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Committee Meetings - 01/19/22 

DEPARTMENT OF EDUCATION 

OFFICE OF POSTSECONDARY EDUCATION 

INSTITUTIONAL AND PROGRAMMATIC 

ELIGIBILITY COMMITTEE 

SESSION 1, DAY 2, MORNING 

January 19, 2022 

On the 19th day of January, 2022, the 

following meeting was held virtually, from 10:00 a.m. 

to 12:30 p.m., before Jamie Young, Shorthand Reporter 

in the state of New Jersey. 
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Committee Meetings - 01/19/22 

P R O C E E D I N G S 

MR. WAGNER: Welcome to day two of the 

regulatory negotiation. My name is Kevin Wagner, I am 

with FMCS, I'll be the facilitator for the morning 

session agenda, what we're going to go through this 

morning is we're going to go through a roll call of all 

the negotiators, the advisers and the representatives 

from the Department. And then we'll probably pick up 

with where we left off yesterday, which was the 

standards on administrative capability. We had a 

temperature check through M. So welcome. I'll go through 

the roll call, starting with the accrediting agencies. 

We have Ms. Jamie Studley- if you could justMS. STUDLEY: Present. 

MR. WAGNER: Thank you, Jamie. Dr. 

Laura Rasar King. 

DR. KING: Present. 

MR. WAGNER: Thank you. For the civil 

rights organizations and consumer advocacy 

organizations, we have Carolyn Fast. 

MS. FAST: Present. 

MR. WAGNER: And Jaylon Herbin. 

MR. HERBIN: Present. 

MR. WAGNER: Thank you next from the 

financial aid administrators at secondary postsecondary 
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Committee Meetings - 01/19/22 

institutions, Ms. Samantha Veeder. 

MS. VEEDER: Present. 

MR. WAGNER: And Mr. David Peterson. 

Okay. He's not present. Next, four-year public 

institutions of higher education, we have Mr. Marvin 

Smith. 

MR. SMITH: Present. 

MR. WAGNER: Thank you, and Ms. 

Deborah Stanley. 

MS. STANLEY: Present. 

MR. WAGNER: Next, from the legal 

assistance organizations that represent students and/or 

borrowers, we have Mr. Johnson Tyler. 

MR. TYLER: Present. 

MR. WAGNER: And Ms. Jessica Ranucci. 

MS. RANUCCI: Present. 

MR. WAGNER: Thank you. From the 

minority serving institutions, we have Dr. Beverly 

Hogan. 

DR. HOGAN: Present. 

MR. WAGNER: And Ms. Ashley Schofield. 

MS. SCHOFIELD: Present. 

MR. WAGNER: Next, we have from the 

private nonprofit institutions of higher education, Ms. 

Kelli Perry. 
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Committee Meetings - 01/19/22 

MS. PERRY: Present. 

MR. WAGNER: And Mr. Emmanual 

Guillory. 

MR. GUILLORY: Present. 

MR. WAGNER: From proprietary 

institutions of higher education, we have Mr. Brad 

Adams. 

MR. ADAMS: Present. 

MR. WAGNER: And Mr. Michael 

Lanouette. 

DR. LANOUETTE: Present. 

MR. WAGNER: State Attorney General, 

Mr. Adam Welle. 

MR. WELLE: Present. 

MR. WAGNER: And Ms. Yael Shavit. 

MS. SHAVIT: Present. 

MR. WAGNER: State higher education 

executive officers et cetera, we have Ms. Debbie 

Cochrane. 

MS. COCHRANE: Present. 

MR. WAGNER: And David Socolow. 

MR. SOCOLOW: Present. 

MR. WAGNER: Student and student loan 

borrowers, Mr. Ernest Ezeugo. 

MR. EZEUGO: Present. 
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Committee Meetings - 01/19/22 

MR. WAGNER: And Carney King. 

MR. KING: Present. 

MR. WAGNER: And from two-year public 

institutions of higher education, Dr. Anne Kress. 

DR. KRESS: Present. 

MR. WAGNER: Mr. William Durden. 

MR. DURDEN: Present. 

MR. WAGNER: And from the U.S. 

military service members veterans or groups representing 

them, Mr. Travis Horr. 

MR. HORR: Present. 

MR. WAGNER: And Mr. Barmak Nassirian. 

MR. NASSIRIAN: Present. 

MR. WAGNER: And we have the two 

advisers we have, Mr. David McClintock. 

MR. MCCLINTOCK: Present. 

MR. WAGNER: And Dr. Adam Looney. 

Okay. From the Department, from the, representing the 

Department, Mr. Steve Finley. 

MR. FINLEY: Present. 

MR. WAGNER: And Mr. Alejandro Reyes. 

MR. REYES: Present. 

MR. WAGNER: And the federal 

negotiator, Mr. Gregory Martin. 

MR. MARTIN: Present. 
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Committee Meetings - 01/19/22 

MR. WAGNER: Okay, thank you. So, 

where we were yesterday was we had got. 

MS. AMANDA MARTINEZ: I know I'm not. 

MR. WAGNER: I'm sorry, I'm sorry, I'm 

sorry. You are Amanda. 

MS. AMANDA MARTINEZ: I just wanted to 

be recognized. 

MR. WAGNER: Oh, please be recognized, 

Amanda. Go ahead. 

MS. AMANDA MARTINEZ: Present. 

MR. WAGNER: Okay, thank you, Amanda. 

Sorry about that. I'll make a note of that. Where we 

were yesterday was we were at the standards of 

administrative capability. We had a temperature check 

through Section M, so I'll go ahead and turn it over to 

Greg. And I do see that Emmanual has raised his hand. 

MR. GUILLORY: Yes, before we jump 

into the issue papers, I would like to propose to 

nominate an additional adviser to the committee. 

MR. WAGNER: Okay. And as we spoke 

yesterday, there's two things, one is that if that 

person was agreed to by consensus that they would need 

to be ready to join the negotiations and they were they 

were supposed to let Cindy Jeffries from FMCS know that. 

Has that happened, do you know? 
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Committee Meetings - 01/19/22 

MR. GUILLORY: Well, I spoke with this 

individual to confirm that they would be able to join 

immediately. And she said, yes, she would be able to. I 

think I wasn't aware that she had to contact Cindy, I 

contacted Cindy yesterday, but I have her also contact 

Cindy if we need to do that. But I know that she is 

ready and watching right now and available to 

participate. 

MS. JEFFRIES: Emmanual holding 

through with what we did yesterday with other nominees. 

I need to have that confirmed via email from the 

nominee. I did send you an email last night in response 

to your email regarding this, and I don't have anything 

from her at this point. 

MR. GUILLORY: Okay, well, we can get 

that for you as soon as possible and hopefully move 

forward with proposing the nomination. 

MS. JEFFRIES: As soon as we have it 

from her, then we can go ahead and take care of that 

business. Okay? 

MR. GUILLORY: Okay, thank you. 

MS. JEFFRIES: You're welcome. Thank 

you. 

MR. WAGNER: Then there's also 

something in the chat. Can we get a CD? Can we get a 
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Committee Meetings - 01/19/22 

resume for the proposed person get out like we did 

yesterday? 

MR. GUILLORY: Yes, I can do that, 

I'll drop her resume in the chat right now. 

MR. WAGNER: Okay. And also wanted to 

acknowledge that Jessica Ranucci will be the primary or 

the legal aid constituency and welcome. So, I would, 

should we go ahead with the thinking of consensus to add 

this adviser now, should we table this? 

MS. JEFFRIES: I'm going to suggest 

that we table it until I receive that in holding true 

with the process that was established yesterday. And 

then once I received that from her, I will we will slot 

this item on the agenda in between issue papers. 

MR. WAGNER: Thank you, Cindy, I just 

want to be sure about that. So, let's start off Greg, I 

understand we were at the standards of administrative 

capability you have the floor take it away. 

MR. MARTIN: Thank you, Kevin. Yes, 

we're still in administrative capability, and today 

we're going to pick up with M, these were the additions 

to the standards for the administrative capability. And 

we're going to pick up with M does not engage in 

misrepresentations as defined in subpart F of this part 

or aggressive recruitment as defined in subpart B I'm 
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Committee Meetings - 01/19/22 

sorry, subpart B subpart R of this part. And just as a 

little bit of background here, the last round of 

rulemaking that was in table one included regulations on 

misrepresentation and aggressive recruiting practices 

that have been proposed in subparts F and R as part of 

the Borrower Defense issue, and we proposed to include 

those misrepresentations and aggressive recruiting 

practices. Also in administrative capability, which 

would give the Department additional opportunity to take 

action against schools that have committed those 

actions. I did we did send to our facilitators, and they 

have sent to you a couple of reference documents from 

the from table one. It was the most recently released 

public amendatory text was made public on the changes to 

subpart subparts F and R. So, I just wanted you to be 

able to have that as a reference when voting on this. 

Those obviously, that was from a previous table. I don't 

I don't it wouldn't be appropriate to discuss that here 

at this table, but I did want you to have that 

information for reference. Do you understand that that's 

just what was most recently proposed for session three 

of table one? So, by no means indicative of, I don't 

believe consensus was reached on that one. So, I this is 

not necessarily the way it will absolutely appear in in 

in the notice of proposed rulemaking, so I just want you 
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Committee Meetings - 01/19/22 

to understand this the most recent text, but it's just 

for it's just for context, for all of you. I just wanted 

you to have it as we think about this. So, I'll open it 

up for any discussions on that that M. 

MR. WAGNER: Yes, we have our Carolyn 

up first. Take it away Carolyn you have three minutes. 

MS. FAST: Thank you. So first of all, 

I think it's a good idea that the Department has to 

include misrepresentations and aggressive recruitment in 

the section, and I'm supportive of it. I am concerned, 

however, that we don't yet know what the language is 

going to be that defines misrepresentations and 

aggressive recruitment because we don't yet have the 

final or even proposed rule. We just have the suggested 

language from the earlier negotiated rulemaking, and the 

reason that that is a concern to me is that if it were, 

for example, more narrow than, for example, what would 

be misrepresentation or aggressive recruitment under a 

state law that could actually have sort of a 

counterproductive effect of potentially narrowing, in 

theory the Department's discretion to take action 

against a school that was engaging in this kind of 

misconduct. So, I'm not sure exactly how to resolve it, 

but I would be a little bit concerned about voting 

without knowing exactly what the reaching consensus, 
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Committee Meetings - 01/19/22 

rather without knowing what the language is, and I 

wanted to flag that concern. So, for example, one could 

have a Borrower Defense discharge claim under state law 

standard that would include something like an abusive or 

unfair practice that could potentially be outside the 

scope of the aggressive recruitment in a language of 

whatever this rule is going to be. We don't know what 

the rule is yet, so that's my concern. 

MR. WAGNER: Thank you, Carolyn. 

MR. MARTIN: Thank you, I do, we do, I 

do understand that that I mean, the issue here is that 

obviously we will not have that rule while we're doing 

negotiations on this. And the Department does consider 

it to be an important addition to administrative 

capability. So, I do I do understand those concerns. I 

would suggest that, you know, it's true, we cannot 

guarantee exactly what the what the NPRN say. But I 

think that this does give a pretty good idea of the 

direction the Department was going and so I think that 

we know it does give a pretty good direction. I do want 

to point out that the misrepresent the misrep and 

aggressive recruiting proposed language in subparts F 

and R are not limited to BD. So, it's these are separate 

subsections of the regulation. So, it was on the table 

for BD, but not just related to BD. So do you want to do 
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want to point that out. And that's what my ask here 

would be that we look what's look at what's on these 

papers and try to make a decision moving forward because 

if we don't do that, then it really precludes any would 

preclude any vote on this issue during our table. So, I 

don't want to do that. But I don't know, Steve, do you 

want to add anything to that? I'll turn it over to 

counsel Steve. It's not Steve. Steve is not my counsel 

here. It's, I should know who my counsel is. Alejandro, 

any comments on that issue. 

