  So, Cynthia, I think you wanted to respond, right?

Ms. Hamad:  Yes please.  So this is Cynthia, and you're correct that all of this would impact how the metrics are calculated.

As far as tuition fees or institutional debt and private debts are concerned, the way it works now is that a school reports the tuition fees, book supplies and equipment or these things when the student either withdraws or completes the program.

It's done on a student-by-student basis of what that student has been charged or what loans are, institutional debt that they've taken out at the time of that withdraw or that completion.

Because it's done a student-by-student basis, and then when we're looking at calculating the metric, you compare the total debt, including Title IV and all of that stuff added together, versus the tuition of fees, books and supplies and equipment and take whichever one is lower, that's an interim step in the calculation so I'm not sure it's going to be very easy for us to actually get the data that you're requesting.

I can go back and look at it again, but I believe that because that's an interim step in the overall calculation and it's done one a student-by-student basis with that student's actual tuition and fees and books and supplies that they were charged, I think there might be some limitations on what we can get quickly.

Ms. Blum:  But your explanation was helpful, just thought I'd -- thank you.

Ms. Buck:  Laura.

Ms. Metune:  I think sort of my question was asked, but I'm wondering, has the Department done an analysis of what the rates look like, even under the current methodology when you just include the NSLDS versus total loan debt?

And then second, I just wanted to agree with the concern around encouraging colleges to move only to private loans and not offering federal loan as an option.

Ms. Hamad:  If you all could put together that data request into like something clear and give it to Scott, that would be most helpful.

Ms. Buck:  Other comments on Item 3?  Daniel.

Mr. Elkins:  We just had one question for the Department to clarify the intent behind not using the GI Bill in the calculations.

Ms. Miller:  Does the Department need a minuet to confer?

Mr. Martin:  First off, two things there.  Number one, it's not anything we collect.  Secondly, benefits received under the GI Bill are not, we're concerned with student debt, it's not student debt so that would be why.

Ms. Buck:  Kelly.

Ms. Morrissey:  Another follow-up clarifying question for Cynthia.  You had mentioned earlier, you referenced data that was reported to COD in addition to NSLDS data, so is there some thought that there could be a combination of COD and NSLDS data used in the calculation?

Ms. Hamad:  So, currently these calculations are done through NSLDS, but the Title IV debt is not reported by schools, although it is because you guys are reporting the amount of Title IV when you make the originations in COD.  That data gets, daily gets put into NSLDS.

So that's how we get the Title IV debt is it comes, it comes to NSLDS from the schools but it goes through COD first.  So that was my reference to COD.

Ms. Buck:  So, we have Jennifer and then, Laura, is your card up?

Ms. Metune:  Oh, no.

Ms. Buck:  Okay.  All right, just checking.  Jennifer.

Ms. Blum:  Mines a follow-up question for Cynthia.  Poor Cynthia.  Sorry, this is Jennifer.

This is a follow-up to the GI Bill question.  If the NSLDS though is the actual tuition paid, right, by the student, the actual tuition, wouldn't it implicitly sort of, right, wouldn't the tuition amount be less because the student benefitted from the GI Bill?

Ms. Hamad:  This is Cynthia.  It's the tuition charged --

Ms. Blum:  Oh, got it.

Ms. Hamad:  -- not the tuition paid.

Ms. Blum:  Got it.  Got it, got it, got it.  I've got it.

Ms. Hamad:  So it doesn't --

Ms. Blum:  Thank you for that very important clarification.

Ms. Hamad:  Yes.  So tuition charged.

Ms. Blum:  Yes.

Ms. Hamad:  It doesn't include Pell grants, it doesn't include GI Bill, it's charged.

Ms. Buck:  Any other comments for Item 3?  Then I think we can move to Item 4.  Do you want to introduce that, Gregory?

Mr. Martin:  Oh, I'm sorry, could you repeat that please?

Ms. Buck:  Would you want to introduce Item 4?

Mr. Martin:  I'm sorry, I was -- yes, certainly.  Greg again and Item 4.

Does the analysis change depending on whether DE rates could give rise to sanctions or are calculated only for disclosure purposes or whether DE rates are calculated for all programs or for only GE programs?

So we're asking, does your view on this change according to how those rates are going to be used?

Ms. Miller:  Comments, questions?

Ms. Buck:  It sounds like people need to think about it for a minute.

Ms. Miller:  Need a minute, okay.

Ms. Buck:  Okay, so let's take a five --

Ms. Miller:  Would you like a one function?

Ms. Buck:  -- let's take a five minute break to allow you to think about it and have a pause.

(Whereupon, the above-entitle matter went off the record for a short recess.)

Ms. Buck:  Okay, so I think we're ready now to look at Item Number 4.

Ms. Miller:  Just a quick note about the temperature.  We're working on it.  Sit as still as you can for a while.  It's being worked on, so it's coming.

Ms. Buck:  I think the problem is we keep giving different messages.

Ms. Miller:  We do.

Ms. Buck:  It's too hot, it's too cold.

Ms. Miller:  It's too cold.  And then the temperature outside also effects the temperature inside and it's going to get colder, so just bear with us.

Ms. Hamad:  And I'll say somebody who works in this building, the temperature varies by floor significantly, so you also have people calling in on the top floor saying they're too hot or too cold, and then the 9th floor it's totally different temperature environment, so this building is just not balanced.

Ms. Buck:  So we just have to be prepared for fluctuations in the temperature.  So, Gregory, do you want to introduce Item 4?

Mr. Martin:  Yes, I can reread Item 4.  So, when I read it last time it didn't seem to garner a whole lot of interest, but we'll see if that changes this time around.  I'll use different reflection and see what happens.

(Laughter)

Mr. Martin:  So, okay.  Does the analysis change depending on whether DE rates could give rise to sanctions or are calculated only for disclosure purposes or whether DE rates are calculated for all programs or for only GE programs?

Ms. Buck:  So, Sandy.

Ms. Sarge:  I have one, Sandy, I have one clarifying or question I want to throw out.

And then to answer that specifically, I think basically at the end of the day, if we have one source, one place where the data is all being housed, it certainly has the potential to reduce the chance of erroneous data being gathered because at least we have a place where there is, we're putting data into one spot.  And we'll learn through what was the next 109 electronic announcements on how, but we'll get it there.

We'll get there by all the good questions.  So I would go with one unified source.  I'm not sure I'm answering that direct question.

But I've been really trying to think through this whole direct cost to universities versus cost of attendance.  I understand, cost of attendance is out there for a reason and the ability to borrow, to help students so that they can presumably focus on college and not have to work, although even with the amount of money we're, the student are able to borrow, but of my children have had to work full-time just to cover their state school stuff, so I beg to differ.  I'm not sure that it's not enough, but that's another question.

So for me, the issue on the table is whether or not we have institutions that are charging too much.  So to some degree, by taking out or getting to the specifics and not mudding it down with people in different areas get to take out the same amount of debt, like, Jordan, you mentioned earlier, well, can't we just limit the amount of debt that the student can take at a certificate level, we would come to the table all day long and say, please, let us limit debt, but we're not allowed to.

And if a student asks us for the debt, even though we can see that it's not a good financial decision, financial aid advisors are not allowed to tell them they can't take the debt.  Unless someone clearly tells them that it's not their intent to use it for educational purposes.  And then we just get the news in our face.

But, to your point, Jennifer, cost of attendance, living expenses are going to happen for every single student, no matter where they are.  It muddies the water and you can't get to a clear picture of whose overcharging if we don't figure out a way to capture that information by itself.

And I don't know whether that means we then do something along the lines that Jordan was mentioning earlier, where we up tick for a percentage, a stabile percentage, but if I choose to go to a school in New York versus Tallahassee or Tim buck two in the middle of Iowa, my cost of living is much different.

So, students still borrow the same amount of money.  Nobody gets a geographic differential or a reduction because they live in a less expensive area.

So, I'm still am not, and I apologize, I'm not being overly clear yet, it's still sort of in the mathematical bits and bits in my, right here, it's still noodling and probably 3:00 in the morning I'll wake up and I'll have an answer for you, but somewhere along the line I'm uncomfortable with not figuring a way to differentiate, bifurcate, direct institutional charges, and that other money we spend to live, to go to school.

Because there's lots of different ranges in which a student can choose to live.  Some economic and some not so much.  So thank you.

Ms. Buck:  Thank you.  Jennifer Diamond.

Ms. Diamond:  This is Jen Diamond.  Yes, thank you for bringing it back up.

Regardless, talking about gainful employment, this is preparing students for employment that will allow them to pay back their debt.  And their debt has to, part of that is going to have to, for a lot of students.

Especially low-income folks who are paying to live no matter where they are, they're going to need to take on some debt to make up for the fact that they may not have parents helping out with them, whether that's through a place to live or not.  And that's, for a student, that debt still needs to be paid back just the same.

But when I said that's non-negotiable, I intended to mean that's, for a student, not a choice.  They need to pay for a place to live, they can't, you know, students experiencing homelessness is a whole other issue, but we don't want to be moving anywhere towards that direction obviously.