MR. FINLEY: Actually, it is Steve, 

Greg. 

MR. WAGNER: Oh, it is Steve, I'm 

sorry, I was. 

MR. FINLEY: You get you get multiple 

advice here. 

MR. MARTIN: That's a good thing. 

MR. FINLEY: There's nothing for me to 

add to that. I mean, this is this is an incorporation by 

reference to a section that's not up for discussion in 

this group. So, I think the point is noted that there is 

some uncertainty about what that means, but that's going 

to be resolved through notice and comment based on the 

table one negotiations. 

MR. MARTIN: Thanks, Steve. 
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MR. WAGNER: Okay, let's see, we have 

Yael up next. 

MS. SHAVIT: Yeah, so yeah. 

MS. JEFFRIES: Yael, before you start, 

I'm sorry to interrupt you. When we did roll call, Mr. 

David Petersen was not present. I do want to make note 

that he has now joined us. Thank you. 

MR. WAGNER: Welcome. 

MS. SHAVIT: So, my concern is the 

same concern that Carolyn raised, and I do want to see 

if we can figure something out a little bit more because 

I'll tell you that it makes me very uncomfortable to 

vote to vote on basically non-existent language, right? 

It's a cross reference to a section that doesn't exist, 

and we do appreciate that this is sort of an accident of 

timing and not necessarily super avoidable. But you 

know, I have kind of two thoughts. The first is, is 

there to the extent that even having a sense of the 

Department's proposed language with the understanding 

that it's going to go through notice and comment and it 

might ultimately the final rule may not look like the 

proposed role for me, at least, having a more concrete 

notion of what the Department intends to propose would 

make me feel more comfortable voting on this issue, 

where otherwise we're really being asked to take a leap 
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of faith that seems pretty difficult, frankly, to do. 

So, one question that I had is, is there a sense that 

between now and the third week of these negotiations, 

the Department might be in a position to state more 

concretely what it intends to propose for the two 

sections that you circulated today? That's one question. 

And the other question is procedural. I realize this is 

probably a pretty aberrational scenario that we're in 

right now. Is there any kind of process by which we 

could vote on consensus with contingencies? Basically, 

noting that in the event that the cross references are 

to propose language that reads substantially like what 

was circulated today, for example. That would be the 

basis for a consensus vote and if that doesn't end up 

being the case, there's no consensus. 

MR. WAGNER: Well, all I can say about 

the concerns, we'll take the concerns back, we'll take 

the concerns back and look at them and talk about that. 

I don't know what we can, what else we can get for you 

by the time we get to our third session. So, I'm not 

going to make any promises there beyond what we what we 

have here. To my knowledge, a consensus vote is, and 

Steve can step in and correct me here, but I believe I 

don't think that there can be a contingency associated 

with a consensus vote. It's either consensus or no 
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consensus. But if Steve wants the way on that, he 

certainly may. But I can promise we'll take the concerns 

back, take a look at them, but I would like to say for 

purposes of just the just the temperature check, I'd 

like to take for this, when you know, when people have 

had an opportunity to make comments, I would like us to 

think about it in terms of what we currently have. And 

again, as Steve pointed out, what's what was happened to 

table one is not up for discussion here. We really 

cannot discuss that. I don't want to prejudice those 

proceedings or the development of regulations on those 

proceedings so that we can just look at what we have 

here because we're not taking a consensus vote today and 

I promise to take it back and see if there's anything 

else we can get with respect to that. 

MR. WAGNER: Okay. Thank you, Greg. 

Barmak, you are up next. 

MR. NASSIRIAN: So, I share the 

concerns of Yael and Carolyn, but I also take the point 

that Greg just made that we cannot renegotiate the 

misrepresentation reg at this proceeding. But it seems 

to me that one of my complaints about the proposed 

language is the meek is the overall meekness of it. When 

I look at the statutory language, the statutory language 

says that the Secretary is authorized to establish 
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procedures and requirements relating to the 

administrative capacities of institutions of higher 

education, including consideration of past performance 

of institutions or persons in control of such 

institutions with respect to student aid programs. 

Sounds to me like if there was state action associated 

with the institution's conduct that that very much 

relates to the past performance of the institution. And 

that's the way of addressing whatever the 

misrepresentation regs may end up being at the federal 

level, along with any state action. So, I suggest that 

we need to expand this language. It shouldn't focus, you 

know, this kind of cherry picking of misconduct is 

problematic. I think any kind of bad behavior that that 

raises alarm ought to be included here. And candidly, I 

think it actually has to reach the person in addition to 

the entity itself. So, I suggest that we need some 

language to expand this to include other modes of bad 

past performance. In my book that would also include 

institutional collapses, institutions that have that 

have precipitously closed on students. You know, there's 

very little to go after at that point, but it seems to 

me that at the least, we can exclude the individuals 

involved with such institutions from being qualified to 

do it again under a new corporate banner. 
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MR. MARTIN: Thanks, Barack, if you 

have if you have a language you want to add, I'm not 

certain if you're proposing another paragraph or you 

want to add something to M? 

MR. NASSIRIAN: I'll submit I'll 

submit language. 

MR. MARTIN: Yeah submit some language 

to us, we'll take a look at it. But thanks for your 

comments. 

MR. WAGNER: Brad, you're on deck, go 

ahead. 

MR. ADAMS: Thanks, good morning. I 

agree with Carolyn. Our concern is that the aggressive 

rule making definition has not been defined. But in 

addition, I also have concerns that the word substantial 

was left out in front of the word misrepresentation. The 

Department is already authorized to take action against 

an institution that engages in a substantial 

misrepresentation, and that's because the substantial 

misrepresentation requires that a person could have 

reasonably relied on the statement to their detriment. 

And a simple misrepresentation, in contrast, was any 

statement made by an employee of an institution to any 

member of the public that has the likelihood or tendency 

to mislead under the circumstances. Does not matter if 
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that was intentional or inaccurate, and there is no 

requirement that a reasonable person could have relied 

on it or that it would have harmed them if they had. I 

would like to ask the Department why did they not 

include the word substantial in this wording? 

MR. MARTIN: Well, in thinking about 

this again, when you put it in the context of this is an 

administrative capability and note that the language 

does say, does not, does not, does not say, does not 

engage in a misrepresent in a in a misrepresentation as 

defined in support effort says does not engage in 

misrepresentations. What we're looking at with a with 

any type of administrative capability standard is, you 

know, does the school engage in a pattern of 

misrepresentation? And I think what you said is how you 

characterize it is correct. You know, per what's in 

subpart F, here we're talking about that, even if these 

are misrepresentations and not substantial 

misrepresentations, we believe that the consistent their 

occurrence on a regular basis does weigh on a 

determination of administrative capability. 

MR. WAGNER: Jessica, you have your 

hand up, your next. 

MS. RANUCCI: Thank you. You know, I 

think from my perspective, again, as a legal aid 
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Committee Meetings - 01/19/22 

practitioner, I see people all the time who have been 

the victims of misrepresentations by their colleges. And 

I think that it's really important that we keep this 

definition of misrepresentation as broad as possible. 

And I think just one example of why it might be 

important is that often we've seen this representations 

in generally applicable recruitment practices. You know, 

there's a school where we saw a bunch of students 

enrolled in here in New York City that would like drive 

a van around the city and would hand out fliers or say 

things in the van that weren't necessarily on their 

website. And I think it's important to give regulators 

like the Department flexibility to identify any 

misrepresentation regardless of without having to focus 

on the proof of the individual reliance piece, and I 

think, you know, not to suggest this is what you're 

saying, but I think none of us want to see any 

institutions make any misrepresentations, and I think 

that that's really what our focus should be on. 

MR. WAGNER: Okay, Greg, are you ready 

for a temperature check on this particular on M? 

MR. MARTIN: I am, and I just want to 

remind everybody that I would like to, I mean, obviously 

everybody comes at it from their own perspective, but 

take that temperature check in view of what we've said 
 

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with, you know, what we currently have for subparts F 

and R understanding that this is not a consensus vote. 

Thank you. 

MR. WAGNER: So this will be for F and 

R and M? 

MR. MARTIN: I'm just I'm just saying 

that when they vote, when they take the temperature, 

check on M, just do it in recognition of what we 

currently have for F and R understanding, that's not 

final on the rules, but it's the best, it's all we can 

all we can go on right now. So, we're just doing it on 

M. 

MR. WAGNER: I do see that, Debbie; 

you do have your hand up. Do you have something you want 

to add? 

MS. COCHRANE: I did thank you. I just 

wanted to flag I had put up a potential suggestion in 

the chat, which was the option of including language, 

including but not limited to. 

MR. WAGNER: Thank you for that. I 

would also make a quick note before we take the 

temperature check just to encourage the negotiators, I 

know we have a limited time, and we want people to have 

comments if there are specific questions that may make 

sense to put those in the chat and that would help move 
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Committee Meetings - 01/19/22 

things along. So that being said, if we go ahead and 

take a temperature check with thumbs for M and hold them 

high so we can see them that would be appreciated. 

MR. NASSIRIAN: I'm sorry, can I ask a 

clarifying question? What are we I know it's not 

binding, but honestly, I don't even know what we're 

voting on. What are we voting on? The language as 

written, the language as contemplated in each individual 

negotiator's mind, I just don't know what the what the 

value is of. 

MR. MARTIN: It's just simply a 

temperature check of where the group is on, remember, 

though, I mean, we're looking at we're not, the only 

reason I gave I provided what was in in what came from 

table one with respects to with respect to subparts F 

and R is to give you some context. We're not we're not 

voting we're not we're not voting here we're just taking 

a temperature check. From what's here. What's just 

strictly what's an M? That's it. As it's written here. 

MR. WAGNER: Amanda. 

MS. AMANDA MARTINEZ: I think just so 

I'm also I'm also understanding clearly how this 

impacts, because you said Greg, to view this part of 

this issue paper currently view this from a perspective 

without the papers that you added to us subpart F and R 
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Committee Meetings - 01/19/22 

to view this only solely as the regs, as they are in 

place and the definitions that we have currently and 

take those new editions out. So now it's kind of like 

there's theory here. Where was the was the Department 

viewing and adding this language from that perspective, 

as well as looking at, okay, this is the definition that 

we have currently not being influenced by the new 

definitions that were discussed in a previous 

negotiation in the new potential regs. Were they 

actually doing it from that perspective? And that's why 

they viewed, that's why they included this line to add 

an additional, they view this as a tool to solve a 

problem. I'm just trying to understand the Department's 

thinking in was that their actual perspective? 

MR. MARTIN: No. What this is about, 

no, I'm not, we absolutely did propose this rule here in 

view of what we did at the previous table, at the table 

one with subpart R and subpart F. So no, they're not 

they're not disassociated. We had that in mind. What I'm 

saying is that there are no existing regulations. 

Subpart R is entirely new. The changes we made at the 

subpart F again came from table one. They're not in 

regulation yet, so we did, it's kind of an odd 

juxtaposition, as Steve pointed out with doing it this 

way. But so no, I'm not telling you to forget about what 
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you read, just to understand you're not voting on that 

or, you know, you're not giving a temperature check 

rather on that, you're giving a temperature check and 

what's in M. And you know, I was just trying to make 

people assuage people with respect to the to the other 

regs. But you're not I don't want you to, yes, we did, 

they are connected the proposed rules there and or that 

amendatory text and what we're looking at here. But 

nothing we're doing here affects those, those rules. Or 

proposed what's proposed rather, what will be proposed 

in the NPRM, I should say. 

MR. WAGNER: Kelli, you had something 

to add? 

MS. PERRY: Yeah, just a question. 

What outcomes can the Department gain by having it here 

as well as having it in F and R? Like, is there 

something else that you would be able to achieve by 

having it here if it's already in those other two 

places? 