But the one other thing I just wanted to bring up to this actual question, the one we're talking about, is just whether we really needed to be discussing it in the context of sanctions.  Since it seemed we, as a group, we're fairly lukewarm to warm on including some level of sanctions.  Whether they needed to be amended or not and whether that would be a good use of time.

Ms. Buck:  Daniel.

Mr. Elkins:  I just need a little clarification.  I don't understand the nature of the first part of the question as it relates to the second part of the question, so, Greg, if you could just maybe try and explain it one more time please?

Mr. Martin:  Sure.  Again, to re-frame it, you have to look at it in the context of, what we're asking here is we're approaching this from the perspective of could, hypothetically, could the Department accomplish these calculations with information that it has without the school having to report anything to us.

So, basically what we're saying here is, despite the fact that it may be possible at some future time to collect the things we would need that we don't currently have, which would be institutional and private debt and tuition and fees.

So given what we currently have in place then, in order for us to calculate the rates without the school reporting anything, we could not use tuition fees and we could not use institutional private debt.

So what we're asking here was, one question was, what do you think about that?

This last question is, given what you may get or give up, another side of this issue if it went that way, does that change your, does your opinion change, if we were to use the rates only for the disclosure purposes and not to impose sanctions --

Ms. Buck:  Does that help, Daniel?

Mr. Martin:  -- does that help?

Mr. Elkins:  Yes, that gives me the ability to answer the question now, so thanks for that clarification.

Yes, we would see no reason why if the Department could calculate on its own internally these rates at all institutions, what downfall would there be in giving those metrics and providing them to the public for everyone at all institutions?

If it's not a burden to any school and the Department has the data, it would definitely provide a good picture to private and non-profit schools to what's going on there.  And I think it would also give students an ability to make choices at those institutions as well.

Ms. Buck:  Jennifer.

Ms. Blum:  So, I guess it's responding a little bit both to Greg and to Jen Diamond.  So, I do think it's still a relevant question because even though we all said that we should consider what sanctions look like, how, whether who's doing the reporting and the, or whose doing the calculation piece on the debt becomes actually, actually I think, a little bit more of an important question if there are sanctions, because of the appeal piece of it, which becomes much more important if you're losing Title IV over it.

And so the transparency issues around the Department doing the calculation, I'm totally keen on the Department doing the calculations, but, if it's for sanctions, there is a little bit of a, we're relying a lot on the Department piece, so I think there is, I think it is still a really worthy question.

So I just want to say it is a worthy question because they are considering both, sanctions or no sanctions.  And I think the variable is that if they are doing the math, if you will, we need, the appeals piece will become even more important on the debt side because we're already struggling with the appeals piece on the earnings side, if you see what I'm saying.

So there will be a struggle on the debt side to make sure that the Department did the math correctly.  So there is that on the sanctions piece.

I'm not saying one way or the other, I'm just saying it is a really relevant question because we would be putting a lot more with the Department on that front, that half of the equation.  So that's why I do think it is a relevant question.

Ms. Buck:  Jeff.

Mr. Arthur:  Yes, and I would point out that even if data is used for disclosure purposes only, as it relates to the appeal process, I would say that there is still a, hopefully one of the things we get out disclosures is some competitive improvement.  And so from that perspective I think we'd like to be able to appeal and deal with any kind of outcomes that are reported through an appeals process.  Even if it is only a disclosure.

And then just on the, one point on the reporting.  If we boil this down to reporting one record for each graduate, the burden on what we report to you is minimal.  Whether it's tuition fees, books, all that, that we aggregate it into one field, that is very doable.

Ms. Buck:  Thank you, Jeff.  Kelly.

Ms. Morrissey:  I think that even if the analysis was only done for disclosure purposes, it could be very troubling and misleading based on the current NSLDS record.  If we were unable to append that record to include tuition fees, institutional and private debt, I think it would be very less meaningful to students.  Because they really need to be able to relate the amount of debt incurred on a program level to the actual tuition and fees charged for that program.

So, again, I'm very supportive of a single reporting stream, but I do think we would need to append to the record to include those additional data elements.

Ms. Buck:  Thank you.  Matthew.

Mr. Moore:  Hello, Matt Moore here.  I'm kind of going along with what Kelly said.  I think my fear in it is that the data is right, whether it's for sanctions or whether it's for disclosure, and with the normal reporting process as it is just now, it's very complicated.

And as we talked about before, it being R2T4 being a top audit finding, actually enrollment reporting is a number one auditing finding and program review finding.  So if we're taking something that student, or the schools are already having difficulty doing and adding this other layer of complexity to it, just makes me fearful about the kind of data that we'll get out of it.

And so maybe not the popular thing to do is maybe a succinct reporting just for this purpose may be the best thing, so that we know that that data is reported correctly.

The other point to that is often times, at least in my institution it appears in Ohio, that enrollment reporting is done by not the financial office or not the business office, it's done by the registration area.  And so they aren't really as adapted to understanding enrollment reporting from what we need in financial aid or from the GE regulations.

So I just think, for those reasons, that maybe it makes sense to keep it a separate reporting mechanism.  Thanks.

Ms. Buck:  Thank you.  Sandy.

Ms. Sarge:  This is Sandy.  And I feel like I'm a day late and a dollar short.

Earlier you had asked what other sanctions might there be.  You already, I believe, have the ability to put sanctions on schools without putting them out of business.

You know, like HCM1, Heightened Case Monitoring 1 or 2.  And potentially that could be used in alignment with allowing the school to improve, take away the limitation of, you can't have a school almost like it for three years because I think Jessica's point earlier was excellent that, hey, if we can go out there, look at the information and realize, oh, we can downgrade that to a certificate, get the same outcomes and salaries for our students but at a lower cost, and we should do that.

But during that time perhaps HCM1 would be a way to combat or to hold us accountable to it, but without putting us out of business.  So that might be a thought since those mechanisms already exist.

Ms. Buck:  So thank you, Sandy.  Are there other comments for Item 4?

So, Gregory, do you feel like you have gotten what you needed with regard to Issue Number 7?

Mr. Martin:  I do.  I think we had some excellent conversation and that we had some novel ideas.  And I thank everybody for that.

Ms. Buck:  Then let's move on to Issue 8.

Mr. Martin:  Okay.  I just want to say that Cynthia Hamad is going to remain up here for the discussion of Issue 8.  Since she is undoubtedly the expert on certifications far none.

All right, so Issue 8 is certification requirements.  And currently an institution is required, as a condition of its participation, to certify that each eligible GE program it offers is approved by a recognized accredited agency or is otherwise included in the institutions accreditation by its recognized accreditation agency.  Or if public vocational post-secondary institution, the program is approved by the recognized state agency.

Each eligible GE program it offers is programmatically accredited, if such accreditation is required, by a federal governmental entity or by a governmental entity in the state where the institution is located.  Or, in which the institution is otherwise required to obtain state approval.

For the state in which the institution is located, or in which the institution is required to obtain state approval, each eligible program it offers satisfies the applicable educational prerequisites from a professional licensure or a certification in that state.  So that a student who completes the program and seeks employment in that state, qualifies to take any license, licensure or certification exam needed for the student to practice or find employment, in the occupation that the program prepares the students to enter.

And for a program which an institution seeks to establish eligibility, the program is not substantially similarly to one that in a prior three years became ineligible under the DE rates measure or was failing or in the zone and was voluntarily discontinued by the institution.

An explanation of how the program is not substantially similar, that is, shares the same four digit zip code, to any such ineligible or discontinued program, must be included with the certification.

The above certifications must be made in the institutions program participation agreement and updated within ten days if there are any changes in the approval for a program, or other changes for a program, that make an existing certification no longer accurate.

So, we'll start with the questions, address each individually, beginning with, should existing regulations relevant to certification of GE programs be retained in their current form or modified, including in the event that the regulations are otherwise extended to cover all programs?

Ms. Buck:  And just based on the past questions, does anybody have any question about the questions?

In other words, is there any clarification needed before you respond?  Okay, Daniel has a question.

Mr. Elkins:  Same as the last point.  That second part, including in the event that the regulations are otherwise extended to cover all programs, just help me understand that once more as its germane to this area of topic.

Mr. Martin:  Currently the GE regulations apply only to what would be, what per statue would be GE programs.  What we're asking here is, if the requirements were extended to, for all programs, not just what are considered GE programs, would the certification requirements be applicable to all programs or just GE programs?

Ms. Buck:  And, Marc, do you have a question about the question or you have a response?

(Off microphone comment)

Ms. Buck:  Okay, go ahead.

Mr. McKenzie:  Great, thank you.  Mark McKenzie.  Greg, could you clarify what you're referring to when you describe a program as approved by a recognized accrediting agency versus, in the second bullet, it's programmatically accredited.

So, are we talking about programs for which the, is it about institutional accreditation or programmatic accreditation and is it specific to the type or approved through substantive change where there are no standards?

So, it's just confusing me in being an accreditor, it may leave some questions for others.

Ms. Hamad:  So the one is about --

Ms. Buck:  So, Cynthia is responding.

Ms. Hamad:  So Cynthia is responding, yes.  The one question about the programmatic accreditor is some states or other agencies actually require programmatic accreditation, so it's asking specifically about whether or not you have any programmatic accreditation if that is required.

The other question is asking, does this program fall within the scope of your institutional accreditation?