MR. MARTIN: Well, recall that, you 

know, or I would rather I would have people note that 

that what's an administrative capability is often 

reflects rules that are elsewhere in the regulations. 

This is this is a separate, you know, when we talk about 

adding capability, it's not a finding the Department 
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Committee Meetings - 01/19/22 

often makes, it's we usually make it in conjunction with 

other serious issues of the school has. So, these just 

reflect on the administrative capability of an 

institution. So, it's quite common in these if you were 

to look at break down all these rules that they that 

they are all referencing other areas of the regulations. 

So yes, we'll have we would still have what's in those 

in those subparts if we didn't include it here. But it 

allows us to if we're making a forming and analyzing, 

does the school have administrative capability, it folds 

that in. 

MS. PERRY: But I guess in addition, 

that's understood, but I guess in addition to that, what 

would there be a different outcome if it was in the 

administrative responsibility section and not in as 

opposed to being in the others for the school? 

MR. MARTIN: Well, the outcome would 

be so, you know, any compliance action if the school, if 

we were to note that an institution they would be, they 

would obviously the finding would be with reference, for 

instance, what is in subpart F or what is the subpart R. 

But if the Department was making an overall finding of 

administrative capability, in addition, if there was an 

administrative, if there were an admin capability 

finding it would be an addition to those other, those 
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other, those other findings. So, it would allow us to 

make that assessment of the school is not 

administratively capable. 

MS. PERRY: Can I ask, I'm sorry, can 

I ask it one more way? So, from a school's perspective, 

whether they have a finding as it relates to 

administrative capability or they have something that's 

in R and F, what does the school need is what the school 

needs to do to rectify those things different, I guess, 

is my question? Or is it the same? Because ultimately, 

it's the same finding. 

MR. MARTIN: Generally not. But 

understand that we would likely not for one, if there 

was just that issue. When we do administrative 

capability, generally, there are other issues involved 

which we make the determination of administrative 

capability. So, if you had a finding of administrative 

capability, the chances would be that there were many 

other things that went into that that determination. But 

as far as resolving the finding related to 

misrepresentation or aggressive recruiting, no, that 

would be that would probably be the same the same 

process you would have to have to go through. 

MR. WAGNER: Sam and then Steve. 

MS. VEEDER: Thank you, so let me let 
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Committee Meetings - 01/19/22 

me see if I'm understanding this correctly or maybe ask 

it a little differently because I think we're kind of 

down this rabbit hole a little bit. And I'm wondering 

and based on Kelli's question, does it matter? Do we 

need to go here? I mean, the definitions in subpart F 

and R are going to happen through that other process and 

we have no control of it. They're going to be what 

they're going to be. We're just simply cross-referencing 

here to whatever that is. So maybe that shouldn't hold 

us up from this decision here because that decision is 

already made separately. 

MR. MARTIN: Well, let me, you know, I 

think I'm going to turn it over to Steve, he wants to 

make a comment and maybe Steve can approach this from a 

little bit of a different angle. Go ahead, Steve. 

MR. FINLEY: Yeah, thanks, Greg. So, 

often when the Department is citing multiple violations 

of different regulatory requirements, we do reach the 

conclusion that the institution lacks administrative 

capability. When we see recurring patterns of 

violations, they tie together and it's a pretty 

straightforward assertion that there's a failure of 

administrative capability at an institution. Some 

practices are so essential to the institution's duties 

to administer federal student aid funds appropriately 
27 

Committee Meetings - 01/19/22 

that we want to just establish in the regulation that a 

violation of a provision like the aggressive recruiting 

or misrepresentation itself constitutes a separate 

administrative capability violation. It is a shorthand 

in a way because the department could do a more 

extensive documentation to tie the points together. But 

by doing it in the regulations, it's clearer that this 

is a central responsibility of the institution and it 

can be a separate violation when you've got of the 

administrative capability requirement. I hope that 

helped. 

MR. MARTIN: Thank you, Steve. I'd 

kinda like to move ahead and take the take a, you know, 

take a little bit of temperature check, here we are. I 

don't want to cut off anybody at all, but we are we are 

somewhat pressed for time, so. 

MR. WAGNER: Yeah. Could we go ahead 

and yeah, sure. Can we go ahead and take the temperature 

check on M with a show of thumbs and hold them high so 

we can all see them, that would be appreciated. Don't 

see any, there is a thumbs down and there's one thumbs 

down. Would you care to say anything about why that is a 

thumbs down? Is there anything that could change at this 

point or will that be something that you can put in 

writing for later? 
 

28 

Committee Meetings - 01/19/22 

MR. ADAMS: Yes we proposed 

definitions in the last rulemaking, we've yet to hear 

back from the Department on those comments. So really, 

it's just the fact that we don't have a solid definition 

unit to review, and that's the concern. I'm not sure 

what I'm temperature checking on at this point. 

MR. WAGNER: Okay, thank you, thanks 

for that. I do see that Jessica; you have your hand up. 

MS. RANUCCI: Yeah, I just, you know, 

I think there are two issues for the Department to take 

back on this now that you made us do a temperature 

check. One is, what's your plan going forward with 

respect to the regulatory language here, and it sounds 

like maybe this is all we're ever going to get and like, 

you're going to make us do on that. But I think trying 

to figure out if there's any other option would be great 

because I think there's a lot of discomfort among this 

group of approving a section that's exclusively a cross 

reference to a section that doesn't exist. And then I 

think the second one is just to put a finer point on 

this question that other people have asked me over and 

over, which is what the utility of this language. And 

I'm obviously, as I've said, I'm all for this. I think 

it's super important I want to protect students, but I 

think without a clear explanation of how this language 
29 

Committee Meetings - 01/19/22 

helps us do that, it's hard to understand why this is an 

important thing that we need. That being said, I'm all 

for the Department [inaudible], but I think like the 

Department coming with those two things next would 

really help us. 

MR. MARTIN: Thank you, and I think, 

you know, we've heard that and obviously we have some 

work to do before the second session, and we'll take 

that back and see if we can, you know, if we can get you 

something else in advance of that. Thank you. 

MR. WAGNER: Just as a as a 

housekeeping, we do have confirmation from Ms. Menditto, 

so it might make sense at this point to ask for any 

comment or and then take a consensus, whether we, you 

know, whether she should be added as part of the 

negotiations. So, we know we'd get to that, but we do 

have the confirmation while we have time and we're right 

finished with one, we want to try to jump in and figure 

out what that is. So, I know Emmanual had put that 

forward. Is there any I see Emmanual jumping on you can 

go ahead and have the floor. 

MR. GUILLORY: Thank you. So, I would 

like to officially nominate Sue Menditto for an 

additional adviser role. Obviously, this role is not a 

voting role, so she won't be a part of the voting 
30 

Committee Meetings - 01/19/22 

committee, but she will be able to advise us. I think it 

will be very important and she will be a great resource 

for us when it comes to financial responsibility. That 

issue can be very weedy and so if we have certain 

questions that may be difficult for even the Department, 

maybe to answer, I think Sue from her experience would 

be able to just be a valuable resource for us. I know 

that the first time the Department did advisors was the 

most recent negotiated rulemaking session. And so, I 

think that this is still new and having this additional 

advisory role will only help us and not harm us. So, if 

you have not gotten a chance to read the bio that I put 

in the chat, I just want to quickly go through who Sue 

is. So, Sue Menditto she works for the National 

Association of College and University Business Officers, 

which is also known as NACUBO, and she's the expert on 

accounting standards, financial accounting and 

reporting, managerial analysis and financial viability. 

She has been with NACUBO for 19 years and is charged 

with fulfilling higher education advocacy needs with the 

Governmental Accounting Standards Board, which is GASB, 

the Financial Accounting Standards Board, known as FASB, 

and the Association of International Certified Public 

Accountant AICPA in the Department of Education, 

actually. As such, she is considered one of the foremost 
31 

Committee Meetings - 01/19/22 

experts on the federal financial responsibility 

standards, and her presence on this negotiating 

committee is essential to positive outcomes for this 

topic area. She has represented higher education on the 

Governmental Accounting Standards Advisory Council from 

2006 to 2012 AICPAs Revenue Recognition Task Force from 

2016 to 2017 and Department of Education's Financial 

Responsibility Subcommittee in 2017 2018, where she de 

facto became a leader of that particular subcommittee in 

helping them formulate what the language was that we saw 

in the 2019 Borrower Defense regulations. So, with that, 

I'm happy to take any questions or we could just move 

forward to the consensus vote. But I think she'll be a 

great addition to help us. 

MR. WAGNER: Jessica. 

MS. RANUCCI: Yeah, just a quick 

question, are you proposing that she's an adviser just 

on a financial responsibility piece or on the whole neg 

reg? I don't even know if that's an option. I just 

thought you mentioned specifically financial 

responsibility. 

MR. GUILLORY: Yes, I'm proposing just 

specifically financial responsibility. 

MR. WAGNER: Brad, you're up. 

MR. ADAMS: Yeah, so, you know, I'm 
32 

Committee Meetings - 01/19/22 

just curious, I don't know Sue, but I know we do have 

Dave McClintock on as an accounting advisor for this 

committee, so I'm just not sure how her background, I'll 

be it, she is in a public accounting background, how 

it's different than Dave McClintock's and what 

additional value she may add? 

MR. GUILLORY: So, I would say the 

additional value that she brings is from her experience 

of being a negotiator before from her 19 years of 

working with institutions of higher education, 

specifically and knowing directly what their needs are 

and a more grassroots level. And being able to bring all 

of that experience with her in her knowledge of 

financial responsibility solely beyond just the 

composite score calculations and figuring out what those 

aspects are. But I think having that additional voice 

and knowledge will only be a benefit to us because when 

we get to that topic, it is indeed very weedy. And I 

know the Department has indicated they don't want to 

really discuss the calculation of the composite score at 

this moment, but that will that conversation will come 

up with, you know, at some point in time. And I just 

think it will be helpful for us to be able to reference 

her if we need to. 

MR. WAGNER: And I agree that 
33 

Committee Meetings - 01/19/22 

discussion around composite score is going to be 

important. Still, not 100 percent sure the value in 

addition to Dave McClintock, but always open to 

additional resources from accountants. 

MS. PERRY: Brad, if I could just 

interject there. With him representing from the from an 

auditing and accounting perspective, Sue really brings 

knowledge of financial responsibility, specifically with 

all the negotiations that we did in 2019 or 2018 I think 

it was. So, she has more I think she has more experience 

there in this specific conversation that we will be 

having as opposed to auditing from a general 

perspective. 

MR. ADAMS: Thank you, Kelli, that's 

helpful. 

MR. WAGNER: One point of order real 

quick, is that when people raise their hands, they'll be 

called on it in the order that they're putting their 

hands up. So, I just want to let everyone know that 

Jamie had her hand up. Just going forward and I 

appreciate the comment, but we want to try to keep 

things orderly. So, Jamie, you're up next and then 

Barmak. You're on mute, Jamie. 

MS. STUDLEY: I'm just wondering if 

the if Cindy or the Department can explain how we use 
34 

Committee Meetings - 01/19/22 

advisers? Because there are lots of complicated topics 

where we go back to others who know issues, I'm not 

taking a position yes or no on this one. This might just 

be a good moment to explain. Do we call on advisers? 

Does the Department or the facilitator call on advisers? 

Do they say, I have something I want to offer, even if 

we didn't think of calling on them. I'm just trying to 

think how that will affect the process, and it is a 

complicated topic. There are many like that where we're 

expected to sift or bring the thoughts. So, in order to 

make a smart decision about this, I could use some 

background. 

MS. JEFFRIES: Greg, do you want me to 

field that? 

MR. MARTIN: Yes, please go ahead. 

MS. JEFFRIES: Okay. Alright, so the 

role of the advisers is to assist the committee. Right. 

They are there for you to ask for information, data, 

analysis, whatever it is you need and those give your 

request would be sent to me. I will send them to the 

advisers. You're free to ask questions and have dialog 

with the advisers during session. Most generally, they 

will need time to compile any information you ask for. 

So we ask that you would either put that in the chat and 

or send it to me so that I can send it on to them. When 
35 

Committee Meetings - 01/19/22 

they have that, they'll come, they'll have the ability 

to speak and present whatever information they're able 

to obtain for you. Feel free to engage them, that's what 

they're there for. They're there for you to be able to 

get the information and that you need to have this. And 

I know the Department, as with the last neg reg and this 

one put a lot of thought into how best broadly to assist 

you with a full, you know, people who have a full range. 

And so, as I understand Emmanual, he's suggesting an 

additional financial adviser be invited or added to the 

committee. Financial advisers or any committee when 

they're added committee members added both in the 

beginning or at this point are expected to participate 

fully in the negotiated rulemaking and be available to 

get you the information that you need. Okay? They're 

your resource. You are free to talk with them, you are 

free to meet with them, you are free to send them 

written requests, verbal requests during session, 

however you need to get the information. Does that help 

Jamie? And the committee? Alright. 

MR. WAGNER: Greg, go ahead. 

MR. MARTIN: Sorry, I didn't hear the 

last comment. 

MR. WAGNER: I just you had your hand 

up or were you. 
36 

Committee Meetings - 01/19/22 

MR. MARTIN: Oh, thank you. Yes, I 

have a hand. Indeed, I did. I didn't. I just want to 

say, you know, from the Department's perspective, we 

certainly do not, we do not oppose the addition. But I 

want to make it clear with respect to financial 

responsibility that the Department will not entertain 

adding composite scores to our discussions on this 

table. Is not to suggest that we don't think the topic 

is important. We certainly do. We understand that the 

current composite scores go back a number of years, and 

we are looking at the we are looking at them and looking 

at the possibility of adding that to a future to a 

future table. But we just don't have the wherewithal to 

do it now. And those of you who were around at the time 

know that in advance of the of those rules of the rules 

where we put composite scores into place that we had a 

fairly substantial analysis done by a large accounting 

firm. And you know, there was a lot of preparation for 

that that has not been done in advance of this of this 

table. So, this is not to say that I don't believe that 

this individual could add expertise in a lot of 

different areas. I just wanted to make it clear that the 

Department is not considering putting deposit scores on 

this table. Thank you. 

MR. WAGNER: Thank you. Barmak, before 
37 

Committee Meetings - 01/19/22 

we get to you real quick, I do see Johnson with his hand 

up, I just wanted to let everyone know that he is 

switching out for Jessica Ranucci for the legal aid. 

Okay? So Barmak, take it away, you have the floor. 

MR. NASSIRIAN: Yeah, I don't quite 

know how I feel about this, primarily because an, you 

know, an essential qualification of an adviser beyond 

technical expertise, which Ms. Menditto certainly has is 

independence. And I kind of worry about. And in fact, 

you know, the fact that she was herself a negotiator 

sort of speaks to the fact that she represented a 

sector. She represented a stakeholder in previous 

conversations. The thought sort of went through my head 

when Brad brought up the availability of Mr. McClintock 

to address financial responsibility, I have the same 

concern. A perfectly needy of expertise. But I worry 

about expertise sort of bleeding into normative 

recommendations that are not necessarily objective, that 

are simply that represent a very sophisticated technical 

presentation of a point of view rather than of basic 

facts. So, this is a little vexing, quite honestly. 

MR. WAGNER: Anne? 

DR. KRESS: I would underscore 

Barmak's comments. I also want to go back to, I thought, 

where Jamie was going, which is that there are lots of 
38 

Committee Meetings - 01/19/22 

complicated issues that we're going to face and as our 

discussions just over a day and a half have already 

shown. So, I do think, you know, we've got advisers, we 

also are all here. We've been selected as negotiators 

from specific constituencies. We can draw upon those 

constituencies for information as well. I'm just 

hesitant about going down a road where we begin to add 

adviser after adviser on specialized topics. I don't, 

that just strikes me as not the spirit of what we're 

trying to do. 

MR. WAGNER: I was just want to I see 

Johnson in the queue, and then once Johnson has given 

his comment, we're going to go ahead and take a 

consensus on adding Ms. Menditto. Okay? So Johnson, 

welcome and you have the floor. 

MR. TYLER: Hi, thank you. You know, I 

often hear from my clients that, you know, the process 

is opaque, they don't understand it. And they have a 

point of view, and I feel like getting experts into the 

this sort of issue of, oh well, the institution has to 

do this and this and this and that. I kind of am worried 

that it's going to become a discussion about why an 

institution cannot do something. They have 

representatives here at the table on that issue. I'm 

not, I'm sure this person is very qualified and knows a 
39 

Committee Meetings - 01/19/22 

lot of stuff. But I at this late, I wouldn't say late 

stage, but I just don't understand her role completely 

here other than as Barmak said, to be an advocate of a 

position. And I think there are plenty of advocates at 

the table here to represent that position. Thank you. 

MR. WAGNER: Thank you, Johnson. So, 

we're going to, Greg do you think it's a good idea to 

take the consensus check now? 

MR. MARTIN: Yes, I do. 

MR. WAGNER: Okay, so if everyone 

could vote with their thumbs as we've done before and 

hold them high on adding Ms. Menditto as an advisor for 

specifically the financial responsibility, that'd be 

great so we can see them all. Okay, we have several 

thumbs down, so Ms. Menditto will not be added as an 

adviser. Thank you. Thanks for going through that 

discussion. So, I'll turn it back to you, Greg. Where 

would you like to go next? I know we just finished M. 

MR. MARTIN: Right. Thank you. I 

almost lost track of myself during the whole discussion 

there. But yeah, so we're going to look at that 

paragraph T. We're talking about was former paragraph P 

developing and following adequate procedures to evaluate 

the validity of a high school complete of a student's 

high school completion if the institution or the 
40 

Committee Meetings - 01/19/22 

Secretary has reason to believe that the high school 

diploma is not valid or was not obtained from an entity 

that provides secondary school education. I want to 

point out that we have what we're doing here is 

proposing clarifications to existing regulations that 

are related to the validity of a student's high school 

diploma to address some gaps we've seen with the actions 

of unscrupulous institutions. Specifically, we are aware 

of institutions that intentionally look the other way or 

arrange for diplomas with what might be referred to as 

diploma mills that are definitely not valid. These 

proposed rules would clarify how institutions must 

evaluate those diplomas, including obtaining 

documentation from the school, such as transcripts, 

written descriptions, of course requirements or written 

statements from the school. The proposed rules also 

specify when a high school diploma will be considered 

invalid. Specifically, we propose to clarify that a 

diploma is not valid if it does not meet the state's 

requirements or is not recognized by the state. If the 

Department of State or Court has determined the 

credential invalid and or diploma was obtained from an 

entity that requires little or no education or 

coursework to obtain the diploma, including through a 

test that does not meet Department requirements for a 
41 

Committee Meetings - 01/19/22 

GED or equivalent of a high school diploma. So that's a 

little background for it. Let's walk through the change 

itself. You can see here that we mean we've retained the 

most of the language from the existing regulation 

existing paragraph P we have added develops and follows 

adequate procedures, and we are now defining what those 

adequate procedures must be. So adequate procedures to 

evaluate the validity of a student's high school diploma 

high school completion must include obtaining 

documentation from the high school that confirms the 

validity of the high school diploma, including at least 

the following, and remember that all of this what 

precedes all of this is that these are procedures to 

evaluate the high school diploma. If the institution or 

the Secretary has reason to believe that the high school 

diploma is not valid or was not obtained from an entity 

that provides secondary school education. This is not a 

requirement to for schools to collect high school 

diplomas in every instance. So given then that what that 

language is in T let's look at what the adequate 

procedures are. The obtaining documentation from a high 

school that confirms the validity of a high school 

diploma would include one of the following other 

transcripts written descriptions, of course 

requirements, or written and signed statements by 
42 

Committee Meetings - 01/19/22 

principals or executive officers at the high school 

attesting to the rigor and quality of the coursework at 

the high school. And if the high school is regulated or 

overseen by a state agency confirming with or receiving 

documentation from that agency that the high school is 

recognized or meets requirements established by that 

agency. And lastly, a high school diploma is not valid 

if it is not recognized or does not meet the 

requirements established by the appropriate state agency 

in which the high school is located has been determined 

to be invalid by the Department, the appropriate state 

agency in which the school was located or through a 

court proceeding, or was obtained from an entity that 

requires little or no coursework to obtain a high school 

diploma, including through a test that does not meet the 

requirements for the recognized equivalent of a high 

school diploma found in 34 CFR 600.2. So that's the 

those are the proposed rules. I'll open the floor for 

comments questions. 

MR. WAGNER: Okay, I see Amanda, you 

are on the clock. Go ahead. 

MS. AMANDA MARTINEZ: I just have a 

procedural question before, but I do have questions on 

this part. But just another procedural question, if we 

do have questions on sections of this issue paper that 
43 

Committee Meetings - 01/19/22 

we've already passed on. When is the appropriate time to 

bring maybe that discussion up or that question up? 

Would it be now before we get into another issue? And is 

there allowable time? So that's my first question. My 

second question on this issue in particular, is, this is 

a just a clarifying question, these procedures are 

mostly are can you confirm with me if they're mostly 

done the burden is on the institution. I'm wondering 

what that if the education department understands how 

institutions receive this information like, is it mostly 

on their burden to communicate with high schools and 

work with work with high schools to receive this these 

processes? Or is it really the institution working with 

the student and kind of pushing these regulations onto 

them to then conduct most of the work, to then go and 

work with their high schools and conduct all of this 

basic, you know, basically, the student is really doing 

all the work to ensure these federal regulations and I'm 

wondering whether there's understanding or experience of 

who's the burden facing this. I know that the 

institution has to provide the information, but really, 

what's happening on the ground of who's the burden of 

ensuring this information is being provided to the 

education department? 

MR. MARTIN: To your first question, 
44 

Committee Meetings - 01/19/22 

as far as if there's something we've discussed 

previously, I don't I don't want to preclude discussion 

of something we've done over previously. But as you are 

aware, we have a pretty full agenda and I'd like to get 

through and try to get through our agenda. If you have 

specific questions, you can feel free to or comments on 

something we've previously discussed. You can feel free 

to submit those to the facilitator, and we certainly 

will make every effort to answer them or to or if 

there's something you want us to include on table two. 

I'm sorry this is table two. Session two of table two. 

But I at this point, I don't think we have the time or 

resources to go back and revisit areas we've already 

touched. But I don't, certainly, if you have a question 

about something, feel free to feel free to submit it. If 

there is time at the end of this week and we do have 

time to go back, I have I have no objection to that. 

Regarding your question about the high school diploma 

and whose responsibility it is. So, and this hasn't 

changed, you know, and if a student indicates on the 

FAFSA if he or she has a high school diploma, that's 

essentially a self-certified question, there's no 

database against which that is checked. We don't we 

don't require institutions to collect high school 

diplomas for every student. Some schools do, obviously 
45 

Committee Meetings - 01/19/22 

schools and schools that depends on how schools admit. 

Many institutions are going to get the transcripts and 

final transcripts for every student that goes to the 

institution. So, they will have that as a matter, of 

course. What we're talking about here is, again, those 

instances where there's reason to where the school has 

reason to doubt the validity of the high school diploma. 