Sometimes the institutional accreditation covers everything and sometimes it only covers certain things.  So it depends on the accreditor, it depends on the school.

So we're basically asking is, or what schools are certifying when they currently sign this is that this GE program meets whatever the accreditation requirements are, that it's covered within the accreditation.  Does that help?

Mr. McKenzie:  Yes.

Ms. Buck:  Okay, very good.

Mr. McKenzie:  One additional clarification.  So any of those programs would have to be listed on the PPA, right?

Ms. Hamad:  Currently all gainful employment programs are listed on the PPA.

Mr. McKenzie:  Right.  So to be specific, so the accreditor also looks at the PPA and that needs to be within their recognition, their scope of recognition, right?

Ms. Hamad:  Some accreditors would do that, other accreditors would say something like, this school is authorized to offer all graduate certificate programs.  And so, if it's a graduate certificate program it's covered under the scope of the accreditors recognition --

Mr. McKenzie:  Right.

Ms. Hamad:  -- and then the school is attesting that this program that I am offering is covered under the scope of the accreditors recognition.

Mr. McKenzie:  So clarifying, it's a difference between almost a national versus a specialized accreditors approach?  Somewhat.  Got it.

Ms. Hamad:  Not necessarily.  It depends on the accreditor and on the school.

What we were trying to get at here and what schools are attesting to is that I'm not offering a program that my accreditor doesn't recognize.  Now, how they recognize it --

Mr. McKenzie:  Right.

Ms. Hamad:  -- is between the school and their accreditor.  We just want to make sure that the accreditor recognizes that you're offering this program and that you're legally allowed to do so.

Mr. McKenzie:  Okay.  This, I'm trying to seek clarification for the rest of you because the term approval, from an accreditor, sometimes is very misleading or used.  Sometimes it's used by institutions, says this was approved by my accreditor, but the accreditor doesn't actually have standards for that particular program.

So, at what level is really approved?  So, that's why I'm kind of trying to really be clear on our end is what the terminology actually means.

Ms. Buck:  So, are you referring to Item 1 or Item 2 in your question, Mark?

Mr. McKenzie:  Well, it covers.

Ms. Buck:  Okay.

Mr. McKenzie:  So Item 1 talks about approval, Item 2 talks about programmatic accreditation.  And so that's what I was trying to seek is, is one more specific to institutional and national accreditation, which includes all programs under that accreditor versus number two is more specialized and programmatic and is really geared towards just that single purpose.

Ms. Buck:  Okay.  And before we go on, do you want to respond to the first question or not?  No?

Mr. McKenzie:  Not at this time.

Ms. Buck:  Okay, very good.

Participant:  And can I just make one comment?

Ms. Buck:  Sure.

Participant:  So the first one actually says, not only approved by recognized accrediting agency, it says, or as otherwise included in the institutions accreditation.  So that would cover the situation that you're talking about, that they don't necessarily approve it program-by-program.

For the second one, is programmatically accredited if such accreditation is required by a federal government entity by a governmental entity in the state where the institution is located.  So that's, sometimes there is an additional requirement.  Maybe for a nursing program, definitely for all flight schools.  There's some additional requirements other than just they're general institutional accreditation.

Ms. Buck:  Okay, Laura.

Ms. Metune:  I feel like I'm a little bit out of my element.  My question on this was going to be, why in the world wouldn't we know if a school's program is approved to educate the student so that the student could sit for licensure or other requirements of that state, for any program where a state requires such a standard.

But in hearing the conversation I think I understand a little better, and I thought I would just share a story which is, before I worked for the community colleges I worked for the bureau that works for-profit colleges in the state of California and the first school closure we faced was an institution that was offering a program for which it didn't have proper certification for students to be licensed.  And so the way we found that was because schools were required to disclose whether or not they met the certification and licensure requirements at our state.

So I think it's a really important disclosure.  And I'll let my colleagues at institutions who have more experience with this speak in more details to what's required and what's appropriate or not.

Ms. Buck:  And what would be your response to the first question?

Ms. Metune:  I don't see, yes, it seems to me that the certification requirements should be retained.

Ms. Buck:  Okay.

Ms. Metune:  And in regards to covering all programs that, I guess the question is, to the degree, like, what percentage of programs outside of the current GE require that level of certification or licensure in each state and depending on the answer to that would probably help me evaluate whether or not it's worth that additional requirement.

Ms. Buck:  Okay.  Whitney.

Ms. Barkley-Denney:  Thank you, this is Whitney.  I agree with Laura that we would very strongly feel that these requirements and regulations should be maintained and retained.  And specifically, actually, I think this kind of goes right to the heart of what gainful employment is.  You cannot be preparing someone for gainful employment in a recognized occupation of that occupation requires licensure and your program does not have the proper licenseship. That's really what it's all about.

As to its extension, I certainly would be willing to hear more.  I have a feeling I know what Jennifer is going to say about grad programs possibly, but I think that there's maybe more room to work there.

But when it comes to gainful employment programs in particular, this regulation goes directly to the heart of what we were supposed to be doing when are preparing people to work in fields that have to be licensed.

Ms. Buck:  Thank you.  Daniel.

Mr. Elkins:  I agree completely with what Whitney just said.  I would further, that I wouldn't understand why there is a good argument to not apply it to every program.  I mean, it just doesn't make any sense.

I mean, if you're at an institution that's offering some sort of certification or credential that you then can't sit for your license, that just doesn't make any sense.

I think this starts to also kind of dance around the edge of what is the actual role of the accreditors in the triad and what's the role of the federal government.

And I would love to hear from the AGs, at some point, as we talk about these specific things, when it comes to enforcement, what's lacking from their view on current enforcement ability.  Why we would need to maybe have this.  I think that their insight into that would be very helpful for everyone around the table.

Ms. Buck:  So, continuing with Item 1 let's go to Jordan.

Mr. Matsudaira:  Thank you.  I just wanted to ask a little bit of a clarifying question about the requirement that a program be licensed in the state where the program operates and how that interacts or if there's maybe a kind of a smaller print in the regulation somewhere that addresses things like that about where students live?

Like in situations where the student is taking a course that's online, that's not in the states where the institution is located, are there kind of requirements that the program is licensed or qualifies students to be licensed, I'm sorry, I'm struggling with the language, but in the state the student resides rather than where the program is?

Ms. Buck:  Is there any response from the Department of Ed on that or do you want us to go on?

Ms. Hamad:  Hi, this is Cynthia.  I may be corrected by our legal counsel, but, so, currently there is a cross reference in the regulation to the state authorization regs.  And that's how the, schools are only required to do certification for the state in which they have a school, but there is a cross reference to the state auth regs, which I'm lucky I'm where we are on those but I do not think they're in effect.  So they're not in effect.

So that's how we handled it the last time around, we would have to look at it again of how that issue would be handled this time around.

Ms. Buck:  So, the --

(Off microphone comment)

Ms. Buck:  Well, I don't, there are other people waiting though, can I kind of put you in the list?

(Off microphone comment)

Ms. Miller:  Well, let me ask, Sandy, you were next, so what do you think, Sandy, would you like to go next or --

Ms. Sarge:  Can I go after him?

Ms. Miller:  Yes.

Ms. Buck:  Okay.

Mr. McKenzie:  Thanks.  Mark McKenzie.  For those kinds of things, Jordan, first, if they're going to add a program it has to go through accreditation.

And we'd be looking at distance Ed authorization.  So first you look at this data in which the campus, main campus resides.  But typically, anywhere they're having students, those states will have some kind of regulation on online types of requirements.

And there is an interstate thing called SARA where there's communication back and forth about online programs.  A whole different regulatory issue way behind the scope here, but there is a framework there.

Ms. Buck:  Okay, so the lineup now is Sandy, then Jennifer, then Jeff, then Bob, then Jessica, then Chris.  So, on to Sandy.

Ms. Sarge:  Thank you.  I'll be shockingly succinct.  For Point 1 I would keep it, for Point 2 I would keep it, for Point 3 I would keep it, for Point 4 I would remove it, based on the suggestion from Jessica on the ideas of allowing schools the ability to improve programs that we've already been discussing, and in which case I would change that language to something else.  But, three keeps and one amend or remove.

Ms. Buck:  Well, very good.  You didn't mention Item 5, but --

(Off microphone comment)

Ms. Buck:  Oh, okay.

Ms. Sarge:  Oh no, I was just answering to the four.

Ms. Buck:  Okay.  I was looking at the questions for consideration and you're looking at the other piece, okay.

Let's go on then to Jennifer Blum.

Ms. Blum:  So, and this one is a difficult issue, well, it's a difficult issue for a lot of reasons, but this is a difficult one to keep just for your purpose as perhaps, Ramona.  I think it's hard to keep to the questions --

Ms. Buck:  Okay.

Ms. Blum:  -- because they sort of all blend.

Ms. Buck:  Okay.

Ms. Blum:  The topic is all blended so that's why I think you hear --

Ms. Buck:  You want to comment on, yes, and other people have been doing so as well.

Ms. Blum:  Right.  So, I mean, I was sort of holding off on talking.  I thought, hold my tongue, but now everybody has sort of morphed it and I think we just need to morph it because I think it's hard to talk about otherwise.