So, the school and the school would have to validate 

that by obtaining documentation from the high school now 

as far as the burden the who burden falls on, there's no 

I mean, so the rule would be that we're so in an 

instance where an institution has reason to question a 

student's high school diploma or whether that student 

has a high school has completed high school. They would 

obviously approach the student about that. There would 

be no requirement here, a school could certainly assist 

a student in trying to obtain that documentation, but 

there's nothing in these regulations that would require 

the school to do this. The school would be required to 

obtain that documentation through some means, whether 

it's the students applying it or if they want to go get 

it themselves. But the burden of to the institution 

falls on them to say this is this is not valid for these 

reasons, or we can't or we don't know, we have reason to 

question the validity and if they need these things that 
46 

Committee Meetings - 01/19/22 

are written here, transcripts, written descriptions. Of 

course, the school could always go out and request that. 

But I think in most of these cases, there probably would 

be student involvement in trying to obtain and trying to 

obtain this. And that's because the student was unable 

to present something that indicated that what he or she 

had was a valid high school diploma. And I get I totally 

get that that could be that could be difficult, 

especially for students who spent a lot of time since 

they've been in high school. Maybe they've moved around 

a lot and don't really even remember where that was, but 

where what we do feel that there's a compelling need 

where this is in doubt to obtain this information. 

MR. WAGNER: Before I get to you, 

Barmak, I'm going to ask Cindy Jeffries from FMCS. She 

has something she'd like to add. 

MS. JEFFRIES: Yeah, I just want to 

add to what Greg said about going back and addressing 

things that we've moved on from. I want to remind the 

negotiators that this is week session one. The goal here 

is to get through all of the issue papers to try to have 

some meaningful dialog session two that is going to 

continue. So, all of these issues do get circled back to 

provided that we can get through them initially. And 

then week three generally is where most of the consensus 
47 

Committee Meetings - 01/19/22 

takes place. If not, I mean, it could take place a 

little before. If you have some that you think, clearly 

you're ready to move on. And so there will be more times 

to address these and have conversation about them, 

especially as we progress with updated reg text that 

comes from the Department. Based on things that you 

submit to them. So, if you do have questions that you 

want us to forward to the Department, please feel free 

to send them to me as well as we encourage you to put 

your proposals in in text, and the Department prefers 

that you utilize word to do that. And forward those to 

me and we'll get them to the Department so that they 

have ample time to look at that and see whether or not 

they can incorporate things into their next round of reg 

text that they'll be presenting. So, I hope that 

additional information is helpful. 

MR. WAGNER: Thank you very much, 

Cindy, appreciate it. Barmak, you have the floor. 

MR. NASSIRIAN: So, in a previous life 

when I used to do admissions policy, we dealt with the 

problem from hell that is high school diploma mills. So, 

what I can tell you is that romanette one under (t)(1) 

is utterly meaningless. Because a diploma mill will 

provide you spectacular transcripts. They very typically 

have very extensive course listings and course 
48 

Committee Meetings - 01/19/22 

bulletins, and they will sign anything you ask them to 

sign so that all of that is just word salad that doesn't 

really substantively add anything by way of actual 

protection. Romanette two is helpful when you go to 

subsection two. Certainly, romanette one is meaningful. 

Romanette two is meaningful. Romanette three is 

problematic because, of course, there is no consensus on 

what the definition of an education is. Folks in 

education often refer to the Holy Trinity of education 

being curriculum, instruction and assessment, and really 

the meat of that is instruction. So, I would really 

strongly urge you to replace the word education with 

instruction in in that subsection. And then I would also 

add a romanette four to that section, where the 

Secretary would view any high school diploma, any 

diplomas from an unaccredited high school that has a 

business relationship with the postsecondary institution 

that is admitting the student. That was one of the 

biggest loopholes that we used to see 10 15 years ago 

was that they would set up fake high schools that charge 

nothing, mostly because the college was basically paying 

the school to rubber stamp diplomas. So, I would add a 

romanette four there. 

MR. MARTIN: Thanks, Barmak. Could you 

please submit that and we'll definitely consider that. 
49 

Committee Meetings - 01/19/22 

MR. NASSIRIAN: You're killing me. 

MR. MARTIN: Well, you know, it's the 

burden has to be placed on someone Barmak and so I'm 

going to place it squarely on you since you made the 

suggestion. I won't, well, I will probably remember 

that, but it does help if we get the if we get the 

language. So, you wanted to change education to 

instruction in romanette three, right? And you wanted to 

add a romanette four that addresses if the if the high 

school was unaccredited and has some type of a business 

relationship with the with the institution, correct? 

MR. NASSIRIAN: Yes. But also in the 

language. 

MR. MARTIN: Right, I notated and 

captured that but please do submit. 

MR. WAGNER: And just for everybody to 

know that Jessica is on deck next. Go ahead, Jessica. 

MS. RANUCCI: Thanks. I just want to 

reiterate, I think, you know, the diploma mill problem 

is a real one, and I appreciate the Department taking a 

step to do that. You know, as a legal aid practitioner, 

we see literally thousands of Ability to Benefit 

discharges at my organization. I guess I was just 

wondering at the Department because speak a little bit 

more to why this and why here? Like, why do it's sort of 
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Committee Meetings - 01/19/22 

the question that I think Kelli asked last time, like 

why do you think administrative capability is the right 

place to do this? And how do you think it's going to 

make a difference here? 

MR. MARTIN: Well. We still have the 

definitions of a recognizable equivalent of a high 

school diploma in other sections of the regulation and 

also under student eligibility requirements to obtain a 

high school diploma. Why is it here? Well, because 

again, this is a this this is a tool. Administrative 

capability generally is a tool that we use going back to 

the way Steve described it when we've made other 

findings at an institution that are generally serious. 

Then it keys to this to this overall finding of 

administrative capability, and it actually puts into 

this codifies in regulation for the first time, really 

these steps that we now have to determine if the high 

school, if the high school diploma is not valid. And 

even if, you know, we felt they made the most sense to 

do it here in this discussion of administrative 

capability since especially since this was the part of 

the regulation we were opening up in this on this table. 

It does get it into regulation that this that this that 

a high school diploma is not valid if it doesn't meet 

these, these currently these three criteria. So even 
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Committee Meetings - 01/19/22 

though we address this in other areas of the regs of the 

regs, it is here in codifies here so we can hold an 

institution to that where the institution had cause to 

believe of the Department has cause to believe that it's 

not valid. So, I hope that answers your question. 

MR. WAGNER: Steve? 

MR. FINLEY: I'm just going to add to 

what Greg said. Making sure that I'm not muted. So, if 

you look at the standard of conduct in the Department of 

regulations, the institution is held to the standard of 

being a fiduciary. The federal Student Aid funds it 

administers, it does so on behalf of its students. Those 

are not the institutions funds. When it draws them down, 

they are students funds. And then the institution 

applies those funds to the accounts at the institution 

and is responsible for disbursing the additional funds 

to the student for living expenses that were calculated 

under the regulations. But the baseline for all of that 

is the institution's determination that the student is 

eligible. And one of the fundamental requirements of 

student eligibility, as Greg mentioned, is that the 

student has a high school diploma or some equivalency 

that satisfies the requirements under the Title IV of 

the HEA. And if this is not a baseline finding for 

holding an institution, a determination the institution 
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Committee Meetings - 01/19/22 

is not administratively capable. I don't know what is 

right, and this is actually putting it in the right 

place to make this connection to the to the primary 

responsibility in the institution to make sure the 

students are eligible. 

MR. WAGNER: Thanks Steve, appreciate 

it. Brad, I see your hand up. 

MR. ADAMS: Thank you, Kevin. I just 

had a few clarifying questions for either you or Greg. 

Obviously, no one wants to allow diploma mills, but I 

think some of these details here could be challenging 

for institutions. The Department is requiring the 

institution to reach out to the high school, what if the 

high school won't cooperate, or what if the high school 

is closed in those instances that the institution force 

was forced to deny admission to the student. I could see 

this being particularly challenging for nontraditional 

students that went to high school a while ago, who lives 

in an area that has had high schools closed. So, if you 

help me on that first piece and I've got follow up. 

MR. MARTIN: Well, I you know, we can 

I can see that it could be that it might be difficult to 

obtain the documentation necessary. I don't want to 

belittle that. But remember that what precedes all of 

what's in one and two is that we start with this what's 
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Committee Meetings - 01/19/22 

in T and you need to we need to always review that, that 

this is an instance where the institution or the 

Secretary has reason to believe a high school diploma is 

not valid. So, with this the first step, there would be 

the institution this is this is in an instance where you 

already have cause to believe this is not a valid high 

school diploma. Again, I don't think that and what the 

regulations said was that Steve said, you you're this 

keys back to student eligibility, rather. The student is 

not eligible if a student doesn't if you have reason to 

believe that this that this credential might be invalid 

at that point, that is not an eligible student until 

it's determined that the reasonably determined that it 

is indeed valid. So, the steps in acquiring the 

documentation, the school would have to get it to obtain 

the documentation. Again, how the school does that is 

not does it do it through the student does it assist the 

student? We don't, we're not really regulating that 

here. We're saying that the school has to obtain that 

documentation. I don't know what we can do in instances 

where the student is unable to obtain that. If the 

student is unable to obtain it, then it might be that 

the situation is the situation could be such that it is 

indeed invalid. And in that case, the student is not an 

eligible student. So, I don't know that we can entirely 
54 

Committee Meetings - 01/19/22 

address that. 

MR. ADAMS: I guess to follow up on 

that and thank you for your comments. You know, if the 

assumption is the registrar has the bandwidth or ability 

to know the names of each high school, consider an 

issue, I'm not sure they would have that bandwidth or 

expectation. But if we were unable to get an answer, are 

we assuming we should deny admission and all instances 

if they won't respond? 

MR. MARTIN: Well, again, this is a 

situation where you already have cause to believe that 

what the student we're not requiring that you look that 

you obtain a high school diploma for every student, 

right? So, we're looking at instances where you believe 

there to be a problem or a belief that it is not valid. 

So, at that point, yes, the student is not valid until 

you have cause to believe it's invalid. That has to be 

that needs to be resolved. So, if for whatever reason, 

if it couldn't be resolved in such a way that you obtain 

the documentation necessary to confirm the validity of 

it, then yes, that would not be that students would just 

not be eligible. 

MR. ADAMS: And then one final 

question here, it says in here that we should expect 

that high school principals and executive officers write 
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Committee Meetings - 01/19/22 

letters to colleges and universities attesting to the 

rigor of their coursework. It seems like an atypical 

request to high schools being hesitant about providing 

that kind of information. Why would the Department want 

the letter to be from a principal executive officer? 

MR. MARTIN: Well, what we're doing 

here is, I mean, consider that with so it's obtaining 

documentation from a high school that includes at least 

one of the following. And what we were trying to do here 

is provide provide options. So, we're not saying 

necessarily it has to be that that that is a that is an 

option to give schools some flexibility in what types of 

documentation it obtains in instances where it feels 

that the or it has cause to believe, rather that the 

high school diploma is not valid. 

MR. ADAMS: Just not sure we were 

going to get a lot of response at that level, but I'll 

defer questions at this time. 

MR. MARTIN: No point taken. I think 

in some cases it might be difficult to obtain those 

statements. But we do have other we do have other 

options there. For instance, you know, transcripts. I 

think in most cases, somebody would have a transcript of 

their time in high school. 

MR. WAGNER: Sorry about that, I had 
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Committee Meetings - 01/19/22 

to get myself off mute. We have two more people in the 

queue and then I'm going to go ahead and call on them, 

and then I would go ahead and ask to move for a 

temperature check on T. So, the two people in the queue. 

First up, we have Debbie. 

MS. COCHRANE: Thank you. You know, I 

do appreciate the goal here and just had a couple of 

questions about how this works currently from the 

Secretary's perspective. In terms of, you know, how 

frequently does the Secretary have cause to believe that 

a transcript or a high school diploma might be invalid? 