So, this is an extremely complex, and I'm going to focus on the, not as much on the state.  So, I mean, this touches, obviously, on the institutional state approval pieces.  That piece, I think, is actually pretty clear, although we got the state off issues lurking.

I'm going to focus on the licensure piece.  And again, I know I do sound like a broken record, and Whitney is right, but this is, in terms of applicability to all, this is a very difficult, I wouldn't, I mean, to be honest with you, I wouldn't wish some of this on anybody.

But I do think that it's very difficult to suggest that licensure programs at the graduate level, online, have to certify the way we do, and the Department, I'll get to the Department being very thoughtful about this the last time, but it's still very onerous.

And for us to have to do this at the graduate level, professionally, probably professionally and not have it be applicable to everybody, is extremely, it's a little bit painful.  I'll just put it mildly.

The Department, and I think Jordan asked a little bit about this, the Department was thoughtful about the state in which you are located, on licensure.

The issue around licensure that makes it so complex is that you don't seek, when you offer a program, a licensure program, you don't, the program, you in this case is the school.  The institution can't seek approval from a licensure board in advance.  I wish we could, but we can't.  We're not allowed to.

So when we create our curriculum we do it very much, and somebody asked about the triad too, and I think that's a very excellent question in relationship to the specialized and programmatic of creators, when we create our programs at our licensure level, we always want to seek the best form of programmatic accreditation that we can.  And so we'll try to attempt to establish our programs curriculum around the requirements in order to eventually get that accreditation.

There is a chicken and egg issue too, which is painful, which we've pointed out to the Department before, which is that accreditors won't credit you until you've been in existence for a number of years.  So you also have that pain point on your certifications and how you describe yourself, even to your students.

And so this is extremely complex that licensure is something that is granted to the graduate from your program and is not something that is granted to a program.  I'm completely sympathetic to the consumer protection issue here.  Completely.  I just wanted everybody to understand the complexities.

I would love actually, and it would be a burden, but we would love to have licensure boards approve us in advance of us offering.  So we had that certainty in our head.

But we're dealing with students in 50 states, and so the certification piece of it has been thoughtful, and that's why it's partially in states in which it's located.

There are disclosure requirements, which we'll talk about.  I think there, whenever we get to disclosure, I guess tomorrow.

And so I would emphasize the disclosure piece when we're talking about this, over the certification piece as being meaningful to the student.  I very much think the disclosure piece is, it's more than important, it's really critically important.

And I've spoken, we've filed comments on this before and we feel very strongly about disclosures.  But again, I would even caution on the disclosures, we're not in the relationship with the licensure boards per say, it's the graduates who are in the relationship.

And even, they won't even, and this is a real issue, licensure boards won't even provide advice to students while they're active students, they'll say, we won't consider you until you’re done.  And that's a real issue for us.

We beg licensure boards to talk to our students about whether they're going to be eligible in advance.  So those are the types of issues that make the certification piece sort of complex.  Even in your home state there can sometimes be issues around that.

The other piece I want to point out is, there is a tie between programmatic accreditation and licensure.  Some states require that you be programmatically accredited by a certain accreditor.

I have mixed opinions about all of that, but they sometimes rely on the programmatic accreditation in order for your student to be licensure, but then most states also provide an "alternative pathways to licensure," and those are usually curriculum driven.

And so, again, the reason I am pointing this all out is, you can be, I know there have been bad actors, I am not questioning that, I just want to point out the significant complexities around that.

And so what I would say is that it's really worth talking about this in the realm of disclosures.  And also at the levels of degrees again at which we want this to sort of be thinking about it.

And the other thing I would say is that on disclosures, that is the place where applicability to all, because again, we disclose all the stuff about where our programs may or may not be, where our students may or may not be eligible for a licensure, but we're just one institution and there are lots of institutions that are not doing that.

Ms. Buck:  Thank you, Jennifer.  Jeff.

Mr. Arthur:  Yes, I have a concern that I believe fits here.  It feels like it fits here better than anywhere else.

But in 2010 the number of zip codes increased dramatically, especially in the computer science area.  So they about doubled or tripled at that time.

And as one of the largest graduators of computer science students in the country, we have several computer science tracks.  So I kind of refer to this as a zipzar of our institution because I get so paranoid about what we're doing with our computer science programs.

And I think actually, some inquires I made about reverse engineering zip codes for GE reporting where, lead to this.  And later guidance on directing institutions to go back and to make sure, if it's the same program that you changed the zip code in 2010 to adjust that zip code you're using prior to that, to the new zip code.

And so I get a little paranoid about what our computer science department does.  In 2020, frankly, there could be two to three times more zip codes for computer science.  And we know a program is defined as a zip code, so I get a little concerned.

And I'm not real clear even whether our certification that if we had an oversight where an enthusiastic department head somehow, he overlooked letting me know so I could adjust our ECAR that, oh, this program, which is still the same program, now we've got the zip code that fits it really well, so we changed the zip code to that and now all of a sudden we shoot some reporting in and COD is going to alert me and all that, but I just get a little concerned about, what if there is an honest oversight on a program that effectively isn't that big of a change but did require a zip code change.

So I just wanted to throw that out there for consideration as we have to have all of our GE programs on ECAR, which we do a pretty good job of.  Or, we have to do a good, I mean, it's perfect, but I'm just worried about oversights.

Ms. Buck:  Thank you.  So now we go to Bob.

Mr. Jones:  Bob Jones.  At risk of people raising cane with me, I would point out that the vast majority and growing majority of our programs in this country are neither licensors nor state required certifications.  They are industry certifications and all kinds of other carious models.

It is precisely the point I've been referring to for two days that we need, schools need, client students need to know which of these accreditations are licensed, certifications or whatever are in there.

And let me tell you in this case I will claim some expertise.  A lot of schools, many of in this room that I have been visiting, will show me lists of certificates.  Word means nothing.

It means completed the course.  Or maybe in some industries it's a very specific standard.

But that information needs to be disclosed regardless of anything else in this process.  And it is a disclosure.  We don't need to go past that.

I will make the point again.  Tomorrow afternoon I won't be here, we will be announcing the credential engine initiative across this country where credentials from all your institutions will go public, in 35 descriptors.  And it has in there specifically who accredits this and what's the standard and everything else about it.  That information needs to be available to everybody.

Ms. Buck:  Thank you.  Jessica.

Ms. Barry:  Jessica Barry.  There will be no surprise that I want to comment on Bullet 4.

But I do want to add another point to this.  I thought of another situation.  So what I am proposing is that obviously this was created so you can't have a failing program, it fails, you close the program and then you open it right back up the next year on the same campus and it's the same failing program.  I totally understand that.

And what I was suggesting this morning is you could rework the program and it offer it at a lower credential level that had less debt associated with it.

The only thing I wanted to suggest here is, if I have a program at one campus, and say it's in the small city of Dayton, Ohio and the earnings are not very high in our area, I may be able to offer that exact program in a different state, on a different campus and it would pass.

So, I would suggest amending Bullet 4 to, let me get back to my notes here, to allowing colleges to either offer a similar program at a lower credential level or on a separate campus.  If they can prove that it would have good metrics.

(Off microphone comment)

Ms. Barry:  Or in a different modality.  That's actually another thought I hadn't thought of, so thank you.

Ms. Buck:  Thank you, Jessica.  Chris.

Mr. Madaio:  Thank you.  Chris Madaio.  A few points, and Daniel was nice of enough to ask about some of the state AG perspectives, so I would be happy to give that.

Obviously, state consumer protection units and divisions enforce something called a UDAP.  We throw a lot of acronyms around the table this week so I think it's always good when we're using acronyms to define them because a lot of people don't know there is R2D2.  I like R2-D2, but not R2D2.

All right, so anyway, we all come at this from different angles.  So a UDAP is just an acronym for unfair and deceptive trade practice.  So every state has some sort of law.  Consumer Protection Act some people call them or essentially, right, they prohibit misrepresentations in some form or fashion.

But obviously they're all different because we have 50 states and everybody has somewhat of a different wall.  Some of them are more stringent, some are less stringent, some require a reliance by someone, some do not.

So I think that it was important to remember, when we're looking at gainful employment, that we are creating, right, a regulation to protect students and ensure fairness and protect tax payer money, pursuant to the Higher Education Act.

So, I always go back to that because the state AG's prosecuting unfair and deceptive trade practices don't encompass the same things that the Higher Education Act was aimed at accomplishing when it allowed Title IV participation by gainful employment programs.

And also, obviously it's very backward looking, right.  I mean, prosecution by a state really can only come about when either there are complaints or somehow the state knows about it, in response to a more specific example.

States are obviously overburdened, I mean, like all states are.  And it's trying to fix a problem of a student who was already harmed, whereas it's really unable to stop future problems that are going to occur, when a program is not providing gainful employment, right?

So if we assume that there is some way we're able to determine it, like a debt to income metric, or some metric that would tell us this program is not going to provide gainful employment, a state prosecution is more backward looking.  It would be unable to rectify anything like that.

And I think as far as these bullet points are concerned, like for instance, Bullet Point Number 3.  In some states, it might not be a violation of an unfair and deceptive trade practice to offer a program that doesn't obtain licensure.  It would be a violation in Maryland, but in some states, perhaps if a school isn't lying about it, if they just, the student never asks and I never tell, you know, it's oops.  So that's possible.