What contributes to those beliefs and how are 

institutions notified? Or is there like a process like 

verification flags and the FAFSA where schools get kind 

of pushed some information? 

MR. MARTIN: So, what is what you're 

asking here, how would schools be made aware of the 

Department's belief that a high school diploma is not 

valid? 

MS. COCHRANE: And also, how kind of 

how common it is I'm still trying to get a sense of like 

how we can think of some instances where this might be 

really challenging I'm trying to understand how 

frequently they would arise. 

MR. MARTIN: Well, you know, our 
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Committee Meetings - 01/19/22 

overall, it's not our only concern, but I think one of 

our one of our chief concerns here is our instances 

where this has happened, we do have instances of this 

where an institution, an unscrupulous institution has 

entered into arrangements, I think Barmak brought that 

up, that that was particularly problematic. He had seen 

that and he's absolutely right that it does occur that 

some institutions will enter into arrangements with an 

entity they clearly know is not a legitimate provider of 

high school of a high school education and funnel the 

students from that entity into the school. This would 

allow us to give us considerably more teeth to go after 

that that that practice which is just inexcusable on any 

account. It's clearly just a circumvention of what's 

required by law and what's in regulation. So, we do get 

the we do get to we do we would pick that up here. As 

far as, I mean, probably where schools would be made 

aware from the Department. You'll recall that in 2010, 

when we did when we were doing program integrity 

regulations, the Department had indicated its interest 

in in and providing lists of diploma mills and we are 

interested in pursuing I know we it's been pointed out 

to us that we never did it. It's not an easy thing to 

do, but we are thinking about going back and trying to 

provide that, it wouldn't be an exhaustive list, of 
58 

Committee Meetings - 01/19/22 

course, it wouldn't mean that any entity not on that 

list is automatically valid, but that that would assist 

schools and be a way of us informing institutions that, 

like a specific entity or entities, is not providing 

high school diplomas valid high school diplomas. 

MR. WAGNER: Marvin, you have the 

floor. 

MR. SMITH: Yes, I just want to 

clarify that I do not believe a lot of big public 

institutions collect the high school transcript and just 

recognize that that would be a burden, administrative 

burden, regulatory burden on schools. So, I just want to 

be clear on what the expectations is as this is written. 

Are you saying that all schools will now have to start 

collecting the final high school transcript? And will 

that be subject to some type of audit? Or, you know, to 

me, it's another verification burden that we're putting 

on schools. And I certainly understand the concerns 

about, you know, false transcripts, but I'm just 

recognizing it's an administrative burden on schools to 

start digging in on some of this. 

MR. MARTIN: So, to answer your 

question, is the Department through these regulations 

requiring schools to collect high school diplomas and 

transcripts, the unequivocal answer to that is no, we 
59 

Committee Meetings - 01/19/22 

are not. That we still key to what's in in T where 

evaluate the validity of the of the student's high 

school completion. If the institution or the Secretary 

has reason to believe high school diploma is not valid 

or was obtained from an entity that provides or was not 

obtained from an entity that provides secondary school 

education. So, this is not a requirement across the 

board to collect transcripts or to collect high school 

diplomas. We are aware that there are many institutions 

that do not do that, that they rely upon these students’ 

assertion on the FAFSA that he or she has a high school 

diploma as long as there is nothing to contradict that. 

But we're talking about here are instances where you 

have reason to believe that, you know, that that that 

there is a problem, and I've seen schools, I've actually 

talked to schools where they become worried about a 

particular high school or could be a, you know, a 

provider of high school of high school diplomas that 

they see a lot of their students coming from. You know, 

they began to doubt the validity of this entity. So, at 

that point, then this was certainly kick in, but it is 

not a requirement to, in every instance, evaluate the 

transcripts of a student or to or to obtain written 

statements or anything that's in anything that's in 

paragraph one, subparagraph one, sorry. 
60 

Committee Meetings - 01/19/22 

MR. WAGNER: Okay. I just mentioned, 

you know, a little while ago that we were going to take 

two more comments, I've seen a few hands shoot up. Just 

wanted to make sure that whoever has their hand up, that 

they have something new to add. And if so, do they 

please keep their comments brief as possible as we do 

want to move things along. So that being, said, Beverly, 

you have your hand up. 

MS. HOGAN: Excuse me, I don't really 

have anything else to add. But let me just say that as a 

former president, we did have interim processes to 

determine if a high school diploma looked invalid and 

that's the texture and you contact the institution, 

certainly their questions ask the students, but it's a 

shared kind of responsibility and I don't have any 

unrest, would any of the others. But there is a process, 

and it matters. 

MR. MARTIN: Thank you Beverly, I 

really appreciate your pointing out the shared the 

shared responsibility aspect of it because I think 

that's where I was trying to go and you said that very 

well. 

MR. WAGNER: Thanks, Beverly. Kelli 

and then Debbie. 

MS. PERRY: First, I want to stress 
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Committee Meetings - 01/19/22 

that I agree with the importance of the validity of high 

school diplomas in this. I have a couple of 

recommendations based on the fact that I think what I've 

heard Greg say is that the validity of or the 

responsibility for the validity of this is with the 

institution, and this only occurs when there's some 

question as to whether or not the diploma is not valid. 

So, my first recommendation would be a number one that 

you change the word must to shall or remove it because 

by saying must, you're basically saying that the 

institution must do these things, which you said that 

the institution is not required to collect transcripts. 

I think that that word needs to come out. And the second 

recommendation would be to strike number two altogether, 

because you're saying that the high school diploma is 

not valid if, but the responsibility of determining 

whether or not it's valid or not is on the institution. 

So, I think removing that might help. 

MR. MARTIN: You would, I'm just 

trying to clarify. And I want to be sure that I say. 

First of all, we don't want to use the word shall 

anymore, because if it's a requirement of the school to 

do it, then we feel it's incumbent on us to make that 

clear that it's a that it's a that it's a must. And 

remember, we're saying the school must evaluate this and 
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Committee Meetings - 01/19/22 

that the evaluation must include, so what I say must 

include, yes, the burden falls on the institution to do 

this. I'll take it in an absurd example I'm a student 

and the institution questions the validity of my high 

school diploma. We're not saying here that the student 

can sit back and say, you know what, yeah, you requested 

it so it's up to you to get the it's up to the you 

school to document that I'm that I'm that I'm eligible. 

No, the documentation has to be received by the school, 

but it may be that the student has to participate in 

that process of getting it. I mean, ultimately, it is 

the school's responsibility to have it in order to 

validate the or to validate the diploma. But quite 

frankly, if a school questioned it and the student said, 

you know, I'm not going to do anything, it's up to you 

to try to contact my school and do all that I don't 

think something incumbent upon the school to do that. 

That situation would be the student is not eligible at 

that point until this is obtained. 

MS. PERRY: But I think what Marvin 

said earlier was that the bigger public schools are 

relying on the certification of the student not so much 

in the fact that the school is validating the validity 

of at least one of the following, which would include 

transcripts and et cetera. Right? So, we're not you're 
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Committee Meetings - 01/19/22 

not saying that that the institution must do these 

things. You're giving examples of things that they can 

do in order to ascertain the validity of something. And 

you know, the biggest one that he mentioned is not 

listed here. 

MR. MARTIN: I'm sorry, which was 

what? 

MS. PERRY: I think what he said was 

that the students are, well, can I defer to him to 

answer that question? 

MR. SMITH: No certification on the 

FAFSA is what schools are relying on. 

MR. MARTIN: Correct. And as I pointed 

out earlier, these rules, these rules proposed rules do 

not preclude that they did not preclude relying upon the 

FAFSA. They do not require that you collect transcripts 

for everybody. Remember, it goes back to where it's only 

where you have reason to believe the high school diploma 

was not valid. And in most cases where you're relying 

upon the FAFSA or even where you're receiving 

transcripts, you probably don't have cause to believe 

that it's not valid. So, where that doesn't, where that 

is not where that does not exist, that that that's 

reason to believe it's not valid, then none of this 

kicks in. So, this only comes after there is so we're 
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Committee Meetings - 01/19/22 

not talking about a routine requirement to collect 

transcripts or written descriptions. This is only where 

you have reason to believe the high school diploma is 

not valid or you've been informed by the Department that 

a particular in the in the instance of a mill or 

something where we may inform you that those diplomas 

are not valid. Does that make sense, I hope I've 

explained that properly. 

MR. WAGNER: Barmak. Is this something 

new, and if so, could it be quick? 

MR. NASSIRIAN: Very quick. 

MR. WAGNER: Thank you. 

MR. NASSIRIAN: The issue is not we're 

conflating two distinct questions here. The FAFSA 

certification and the and the kind of routine practice 

which had the vast majority of institutions does not 

include the collection of final transcripts has to do 

with whether the student graduated. And yes, there are 

some students who may not have actually graduated, who 

may slip through them, but that's a different problem 

than the school, the entire high school being fake. And 

that's the reason why number two is really necessary 

there. This is not a mandate on ensuring that every 

student that you may admit or enroll actually graduated 

from a legitimate school. That's the norm, and that 
65 

Committee Meetings - 01/19/22 

whatever practices institutions engage in today would be 

adequate. It's in those hopefully exceptional cases 

where the entire high school is a fake construct that 

this provision kicks in and a burden then is added to 

the institution, at least along these lines, to 

establish the legitimacy not of whether the actual 

graduation occurred. Graduation did occur. The issue is, 

is the school real? So, I think those are two distinct 

issues that are being addressed quite adequately here 

under two. 

MR. MARTIN: Thank you, Barmak. That 

was very well said, I like the way you said that. That's 

exactly what we're doing. 

MR. WAGNER: Greg, would you like to 

proceed for a temperature check on T at this point? 

MR. MARTIN: I think yes. 

MR. WAGNER: Okay, everyone, you know 

what to do. Go ahead with the temperature check with 

your thumbs and raise them high so we all can see them. 

Okay. It seems that everyone is in agreement on T for a 

temperature check. Thank you for that. Greg, how would 

you like to proceed? 

MR. MARTIN: Okay. I believe our 

schedule calls for us to move on to a discussion of 

gainful employment. So that's what we'll take up next, 
66 

Committee Meetings - 01/19/22 

so give everybody enough to get that paper in front of 

them. And I want to say at the outset before we get into 

the discussion of gainful employment here that unlike 

with the other issue papers we've given you thus far, I 

will give you before the end of this week, we don't have 

any proposed amendatory text or red line in here for 

you. We are proposing to bring back subpart Q, which, as 

you're aware, was taken down. And what we're hoping to 

do in this with respect to gainful employment at this 

session is to get some feedback from you. Sort of, for 

those of you who participated in neg regs in the past 

you there we have in the past used the first week as 

obviously a listening session. We departed from that 

somewhat and tried to provide amendatory text where we 

can. We don't have that yet here for you. So, this is 

you'll notice that we have a number, a number of 

discussion questions. We would like to receive your 

feedback on that. So, I'll introduce the topic. After I 

do so, I'm going to step back and let the facilitators 

present these questions. And then we really like to get 

some feedback from you and I, and I want to try to get 

through all of them because they're all important for us 

to have to take a check of the negotiators here to see 

where they where they want to go as we formulate as we 

formulate the amendatory text going into the next table. 
67 

Committee Meetings - 01/19/22 

So just as a as a matter of introduction, we know. 

MR. NASSIRIAN: I'm sorry, can I 

interrupt quickly because I hope we're not done with 

administrative capability. If you recall, at the 

beginning, I pointed out that I thought there were 

omissions that that we need to address. Could I very 

quickly just cite two of them and then be tasked with 

drafting language before we finish administrative 

capability? 

MR. MARTIN: You can. Yeah Barmak, you 

can go ahead and tell us briefly what they are, but I 

would request that you put those you put those in 

writing to us and we'll bring them up to the next 

session. But go ahead. 

MR. NASSIRIAN: Two issues that that 

are proving problematic time and again with regard to 

the participation of bad actors in Title IV. One of 

which has to do this sort of is a segue to financial 

responsibility, but I think it belongs here in 

administrative capability. The Department we've seen 

from past gigantic collapses of publicly traded 

institutions that whatever the substantive criteria the 

Department uses to establish compliance and financial 

responsibility, those seem to be annual events that 

there is no real time monitoring to ensure that that 
68 

Committee Meetings - 01/19/22 

institution that might have adequately satisfied the 

requirements at a given point in time continues to be 

compliant with the requirements. So, what I'd like to 

add is language to the administrative capability section 

that would require the institution and its and its 

executives people exercising substantial control to 

report any material adverse events to the Department 

within 30 days or something that that would prevent the 

kind of scenario where an institution may satisfy 

financial responsibility requirements and then be looted 

by insiders and leave the Department holding the bag. It 

tends to be pretty standard in commercial law, and it 

seems to me that it would that it would make a lot of 

sense to require that of institutions. The other trigger 

that I hope we can add, perhaps to the to the language 

in M, would be that that when institutions lose 

eligibility in other federal programs that have which 

loss has consequences for Title IV, it seems to me those 

need to be factored into financial into administrative 

capability as well. An institution that suddenly loses 

eligibility for this is what we are very familiar with. 

The institution that suddenly loses eligibility for GI 

Bill benefits because of findings of the SAA typically 

forces all of the students who relied on the GI Bill 

benefit when they enrolled to take out loans. That has 
69 

Committee Meetings - 01/19/22 

consequences for Title IV, and it seems to me that that 

loss of eligibility ought to be ought to be reported to 

and acted upon by the Department. I think we can add 

this to the misrepresentation section, but I just wanted 

to flag it. 

MR. MARTIN: Thank you. Yep, please 

submit that we'll take a look at it, thanks. 

MR. WAGNER: Just a few things before 

we get to the next topic. Just announced that let's see, 

Carney King is now in for Ernest Ezeugo representing 

student and borrowers. Johnson Tyler is back in for 

Jessica Ranucci. We have a Emmanual Guillory in for 

Kelli Perry for the private nonprofits and Barmak will 

remain as a primary for this discussion. 

MS. JEFFRIES: Just a point of 

clarification Kevin, Ernest Ezeugo is at the table. 

Carney was there for the end of that last conversation. 

So, Ernest is back. 

MR. WAGNER: Got it. Thank you trying 

to keep track of that, thank you, Cindy. 

MR. MARTIN: Okay. We have, I'm sorry, 

yeah, we have the summary of the issue in front of you. 

Just some highlights here that with what's in the what's 

in statute, the Higher Education Act requires some 

programs and institutions that generally all proprietary 
70 

Committee Meetings - 01/19/22 

institutions and any non-degree programs that are at 

public or private institutions to prepare students for 

gainful employment in a recognized occupation in order 

to be eligible for Title IV aid. We talked about that 

for many years, the standards by which institutions can 

demonstrate compliance were undefined. We go back in 

2011, the Department conducted rulemaking and issued a 

regulation establishing standards for gainful 

employment. It was based in part on the debt of 

graduates that was incurred for the program relative to 

the earnings that they received after completion. That 

regulation was reissued in 2014 following a court 

challenge and was based on similar debt to earnings 

structures. When the data were first released in 2017, 

over 800 programs collectively enrolling thousands of 

students did not pass the GE standards. In 2019, the 

Department rescinded the 2014 rule almost in its 

entirety. The Department, however, remains concerned 

about the prevalence of programs that fail to help 

students obtain sufficiently remunerative employment to 

justify the investment of their time and resources. So, 

we did discuss that a growing body of academic research 

that is identified persistent problems with the GE 

programs, including some very low or negative labor 

market returns for graduates. So, we do have concerns 
71 

Committee Meetings - 01/19/22 

about that. We point out that most recently available 

data that is published via the College Scorecard show 

that the median cumulative loan debt of students in many 

programs is quite high compared to the amounts of money 

that the students earn. And we say, for example, median 

cumulative borrowing levels exceed median annual 

earnings at about 12 percent of undergraduate programs. 

And we note here that or 9 percent of public and 

nonprofit proprietary institutions, however, the 

analogous figures are 28 percent for associate and 42 

percent for bachelor's degrees. Multiple studies have 

found that accounting for differences in student 

characteristics borrower outcomes like repayment rates 

and the likelihood of default are worse in the 

proprietary sector. And finally, research indicates that 

federal accountability efforts can be effective in 

driving improved student outcomes, especially for 

students who tend for-profit colleges. So, we're seeking 

feedback on the overall state of GE here, including the 

greatest problems that students who enroll in GE and GE 

programs currently face. We're looking at what would be 

an appropriate framework for these GE standards, 

including metrics we could utilize, sanctions that might 

be applied where these standards are not met. And 

finally, we were going to request feedback on the need 
72 

Committee Meetings - 01/19/22 

for improved consumer information about the outcomes as 

well as GE programs failure to meet required standards. 

So we do have a number of questions here. We are 

interested in establishing criteria to determine how an 

applicable program can demonstrate its preparing 

students for gainful employment in a recognized 

occupation. And that is required by the statutes. The 

Department seeks to promulgate regulations promoting 

better labor market outcomes. Create value for students’ 

investments in higher education protect students from 

acquiring debts they cannot afford to repay, and finally 

safeguard the interests of taxpayers. So just give the 

first question here for you to consider and then we'll 

open it up. So, the first question we have here is, oh, 

before I give these questions, I'm going to try I want 

to get through all of them. So, we I don't want to cut 

off debate on any of this, please. As our facilitators 

constantly remind us, if you have a, which is a good 

thing to make certain that if you have a comment that it 

is something new that has not already been brought up as 

we do want to get through these. So, the first one is 

what metric or metrics or thresholds pass fail cut off 

points in those metrics, best to distinguish between 

programs that prepare students for gainful employment 

versus those that do not, including different credential 
73 

Committee Meetings - 01/19/22 

at different credential levels. For instance, we seek 

feedback on the use of repayment rates, debt to earnings 

rates, earnings thresholds and other measures. And we 

ask should the Department include noncompleters in any 

of these metrics? How would the Department assign 

noncompleters to programs and what metrics would be most 

suitable? So, consider that I'll step back and we'll 

open the floor for comment on question number one. 

MR. WAGNER: Thank you, Greg. Just to 

just reiterate, this is a, you know, it was a big 

conversation, there's a lot of questions if we can try 

to limit the discussion to the specific questions as we 

go through that be helpful. And as Greg mentioned, if 

there are specific comments or other things you'd like 

to put in writing, feel free to do so. You know, the 

Department is seeking, you know, your input and ideas. 

So, we'll go ahead and start it off. We have Barmak. You 

have your hand up. No, you don't have your hands up. 

Okay. Then we have Brad. 

MR. NASSIRIAN: There are people ahead 

of me. 

MR. ROBERTS: I see Yael is first on 

my screen, Kevin. 

MR. WAGNER: Oh, okay, I'm sorry. You 

know, it's backwards for me. I apologize. Yael, you're 
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Committee Meetings - 01/19/22 

up, sorry about that. 

MS. SHAVIT: No problem. You know, we, 

Adam and I submitted initial comments yesterday, so I 

won't rehash all of them. But it's certainly relevant to 

the first questions here about the metrics that should 

be employed. So, I do want to briefly reiterate our 

position that the 2014 gainful employment rule should be 

the Department's baseline for the regs that come out of 

this process. The 2014 rule was the product of multiple, 

thorough and, I would say, painstaking rule making 

processes. It established accountability metrics, the 

earnings metric in particular that provided critical 

protection to vulnerable students and I think notably 

withstood both judicial scrutiny and the test of 

implementation. The Department's rescission of the 2014 

rule under the previous administration was unreasonable. 

The Department does not need to be bound by it, and I'd 

note I just think there's simply no reason to reinvent 

the wheel here. I think it may well be the case that in 

the intervening years, we've identified potential 

opportunities for additional protections and additional 

metrics, potentially earnings threshold. And these types 

of additions should be considered, but the modifications 

should be minimal to the 2014 baseline and additional 

metrics should be just at additions. I'd like to just 
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Committee Meetings - 01/19/22 

give our, I think, unique perspective, our view that the 

Department should be effectively reinstating the 2014 

rule comes from years of experience by my office and 

Adam's office and AGs across the country. Addressing the 

fallout from the lack of safeguards and standards that 

predated the 2014 rule. We know that a large segment of 

for-profit institutions enrolled students in our states 

with false promises and basically left them buried in 

debt with no meaningful career prospects. I can say 

confidently from our experience with these 

investigations and enforcement actions that had the 2014 

rule been in effect, it would have prevented a lot of 

schools from continuing to operate programs that harm 

borrowers. And my final point here is that I really 

think it's important to frame the discussion is just a 

reminder that an institution's access to Title IV funds 

is not an entitlement, it's a privilege. And it's the 

responsibility of the Department to ensure that only 

those schools that provide students with meaningful 

educations are allowed that privilege. So, we have the 

imperative here to make sure that we're not reinventing 

the wheel, that we're doing things that are far reaching 

and robust, and that students are no longer left holding 

the bag for institutional and regulatory failures. So, 

thank you for the opportunity. 
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Committee Meetings - 01/19/22 

MR. WAGNER: Thank you, Yael. Let's 

see, we have Johnson, you're up next. 

MS. JEFFRIES: No, actually, Brad is 

next. 

MR. WAGNER: I'm sorry, my screen is a 

little funky, so I apologize. 

MS. JEFFRIES: I'll feed it to you. 

MR. WAGNER: Alright thank you, I 

appreciate it. 

MR. ADAMS: Good morning. On gainful 

employment, I have two main opening points relating to 

accountability and statutory authority that I would like 

to discuss before going into the specific gainful 

employment questions. First, the Department should 

develop an accountability system that protects all 

students by promoting good student outcomes across all 

programs and all of higher education. Any regulation 

that only applies to gainful employment programs only 

will fail to protect over 75 percent of the students in 

higher education because it will only cover students who 

attend proprietary schools or enroll in non-degree 

programs. Respectfully, it does not make sense to pour 

an enormous amount of effort and resources into an 

accountability framework that protects less than a 

quarter of its students. There is also no question that 
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Committee Meetings - 01/19/22 

that the students in all sectors would benefit from this 

protection. In every sector, there are programs that 

serve students well, and there are those that do not. It 

is also worth noting that the Department is on record 

supporting accountability measures that apply across 

sectors. Last June, Secretary Cardona confirmed his view 

to the House Education and Labor Committee that all 

postsecondary institutions, regardless of tax status, 

should be treated the same under the law. I'll drop that 

video into the chat so everyone can listen to it over 

lunch. Just a few months ago, at an FSA conference 

undersecretary Kvaal committed to addressing student 

debt issues and ensuring equity for all students. Lines 

between our sectors are also blurring. Recently, 

proprietary schools have converted to nonprofit 

institutions. Public schools have acquired or merged 

with former proprietary institutions, and many nonprofits and public schools are now partnering with 

private for-profit online program manager companies 

called OPMs. On January 14, Senator Warren sent a letter 

to a group of OPM companies seeking accountability for 

all students attending over 300 OPM partner programs 

offered at nonprofit and public institutions. These 

institutions have partnered with the for profit OPMs to 

allow them to manage their marketing, recruiting and 
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Committee Meetings - 01/19/22 

admissions processes in exchange for a significant 

portion of the nonprofit program's tuition. We 

wholeheartedly agree with Secretary Cardona that all 

students, regardless of sector or background or tax 

status, deserve equal protection. If we are serious 

about protecting students during this rulemaking, then 

we need to protect all students. I will get back in 

queue to make my second point regarding statutory 

authority next. Thank you. 