So I think it is really important to maintain Bullet Point 3.  And in fact, I think it should be enhanced.

If to apply to the area where the student is located, not where the school is located.  Because the student is the one who wants to get the license, obviously.

So if the school is based in a state that might have a less regulatory burden, or may have a, on the licensure program, but the student is in another state where there is higher requirements for a licensure program, it would not make sense for that student to be able to go to that program without being warned or told or informed or something that, or nonetheless, putting aside that, the student shouldn't be able to go to a, obtain a license or go to a program if they're not going to be able to get a license.

And some states are passing laws prohibiting that.  And Maryland did pass a law prohibiting students from going to programs where it would be impossible for them to license.  To obtain a license.

But again, it's not the same in all states.  And this is an aspect of Title IV participation when it needs to be the same in all areas.  I mean, right?

To the schools, I mean, obviously I understand it's probably difficult to ascertain licensure requirements in all 50 states if you offer programs in all 50 states, but I guess it's a little bit of a, if you can't take the heat get out of the kitchen, right?

If you want to offer the right to offer programs in all 50 states, it feels to me that you should have to do the work to determine what do you need to offer the students in those states in order to make sure that they can get the license.

And then finally on Bullet 4, right, as a consumer protection attorney I'm very worried about the bad actors, because those are who I see gaming the system.  And altering programs by title or by certificate, going from an AA to a certificate program.  So it's outside perhaps the zip code, but it is able to continue on.

So I understand that perhaps there are ways that a program would want to change, or a school would want to change the program to somehow improve itself or have a program that might pass, but I'm very afraid of the bad actors who can game a system to essentially continue a bad program on just by polishing the turd.

Ms. Buck:  Thank you.  Whitney.

Ms. Barkley-Denney:  Well, Chris covered one of my comments, which was about making sure that the substantial similarity definition is tight if that's something we're going to do.  And covered it very colorfully.

I also wanted to say, and this is something I think we have to think about, and I know, guys, it's hard and it would put a lot of burden on institutions but I think it's important, which is, in most states there are not only programmatic licensure issues but there are problems with people getting employed if they have certain criminal records.

And I have seen it, when I was practicing in legal services, where people who had, for example, drug felony convictions, were trained to be pharmacists.  Or not pharmacists, but pharmacist assistants.  You cannot be a pharmacist assistant with a drug felony conviction.

And so while I agree, or disagree with a lot of these state laws and believe that we should band the box and do all of those things, currently there are people who are coming particularly to certificate and associate degree programs looking for job in a specific field, whose criminal past unfortunately prohibits them from working there.

So I think that that's something that we should consider going forward.  Whether it takes disclosure, if you've been convicted of these things you cannot work in this field, that would not be my preference, but I would like to see it outright banned from enrollment.  But I do think that is something that we need to consider in this section of this, under certifications.

Ms. Buck:  Thank you.  Johnson.

Mr. Tyler:  Yes, I would just like to say, I think most consumers assume all of this is true when they're interacting with an institution where they're going to take out a significant loan like this that they are going to get something.

And I think the idea that you have to nuance stuff in a disclosure statement or something like that, I don't understand all the certifications that you're talking about, but I do think the consumers believed us.

I think this also provides a basis if an institution is taking money from people that they're not providing the services they promised that the Department of Education can easily do something about it.  Because there's a certification process here.

It's less complicated than an attorney general, like Chris having to file a UDAP claim or something like that.  So, that's all I have to say.

Ms. Buck:  Thank you.  Stephen.

Mr. Chema:  Steve Chema.  My comment is limited just to one observation I have related to Bullet 4, which is, when you are using just the first four digits of the zip to establish similarity in programs, based on what I have observed in the taxonomy of the zip code, that can sweep in a number of professions that are not the same.

So, just for example, the first four digits for diagnostic medical sonographer, an ultrasound tech is 51.09.  A radiologist is 5.09.  So those are two diagnostic medical occupations but they're very different.  They require different licensure, different registry at the state level.

You're using very different technology.  I don't think I'd want a ultrasound tech doing my x-ray.

But just to further drive the point home, surgical technician is also 51.09.  So that's somebody who's not, whose not in a diagnostic mode they're in there assisting a procedure.  Very different type of occupation.

So, if you had all three programs at an institution, one of which failed GE, you wouldn't be able to add one of these, or if you had two of these three you wouldn't be able to add the third.  If one of your programs were failing.

And I don't think that's the intent, I think the intent, as Jessica had indicated, was to prevent schools from just tweaking a failing program and presenting it again.  But that currently, as we had it with four digits, eliminates other possibilities as well.

Ms. Buck:  So we have spent about 30 minutes on Item 1 now, there may be some overlap with the other points, I'm just pointing that out.  So we go on to Mark McKenzie.

Mr. McKenzie:  Thank you.  Mark McKenzie.  Just a quick clarification back again on the issue around licensure and certification.

So, these are all accredited programs so as an accreditor, one, you have to verify that the institution has state authorization to offer the programs that they're offering.  So that's the first thing before they ever get accredited.

And if they add a program they have to go through a substantive change, it also demonstrates that the state has authorized that program.  So the accreditor is checking on that.

The other thing that's almost, I think it's universally required by accreditors is, if there is certification requirements or licensure requirements in a state, the school has to demonstrate to the accreditor that they met those licensure, that their curriculum meets those requirements.  We would never approve a program to do that outside of the accredited process.

So, there is already a system built around this.  Accreditation really takes this into account.

And the issue, if you're operating in multiple states, you have to demonstrate it for every state in which you're operating.

It does get a little bit weird with the online stuff and that's why the whole SARA environment is trying to figure out how states do this because it is very challenging for states to get individual authorization to do an online program for one student in Utah that wants to take a program online for a school in Oregon.  So that's a challenge, but it's a different scenario.

Ms. Buck:  Thank you.  Ryan.

Mr. Fisher:  Hi, this is Ryan Fisher.  I just wanted to kind of expand and agree with most of what Chris said.  We have, they use the UDAP in Maryland, we have the DTPA in Texas.  That's the Deceptive Trade Practices Act.

But we feel that's an adequate tool.  It's more than adequate.  We're not asking for any authority.

Pretty much we implement and enforce the laws that the legislature and their wisdom pass.  It's not really our opinion to make, or you know, it's not our place to make opinion judgements based on the law.  We make fact based determinations based on each case.

But I would like to say that I think I would be very unlikely to have a job tomorrow if I suggested seeding in the authority of the state to be given to the federal government.

So, we would like for Texas to retain its authority.  We think that states should have that right to regulate the businesses that they see fit.

Ms. Buck:  Okay, Daniel.

Mr. Elkins:  I had a clarifying question for Whitney, if you could respond.  So, are you suggesting that the individual, or the school, should be responsible for finding out whether or not because of their felony that they could be, could get the certification?

Ms. Barkley-Denney:  I think that in offering a program, or a product in general, you have a responsibility to make sure that it's useful to the person that you are offering it to.  And part of that usefulness in this space is making sure, and like I said, I would be willing, though I generally am not a fan of disclosures, to talk about disclosuring this.

But I think that part of that, ensuring that the product is useful to the person that you are selling it to, includes making sure that they can use it.  That there is not something in their criminal past that is going to keep them from using it.

A lot of times, and I can just give one example.  For example, I believe this is still true, it was a couple of years ago.  In the State of North Carolina, where I'm from, you can't be a barber with certain convictions, which is ridiculous.

And I think that someone who is fresh out of, may possible fresh out of being in jail or has been sort of in that world, a lot of times may not necessarily know that the skill that they've picked up, and they now want to go to school to formalize so that they can get licensed and use it, is a profession that they're going to be allowed to practice.

So I think that in most cases the responsibility falls to the person with the most information.  And in this case, the person with the most information would be the people who have gone through the licensure for that state.

Ms. Buck:  Thank you.  Jessica.

Ms. Barry:  Sure.  I just wanted to, Jessica Barry, I just wanted to have a moment to respond to Chris' comment.

I think we can, most of us can agree that the GE DE metrics are flawed and therefore not all failing programs are turds.

Ms. Buck:  So, let's have two more comments on this and then we can go on.  We have, oh, we have --

Ms. Miller:  Three.

Ms. Buck:  -- three, okay.  All right.  So, Jennifer.  Jen Blum.

Ms. Blum:  I just wanted to clarify because SARA has come up a couple times.  SARA is at the institutional level, there is no SARA at the licensure level.

So I just want to make it, just because that has been referenced a couple of times, there is no reliance on SARA for programmatic, for the licensure.  For whether your students, once they graduate, can be licensed.

There, at this time there is no, there are some states that have of course, there actually are a fair number of professions where you can, your student, not your school, your student can waive into a state for licensure after they've been admitted into another state for a number of years.

But I just wanted to clarify because SARA has come up a couple of times, that SARA is relevant in this conversation only at the state authorization level for the institution but not at the licensure program level.  So I just, I wanted to clarify that.

And then, Whitney, I just wanted to ask you a clarifying because you, just at the very end of what you were saying, so I just wanted to make sure I understood your point.

The people with the most information on licensure, you implied that the school was licensed for, so, there's a difference between, I guess I just really want to make sure that we all are using the right terminology or that we're all clear on the right terminology.

There is state authorization, sometimes people call it state approval, but it's state authorization or state approval for an institution and then there is the licensure issue of the student once they graduate from a program.

And so actually, the ones with the knowledge, it is, I mean, I'm not trying to say that schools shouldn't have that knowledge.  But it is a very complex situation because it's not the school, again.

And in fact, I am not kidding when I say a lot of licensure boards won't even speak to you.

Ms. Buck:  So, what is your question to her?

Ms. Blum:  Well, I mean, so I just -- so, she was asking about, she mentioned those who are being licensed, and so in this context I guess I'm wondering whether you mean the student in the barber situation, was it barber, yes, in the barber situation, is it the school that you meant?  I just wasn't clear.

Ms. Barkley-Denney:  Yes.  So I did actually mean the school.  I think that, and I take your point about licensing committees, but I think in the case of most, when it comes to criminal background, that's probably actually statutory in the state, right, as far as who can be licensed and who can't.  I think in most states where I've worked it is, yes.

Ms. Buck:  Okay.  So, now let's go to John Pierre.

Mr. Pierre:  Yes, thank you.  John Pierre.  Ryan, in Texas, the DTPA, does it still allow for a private right for trouble damages by the individual student?

In other words, as I recall from a long time ago under the Separate Trade Practices Act, an individual could file his own action and get trouble damages.

Mr. Fisher:  That's for a different statute in Texas, that's the Declaratory Judgments Act.

Mr. Pierre:  Okay.

Mr. Fisher:  And that does still apply.

Mr. Pierre:  Okay.

Mr. Fisher:  Yes.

Mr. Pierre:  All right.

Mr. Fisher:  And I would just add, many states do have private rights of action in their right, but not all.  So, again, all states are different.

Ms. Buck:  So, let's have one more comment from Whitney and then we'll go to Item 2. 

Ms. Barkley-Denney:  I was just going to clarify for Dr. Pierre that UDAP varies state-by-state and some have really strong UDAPs and some have really weak UDAPs, so it would just depend on the state that you’re in.

Ms. Buck:  So, Gregory, do you want to bring us to Item 2?

Mr. Martin:  Yes.  Actually, I'd like for us to consider looking at Item 2, 3 and 4.  They're not numbered, but bulleted.  You see the three bullets there --

Ms. Buck:  The three bullets, right.

Mr. Martin:  -- as one question.  Because they really are the same thing.

And I think, we have actually already discussed a lot of this, so if there are additional comments about it, please feel free to bring those up.

But are the items which currently must be certified adequate for the purpose of ensuring that a GE program is properly accredited and/or approved by the appropriate entities, and actually preparing students for licensure, or to be able to practice in the occupation for which the program is turning them, are additional certification requirements necessary, and finally, what, if any, certification requirements should be removed?  So let's look at those together.

Ms. Buck:  So the bulleted, two, three and four together.  So there are responses to that?  Sandy.

Ms. Sarge:  Yes.  So, everything is on a, this is Sandy, sorry.

Licensure and information that helps a student in going forth with a career, whatever example we want to use, that can change at any time through different, either regulatory or statutory processes within a state or wherever you're dealing with.

So, one thing that I was, I find frustrating is, during a transition, so when something was at one point allowed and was fine and then somewhere along the line it switched the entity or the agency in question, changed their rules, that then the school goes in, finds that out, they make the new disclosures, hey by the way, you may no longer be able to get a job because they've changed things.  And then you get punished because you didn't know they were going to change it when you first put it out.

So one thing is frustrating as a, just a citizen, when I read about things and I go, well, did they even know about, they should know about.  And when they find out about it and they fix it, you've got students that went through it under the old licensure at the time they were in school, the rules at that time, and then that changed.

And now they're stuck with something that was, at the time they were in school, relevant and passed all the rules.  And then it becomes a situation where it's not, it's no longer good.

How do we deal with that and how would we, how would the, not we, but how would institutions know, be able to read the minds of the future, that that may change and now you're student is stuck with something because of a state or licensing change?

Thoughts on that across the board?  Whitney?

(Laughter)

Ms. Sarge:  I'm sorry.

Ms. Barkley-Denney:  Let's go to Jon first and then Whitney.

Ms. Miller:  John Kamin.

Mr. Kamin:  So first of all I just want to share that this discussion can be had for, had infinite because we are on the threshold for the area of licensing and certification, which in my experience is just as fascinating as higher ed, and when we (inaudible) -- No kidding, I mean for as academic, for the way, you know, academics can be somewhere dry, I look at licensing and certification as jobs ready and there is a lot of exciting stuff that goes on there, oh, and bias is part of my portfolio.

But I do want to share just an anecdote from Title 38 because I wonder what the application is for Title IV.

We had a long, we are still waging a longstanding fight over flight schools and the loophole where you can be charged an infinite amount for going up in the air and learning how to fly a helicopter.

One of the ways is we were constantly hitting the VA for (inaudible) is to tell the schools that, look, if we see you enrolling a blind veteran into a flight training program we're going to hit you for it, because he's not going to pass his medical tests to receive a license.

And I am wondering if there are common sense protections that might exist for Title IV when it comes to the (inaudible).

(Inaudible) was, you know, if you are a convicted felon and you are getting career, technical training for something that, obviously, you will never get, barring, you know, extenuating circumstances, so just if there is anything like that that exists.  Thank you.

Ms. Buck:  And do you have any opinion on whether there are additional certification requirements necessary or certification requirements that should be removed?

Mr. Kamin:  No, not at this moment.

Ms. Buck:  Okay.  Whitney?

Ms. Barkley-Denney:  Thank you, Sandy, for that interesting -- I was sitting her thinking through, okay, what's statutory versus what is regulatory, and I think, so I think with students who are currently enrolled it's a little bit of an easier question, right, because you generally have enactment dates on statutes and my, so I work in 12 States and in most of those States it is July or October, depending on what the legislature comes to, so my answer would be that that graduating class that is going to graduate after the enactment of the statute should be, you know, in line with what the statute requires as far as licensing.

For students who have already graduated I guess my question is when this happens do you see statutory retroactivity?  So does it usually say, you know, for people who are already in this field this is the license that they need or is it generally silent on that?

(Simultaneous speaking)

Ms. Miller:  Actually Johnson was next, so you'd have to --

Ms. Buck:  Okay.  Johnson, are you a lawyer, do you know that answer?

Mr. Tyler:  I am a lawyer.  I am not sure I know the answer to that question.  But I mean I view this certification in the context of less the felon trying to get the, being suckered into a pharmaceutical provision as -- I have a couple of clients who tried to get sonogram degrees and the school was not certified with the agency so that you could sit for the test and there was an exception of you had a Bachelor of Arts, which my client did not have, they were allowing you to do that, and so she went through the whole program and they're like, sorry, you can't sit for it.

Another client of mine -- There is also an exception that basically if you are not, if the program wasn't authorized to have you sit for the exam but you get the training at a hospital and a hospital sponsors you then you could get training and they had never set up that relationship with any of the hospitals.

And so those people were really stuck and there is a legal remedy for the person who has a felony who is now stuck with a loan who can't work as a pharmacist.

There is a whole provision in the discharge program for student loans designed to claw back that money and discharge that debt, but it doesn't apply unless there is a legal impediment.

So the people that are deceived in that way they really don't have any remedy.  So I view all this stuff about licensure really to sort of, I don't view it so much as a got you as more of the institution has to be cognizant of what they actually can provide to their students and whether they are, you know, actually advertising a benefit that they actually receive if they complete the program.

Ms. Buck:  And do you have an opinion on whether additional certification requirements are necessary or if any should be removed?

Mr. Tyler:  My opinion is they need to comply with the laws of the State and accrediting agencies that are applicable right now.

Ms. Miller:  Okay.

Ms. Buck:  Thank you.  Ryan?

Mr. Fisher:  This is Ryan Fisher.  I also wanted to address Sandy's comment, and I don't mean to be flippant when I say this but I think the answer is that as constant vigilance, because the elected officials, that's what they do, they change laws, they are in the change business.

And so usually there is a grandfather clause on these things that doesn't have to be.  You can write retroactive laws as long as they pass.  There is some legal tests, you know, you have to have a compelling reason and things like that.

And then the harm to the State can be justified against the harm to an individual, so you just have to always be paying attention.

Ms. Buck:  I think Mark McKenzie is next.

Mr. McKenzie:  Thank you.  Sandy, I am also going to address your question.  So from an accrediting standpoint, one, the school would have to notify the accreditor that the licensure requirements are going to change, okay, first.

Then most accreditors have mechanisms in place to deal with exceptional circumstance.  So if that would happen an accreditor would likely grant a waiver request to a school to allow those students to pick up the additional requirements without having to re-enroll.

Where it gets kind of funky is the length of time you've been out.  So if you are in a medical field and you have been out and working as an accountant for the last ten years you're probably going to have to take all that content again, but if you've been working in the field you probably are going to be grandfathered in and given credit for all that.

So there is already a framework to deal with those kinds of exceptions I think.

Ms. Buck:  I think Laura --

Mr. McKenzie:  Oh, and --

Ms. Buck:  Sure, go ahead.

Mr. McKenzie:  Just to respond to your question on certification --

Ms. Buck:  Thank you.

Mr. McKenzie:  I am not aware of additional certifications.  There may be circumstances where there are redundant certifications and I think wherever they are redundant if we could eliminate those without jeopardizing the scenario that would be really important.

Ms. Buck:  Thank you for responding to those questions.  Laura?

Ms. Metune:  Really quickly I want to second the comments that Ryan made and from the institutional perspective I do think it's on us to ensure that our programs meet the relevant requirements for our students to sit for licensure.

And then secondly I did want to say that I can think of two instances recently in California where those standards were changed and the State did allow for a phase-in, understanding that there were students in process.

Obviously, that's just two examples in one state.

Ms. Buck:  Okay, Sandy.

Ms. Sarge:  So I appreciate that because that really broadens my perspective.  The concern that, where I have seen examples is when these rules have changed and then the student, let's just try and come up with an example, you go through a 3-year program and now all the, something has changed, like nursing.

Let's say you go through a program with nursing, you become an RN, and under what we thought was a good thing and you've spent your three years and now you are in a situation where you can't get the licensing.

We have tried to prepare them -- So I guess what I am trying to say is I'd like the certifications to be specific in what we know on the day we're putting that thing out there and we would change it, right, we would change -- We do change it, but you still end up with students that get caught in the crosshairs of that and then for some reason become not immediately employable or that they would have to extend their time at school to take on additional course work so that they then could pass the licensing.

I think most of the clients that I have had would try to help the students as best they can, but I have seen it where certain big agencies that were big employers changed their rules.

First they were nationally accredited, then they said they were regionally accredited, and then -- but they didn't necessarily -- that's an HR thing.

We will look at your degree if it's from a regionally-accredited school.  It's not a licensure, it's not -- and then we got, there was a lot of hubbub about the fact that we were pushing students into degrees where they couldn't get a job.

It's like, well, first of all, they could get a job at another place but the main employer of that area changed their rules and didn't tell anybody and as soon as we found out we gave a huge disclosure about that and just said we didn't change this rule, they did.

So I am just, you know, there is two sides to, there is a minimum of two sides to every story and situations and we all have to come to the table I think with some perspective that what is the other side of each of these examples that we bring up in order to get a fair perspective of what we are trying to solve through these negotiations.

Thank you.  And thank you to everybody who enlightened me, I appreciate that.

Ms. Buck:  Mark, your name is up, do you -- Okay.  Jennifer Blum?

Ms. Blum:  I guess I just, n the certification on the licensure piece, I don't have, and I'm not asking for removal or anything, I am just thinking about like the clarifications that, and, again, it's not an approval of a program, right, so licensure programs aren't approved by anybody in advance, except for your accreditor potentially, but from a -- so it's a little bit -- so that one, you know, I am not suggesting we change it, but I am thinking that, or I'm not suggesting that we remove it, but I am thinking about some clarity around the language.

I just don't have something to propose but I do think that maybe there is a way to clarify that a little bit.  And to some (inaudible) points that Whitney made and others have made earlier, I do think that it's about, you know, whether there are promises made and how you -- and, again, I keep emphasizing the disclosure of how you explain the likelihood of licensure or the possibility of licensure as an institution and I think that's really, and that's not through a certification, that's really, you know, in the disclosure piece of how you think about, you know, how you describe yourself in terms of, yourself as institution in terms of licensure.

And then I would say there is a little bit, not in the certification piece, but as it relates to the disclosures, and in general we, you know, online is a very mobile population and so one of the things that we grapple with a lot is the fact that -- and we have a lot of students who we actually have dialogue with of, you know, because we do notify, right, where, and, you know, we get into these conversations of, you know, this State has some, you know, you are in State X and you are in this program and, you know, it's, you know, not clear, you know, there  may be issues or whatever, and they're like, oh, I'm going to move, I'm moving to Pennsylvania, you know.

So then there is like, okay, well can you tell us in writing that you are moving to -- I mean so there is, there is a lot of mobility issues around licensure, too, and, again, I am not suggesting that we not have certification, so I don't want anybody to -- and I'm not, I'm just saying this particular piece in the certification is the most, probably the most complex piece.

Ms. Buck:  Does anyone need a 5-minute break by the way?

(Off microphone comment)

Ms. Buck:  Okay, then we'll keep on, just checking in.  Let's go to Sandy.

Ms. Sarge:  So just to change the topic a little bit, you are welcome, everybody.  This is Sandy.

(Off microphone comment)

Ms. Sarge:  I know, right.  So on the, right now, correct me if I am wrong, individual CEOs have to be the one that is certified as opposed to the company or the school as whole, is that correct?

Mr. Finley:  So this is Steve Finley (phonetic) from the General Counsel's Office.  The CEO is certifying it on behalf of the institution, right, as the Chief Officer of the institution.

Ms. Sarge:  Okay.  The reason why I ask is because CPA firms who do audits and attestations and all those different types of things they sign their opinions at the company level not at the individual or partner level.

And so I just was wanting to, is that how you think of it is it's the school that's signing even though it is literally the CEO that is pressing the button?

It doesn't say Sandy Sarge, Partner of Pricewaterhouse, it says Pricewaterhouse, Pricewaterhouscoopers, but it does not, we sign as, in the CPA arena you sign as the audit firm that is doing the audit, not at the individual level.

Mr. Finley:  So it is intended to reflect that the CEO is making a diligent inquiry and is signing it in their personal capacity as the officer for the institution, so it's more than just putting the institution on the hook, but it's not necessarily a personal certification by the CEO.

Ms. Sarge:  Okay.  Thank you for that.

Ms. Buck:  Okay.  And, Chris?

CHRIS:  Just on the point that a school could disclose that a program might not lead to licensure but maybe shouldn't have to certify it.

I mean I do think that the certification is really important and just disclosing that wouldn't be enough.

I mean it's, again, it's going back to I think some of the things that have been said about kind of if you're putting forth something for a student I mean there is a certain expectation and certain implied representations that are kind of being made on the ability for a student to use that degree towards getting a license.

So I would feel strongly that, you know, and that some States have adopted laws that adopt this concept that when a program needs to result in a license in order for the person to work in that field that program should comply with the requirements of that license without just the student being alerted that, well, possibly you might not be able to obtain the license for this job.

Ms. Buck:  Thank you.  Jennifer Blum?

Ms. Blum:  I just want to clarify, I'm not sure whether that was for me or not, but I just want to clarify that I actually have been pretty explicit that we are not suggesting that you remove the certification requirement.

We are just saying the way it's worded is a little bit -- So I just want to be completely on record that we are not suggesting that you remove the certification requirement.

Ms. Buck:  So, Gregory, do you want to introduce Question Number 5?

Mr. Martin:  Sure.  This is Greg.  Are current regulations compatible with final rules regarding State authorization that were published December 19, 2016, especially as concerns institutions with multiple campuses across State lines or operating distance education programs?

I will reiterate that those rules are not currently in effect and this does, of course, presume some familiarity with what was done there, so to the extent that anybody is familiar with those rules and wants to make a comment about how the certification requirements would mesh with those rules we would entertain those comments.

Ms. Buck:  So as you indicated it would require that someone be, understand what the State authorization published December 19th was about, the final rules, but maybe there are people here who are familiar with that.  Is there anyone who would like to respond?

Participant:  I need more information.  I am very familiar with our State authorization rules in California.  Are you talking about so if an institution operates in multiple States whether or not they have to meet both the State authorization and the certification requirements?

I think I -- I don't quite understand the question.

Mr. Martin:  This is Greg.  We are referring to our State authorization, final rules that were published December 19 --

(Off microphone comment)

Mr. Martin:  Right.  About whether or not what is here is, in any conflicts with what is in those rules.

(Off microphone comment)

Mr. Martin:  And, yes, with specific reference to I believe it's 600.9, the online programs, what those rules require schools to do with respect to online programs.

Participant:  Yes.  So I just -- I think -- Let's see.  I will make a general statement and to support of the State authorization requirements and also say that in California we were able to work out solutions for our independent institutions as well as address concerns surrounding institutions that operate in multiple States.

We did not choose to participate in SARA out of concerns of whether or not it met the standards of our State level consumer protection laws.

Instead what we did was we required institutions from out-of-state that did not have a physical presence in the State of California to register and participate in our student tuition reimbursement program should they go out of business.

So I am not really sure I see the way they conflict here.  I generally support State authorization.  It has worked very well in California to protect consumers and students.

Ms. Buck:  Thank you.  Chris, do you --

Mr. Martin:  Greg again.  Well, I just want to clarify --

Ms. Buck:  Go ahead.

Mr. Martin:  -- that we are not saying they do conflict, but we're just asking people if they find any ways in which they believe they would conflict.

Ms. Buck:  Okay.  Tim?

Mr. Powers:  So, you know, just to answer the question, I don't think we, I think we'd agree that they are generally in line with what those regs are attempting to accomplish, but we've got major issues with the distance ed regs to begin with, particularly as it relates to financial responsibility.

If you are a SARA participating institution I think many of us know that if you get a 1.5 or below you are kind of in and out and that would change sort of your relationship in the disclosure and certification requirements.

And the private non-profits in particular we have significant issues with how our financial responsibility scores are calculated.

It also brings up a unique situation with California.  I think Massachusetts has now agreed to join SARA, but you know, particularly for mobile students it does raise some concerns about if a student is California one year and then moves to a different State you might have to go through this entire process once again.

So I just wanted to, because it's in the question and on the record -- Oh, by the way, this is Tim Powers, I am late in saying that.  I just wanted to put that out there for all of you.  Thanks.

Ms. Buck:  Thank you.  Jennifer Blum?

Ms. Blum:  So I am sympathetic to Tim, so I just want to second everything he just said.  And I will say, you didn't ask it here, but if you were to apply this to all programs, not to speak for Tim, but the program, the issue becomes heightened.

I mean it just becomes even a bigger issue.  So I just want to say that it does, it's a compounding problem sort of depending on who you, with which program (inaudible) supplies.

Ms. Buck:  Any other comments on this Question Number 5?

(No audible answer)

Ms. Buck:  Okay.  Then I think we are probably ready for any public comment, because we're not going to go to Item 6 until tomorrow, Issue 6 until tomorrow.

So is there any public comment at this time?  Yes?

Mr. Libassi:  Hi, there.  My name is C.J. Libassi, I am from the Center for American Progress.  I am going to read a student story collected by our sister organization, Generation Progress.

This is for Patricia Link (phonetic), who is from the Art Institute of Pittsburgh online division.  So just go ahead and imagine someone who looks nothing like me and sounds nothing like me.

"My name is Patricia Link.  I have been asked to tell you about the impact the Art Institute of Pittsburgh online division has had on my life and my concerns regarding my decision to go there.

Choosing a college is one of the most important decisions you will make in your life and it is one I did not rush into.  My family was faced with a financial crisis that dictated that I had to be able to become the primary provider within three years.

In 2007 I graduated from Thomas Nelson Community College with the intention of getting my Bachelor Degree in Art.  I studied college reviews and went on the Department of Education to get information on institutions and colleges with graphic design programs.

After doing all of this research I knew that there wasn't a local college offering a degree in graphic design but I felt like I had enough information to pick a college offering the degree through an online setting.

I never considered the government would be passing along false information that eventually resulted in financial ruin, loss of health, and a government that protects criminals over law abiding citizens.

The Art Institute said they were willing to take the majority of my credits and transfer but tuition was still obscenely expensive.

I kept putting off the decision until a recruiter called me and said he knew my husband was on disability.  He asked if I knew how long my husband had before he would take up all the time I would need to dedicate to furthering my studies, one year, two years.

I told the recruiter I could not afford the school and he reminded me that my transfer credits would reduce my tuition and said that they had many scholarships.

He also said that I qualified for government loans that didn't have to be paid until after I graduated.  He said the graduates of graphic design programs at their school make $40,000 to $60,000 a year.

I told him I was concerned with not being able to get one-on-one assistance for a program that was entirely online and he said that wasn't an issue online because instructors were there for you no matter what.

I worked with this recruiter to e-sign an enrollment agreement, forms to get the FAFSA done, and access to catch up to everyone already in class.

The next four years that was supposed to be two turned out to be one false statement after another.  During my time at the Art Institute I came to realize during my last year that they did not care about teaching you the skills you needed to get a job in the field.

This became evident when the school could no longer skirt the issue of outdated course content, failing to meet both software and technology.

The last 18 months of the school I found out the school lied to me about transfer credits, the cost of tuition, and scholarships.

Fifteen months before I was supposed to graduate my financial advisor called from the Art Institute.  He informed me that I had to pay for the rest of my degree out-of-pocket.

I said, no, I was told by an administrator there that I would have more (inaudible) for my education due to transfer credits and scholarships, I just needed the paperwork for one of these scholarships.

He said that I didn't have the scholarships.  I had to liquidate my IRA and come up with the money on the spot.

After graduation it became apparent that the only priority of the Art Institute of Pittsburgh all along was to bilk the government out of every dime they possibly could because nothing would ever happen to them when they commit fraud.  Their crime has exceeded the boundaries of financial ruin.  It has also caused physical and emotional damage.

My last two classes before graduation were resume and portfolio preparation.  I passed those with honors, just like I had all my other classes.

I thought I will have a job within three months, accounting for the wait for my diploma.  I dug right in and started sending out my resume to every job that came up on every website and local source available.

I was determined to get a good job and pay my loans back within five years by continuing to live on my husband's social security.  This didn't happen and at five months I started to panic because in a month I had to start paying my loans back.

Then in a panic I went to Craig's List to get any job.  I had stopped working while going to school because the work was too demanding to work and go to school.

I started applying for all jobs within the art field, to include a merchandiser, art stores, copyrighting, printing companies, and anywhere else I could see using my degree.

This went on for 14 months before three different prospects called to do phone interviews.  After I was passed up for a job in an interview I called back and asked do you mind if I ask why you didn't pick me, she said, I'm sorry, we don't hire graduates from the Art Institutes, and it isn't just our company, it's across the entire industry.

I asked why and she said it's because graduates lack the skills needed to fulfill the work within the industry.  Graduates fail to meet even the most basic industrial standards for graphic design firms.

I was shocked and I said I think I can meet those needs and then she said can you pass the Adobe Creative Suite test, QA print job (phonetic), build a website, use WordPress, Python, and Ruby, do you know how to run a social media campaign?

I said most of that is done by a web designer, and she said, no, graphic design and web design are and have been combined for a long time.

She said do yourself a favor, go get that training and certificates and drop the Art Institute off your resume."  And that's it.  Thank you.

Ms. Buck:  Thank you.  It sounds like a frustrating experience.  Are there any other people who would like to have public comment?

(Off microphone comment)

Ms. Buck:  Okay.

Ms. Metune:  Hi.  I am going to be reading a public comment emailed to us from one of our partners from a student, also who attended the Art Institute of California, San Diego, named Sanders Faber (phonetic).

"Like many of the people who submitted defense to repayment we were victims of a school that actively misled us about the legitimacy of its programs.

Like many we were trapped in the decision of whether we continue paying for degrees that have never benefitted from and were the product of fraud or stop paying and have our credit ruined and our wages garnished.

AI was just one of many for-profit schools engaging in this systemic fraud promoting programs for decades which did not lead to gainful employment.

I will spare you the details of my personal experience, again, because I don't want them to cloud what I am saying here.  I also stopped thinking that anyone really cares.

If you have read any of the defense to repayment submissions yet you have seen mine as well as countless others like it.  I now realize that everyone is well aware of the systemic fraud and the predatory practices that continue to make victims out of students.

Telling you about them is a waste of time.  In fact, it seems like more people in the room are defending predators rather than condemning them.

Since I spoke in person at the Neg Reg hearing last year nothing good has happened in relation to students.

Mandatory arbitration clauses still stand, taking out constitutional rights to a fair trial.  The stacks of defense to repayment submissions continue to grow and sit in limbo.

More predatory institutions have lobbyists at the bargaining table.  Student debt relief scams continue to thrive making new victims (inaudible) desperate.

The failing Art Institutes was sold to the Dream Center, yet another example of a for-profit converting to a non-profit in order to skirt regulations and accountability.

Gainful employment statistics that are there have now been watered down to a point that they are no longer effective at preventing new victims.

College scorecard statistics have been changed so that they are less impactful towards the bad actors.

Here we are a year later and literally nothing has been done.  Tell me what work has solely been done for students' benefits.  The new Administration made their values clear, they side with corporations and scam artists over students and those that would protect them.

However, I do believe that change will happen because the $1.5 trillion in student loan debt has not been addressed and continues to grow.

It is still on track for being the next major financial crisis that our nation is going to face.  Eventually we will have people in power who understand this is a crisis situation that needs their attention.

Eventually someone will understand the defenders and lobbyists for the predators have no business in determining the rights of the victims.

Eventually someone will understand that students defrauded by their schools deserve justice and shouldn't have to wait years to get it.

Eventually someone will understand that higher education in this country should be debt free and students are not a commodity.

Eventually more of us will be brave enough to consider education as a right not a risk.

Every day more of the affected people that you have thus far refused to help are banning together demanding change like this and eventually they will get it, but it's not going to happen at a committee that bickers for hours on whether or not they should even live stream the public session."  That's it.

Ms. Buck:  Okay, thank you.  Any other comments?

(No audible response)

Ms. Buck:  Okay.  So, Gregory, do you, I know we're going to be taking up Issue 6 tomorrow, is there anything you want to say at this point for people at the end of today's work?

Mr. Martin:  No, just I want to thank everybody for their hard work today and we'll see you all tomorrow and we can all look forward to concluding and going home and not having to give it too much thought until after the holidays.

Ms. Miller:  Just one quick housekeeping item about tomorrow, if you plan to bring your bags from your hotel please be aware that if it's really large it won't fit through the belt through security so they will have to go through it by hand.  Just keep that in mind.

Mr. Ramirez:  And turn in your red badges.  We'll be up here if anyone wants to make any comments to us directly.

Ms. Buck:  Okay.

(Whereupon, the above-entitled matter went off the record.)