MR. WAGNER: Thank you, Brad. Let's 

see if we got this right. Johnson, you're up. 

MR. TYLER: Thanks. So, I agree with 

Yael's assessment that the 2014 provides a framework 

with a bunch of categories metrics that no one is a 

tripwire. You need to really fail in one or fail and a 

number of them, I think it's really useful. I would add 

to that the high school earnings as a metric, that's 

something that's easily understandable by lawmakers, 

legislators. You should be earning more than a high 

school diploma after you go to school, you know, making 

investment or going to college. I would like to just 

reframe this a little bit in that there is just a 

terrible amount of debt that's taken out by schools that 

don't provide quality and there does need to be a 

metric. I have file cabinets filled with clients whose 
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Committee Meetings - 01/19/22 

I've been telling your job is to manage your loan. 

You're never going to repay this because a place like 

the Art Institute has really swindled a number of my 

clients. Other schools as well. So, I think there has to 

be a metric and we have to go back to the statutory 

authority since at least 1978. Gainful employment has 

been in the statute and it's applied to proprietary 

schools and non-degree granting programs. Congress is 

well aware of that. It's capable of changing it if the 

if they started viewing the value of those institutions 

differently, they chosen not to. And gainful employment 

really needs to just address that issue. Thank you. 

MR. WAGNER: Thank you, Johnson. 

Barmak, you're up. 

MR. NASSIRIAN: Yes, thank you. First 

of all, I was a negotiator for the 2014 gainful rule. I 

was not satisfied with it at the time, but I want to 

associate myself with the comments Yael made and Johnson 

made that what we have is likely to be far better than 

anything we can generate on an issue among so many 

others in this very truncated process that we are 

undertaking now. So, I agree that the 2014 rule ought to 

be the core of whatever this committee ends up 

producing. Now, having said that, I also remind folks 

that the statutory language for gainful employment 
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Committee Meetings - 01/19/22 

represents an eligibility criterion. The Department 

chose back in 2014 to essentially let institutions offer 

programs and then kick them out if they failed this 

criterion. I think we have an obligation for purpose of 

protecting both students and taxpayers to also add to 

the 2014 language some provisions on the front end to at 

least give us a reasonable assurance that the program 

does in fact prepare the students it intends to enroll 

for gainful employment in a recognized occupation. I 

think that ought to be separable from the conditions 

that are articulated in 2014 rule that are post facto. 

But there are some things we can do on the front end to 

prevent victimization and for people get plugged in to 

failing programs years later. It's just it's a very 

backward way of doing things. You know, Brad, I have 

enormous empathy for your perspective. I do agree that 

that that all programs ought to be held accountable, but 

I worry a little bit about making the perfect the enemy 

of the good. The idea that we should protect no one 

unless we protect everyone, you know, is just an 

impractical one. And frankly, that these programs are in 

fact where so many problems have concentrated. So, there 

is good empirical reason to start here. And furthermore, 

and I'm curious what your statutory interpretation is, 

the statute very clearly only gives the Secretary 
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Committee Meetings - 01/19/22 

authority to address the programs that the 2014 rule 

does address. We can go to Congress and ask to expand 

it, et cetera, et cetera. But at the moment, we have to 

operate within the confines of the statutory authority 

that the Secretary does have. Thank you. 

MR. ADAMS: Thank you and Barmak, I 

appreciate I will address your comment when I'm back up 

to speak. 

MR. WAGNER: Thank you. Thanks, 

Barmak. Let's see here, Ernest, you are next. You have 

the floor. 

MR. EZEUGO: Thank you. First, just 

want to take a moment to agree with those comments, 

Johnson's comments, Barmak's comments related to the 

2014 rule being the benchmark here. I'm sorry being the 

baseline benchmark. And as to the second part of this 

question, I hate to kind of comment on a question with a 

question, but I would like to get the context on why the 

Department wouldn't include not completers and any of 

the metrics. And Greg, if you wouldn't mind speaking to 

that, I'm just trying to get context, you know, why 

that's a question to begin with. 

MR. MARTIN: Well, the Department 

we're seeking we're seeking comment on, should we 

complete, should we include noncompleters previously in 
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Committee Meetings - 01/19/22 

the last time we had the rule that the 2014 rule it only 

it only took into consideration those who had those who 

had completed the programs. And I think that there are, 

you know, admittedly, there are arguments on all sides 

of that. And one of the things you know, and if you look 

at the way the rule was, the rule was put into effect, 

you know, it does look at people who have completed a 

credential, and so there is when you look at only 

completers, it does give you this, your baseline is 

those who actually completed the program and would be 

expected to go out and earn an income related to that 

credential, which they have obtained. So, it's probably 

makes things more compact. It makes it easier for us to 

assign students to a program, certainly. And if we 

departed from that and when you went to include even 

those who were not completers. I'm not arguing one way 

or the other for it. I'm simply saying that there are 

some. There would be some challenges in doing that. And 

we're just asking we're asking here for feedback on 

whether we whether or not we should go in that 

direction. But I think the reasons why back in 14 we 

went with completers is that it is a if you're looking 

at tying the, if you're looking at tying earnings to 

somebody who's practicing the actual profession, then 

then then then there is a more direct tie, I think, to 
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Committee Meetings - 01/19/22 

someone who's actually completed. Which is not to say 

that we should look at people who don't complete and say 

that that's that too could be that but that does not 

saying that that is not an indication of a problem to 

the program because there very well may be. So, we're 

just throwing it out there for comment. You know, to 

read, certainly anybody could go back and read the 

preamble to the final to both the NPRM and the and the 

final rule for the 14 regulations and get more of a 

handle for the for the discussion on that. I say Steve, 

Steve was there at the time, I asked Steve if he wants 

to add anything to that. 

MR. WAGNER: Steve, you're up. 

MR. FINLEY: Thanks. Just a couple of 

things. As Greg noted, I mean, there was some discussion 

about whether completers should be a part of the prior 

GE framework. And there I think there are persuasive 

arguments that if you're going to evaluate programs’ 

ability to prepare students for gainful employment and 

recognized occupation, it makes sense to only look at 

the students that actually complete that program when 

you're doing that assessment. I will say there's another 

anomaly that kind of comes into play as well, which is 

if you've got a lot of students that drop out quickly in 

a program and their earnings are not dissimilar from the 
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Committee Meetings - 01/19/22 

program graduates, you're going to make a program look 

better because the students that drop out early are 

going to have substantially less debt that's going to be 

considered compared to those earnings. So, it's, there's 

a lot of pieces in the framework and that's why we're 

asking for comments this time as well. 

MR. EZEUGO: I just wanted to respond 

by saying, thank you, I appreciate that context, and it 

promises a lot to think about. And kind of emphasize my 

point, Barmak made about thinking through ways that 

through this rule and otherwise we can think about how 

we are bolstering this rule and other regulations to 

consider protecting as many students as possible in 

respects to triggers for when GE and other programs take 

effect and essentially making sure that we're thinking 

through how we can limit as much damage to students as 

possible. And that's all I'll say for now. 

MR. WAGNER: Thank you, Ernest. I do 

see adviser Adam Looney had his hand up, if that's okay 

if we'd go to him and then go right back into the queue. 

Does that make sense? Okay. Adam, and then we'll go back 

and queue and Debbie you'll up next. 

MR. LOONEY: Okay, thanks. I just want 

to jump in on a couple of these topics because I had 

some background that I want to share. So, one issue on 
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Committee Meetings - 01/19/22 

the topic of completers and noncompleters, you know, I 

think back in 2014 and before that, part of the issue 

was how quickly the administrative capacity to assign 

somebody to a program quickly to understand if you're a 

freshman or a first-year student or something like that, 

how do we know when somebody is in a program? But on the 

other hand, so it seemed like there were some 

challenges, and as Steve said, like it was in some ways 

appropriate to assign somebody to a to a program only 

after they completed. On the other hand, an enormous 

number of students drop out of programs before they 

complete them. That is, in some ways, a negative 

outcome, and it impacts their subsequent earnings. 

Likewise, they accumulate less debt, which can bias the 

debt to earnings metric. So, there is a strong case for 

including noncompleters in these metrics because they 

affect the outcomes, and they reflect some elements of 

how the institution is serving the student. The other 

thing I wanted to say beyond just the completers versus 

noncompleters was the other element of the potential 

earnings metrics and accountability metric is the 

earnings premium or the earnings that the student earns 

after they leave school. So, the 2014 rule included that 

debt to earnings metric, which certainly, you know, is 

one potential pillar of an accountability system. But 
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Committee Meetings - 01/19/22 

there are also schools where students leave the program 

with a lot of debt but don't boost their earnings and so 

their programs that can fail students on a different 

dimension by not leaving them with an education that 

allows them to do better than, for example, a high 

school graduate does. And so, another potential metric 

can be used that is widely available, easily produced by 

the Department of Treasury are those earnings outcomes. 

Thank you. 

MR. WAGNER: Thank you. And then back 

to the queue, let's see, Debbie, you're up. 

MS. COCHRANE: Thank you. I, you know, 

I was going to make a broader point, which I'll say a 

minute, but just on the point of noncompleters in 

particular since we're since we're getting into that. It 

just it seems to me that the answer about noncompleters 

in particular depends entirely on the metric you're 

using and the logic that's undergirding the metrics. So, 

I have a like in the 2011 rule, you know, noncompleters 

were excluded from debt to earnings, including the 

repayment rates. So, some good logic to that. So, I just 

think it's hard to have that conversation on 

noncompleters when it's divorced from a particular 

metric. My overall comment was really about just echoing 

the calls to really think about the 2014 rule as the 
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Committee Meetings - 01/19/22 

baseline for these discussions and really and 

particularly because of how heavily pressure tested that 

rule was and the core provisions have survived 

significant scrutiny. I mean, I think there's room for 

discussing some of the details and some of the questions 

in here, but I don't want to lose sight of the harms 

that are created by the lack of stability in this 

regulatory area. And I think if the goal of this role is 

to set reasonable standards that we think institutions 

can and should comply with and that will leave students 

better off, we are just not doing anyone any harm any 

favors by moving the ball all the time and regulating, 

unregulating, reregulating. We just need to set a 

standard and we need to go forward. And that's what's 

best all-around and clearly not good for students 

clearly not good for institutions. And of course, it 

also creates substantial pressure on state agencies. 

State agencies are often the first line of defense when 

it comes to helping students through closures, program 

closures, school closures, helping students find new 

programs that they can transfer into and find financial 

relief when needed. So, in particularly related to 

gainful employment, there were a lot of states across 

the country, California being one of them that wanted to 

regulate their own state rule in light of the rescission 
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Committee Meetings - 01/19/22 

of the federal rule in recent years. And a lot of 

states, including California, need to start from scratch 

if they're going to do it. And states generally don't 

have the administrative data sets that the federal 

government does and that the federal rule really heavily 

relied on. So, I think while it's very commendable that 

states one step up in this way and I know they're all 

trying, it's just simply less efficient to do that at 

the state level. So that is that is why I really suggest 

starting with the 2014 rule kind of tried and true just 

to get back to a place where we can have some stability. 

MR. WAGNER: Thank you, Debbie. 

Amanda, you have the floor. 

MS. AMANDA MARTINEZ: I just wanted to 

also echo and come out with the majority of the 

statements about the 2014 rule reinstating the framework 

there. Obviously, I think we can come together and 

hopefully we can come together to make improvements or 

adjustments and updates according to what we're seeing 

in the field and the outcomes students are making. And 

ultimately, I think it's you know why I think civil 

rights groups from our from our perspective, why we 

support the 2014 rule is for reasons that I won't be 

able to articulate in the limited time. But I think the 

first one is that when we think about the Higher 
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Committee Meetings - 01/19/22 

Education Act and its original promise, it was to ensure 

that all Americans would have access to a high quality 

education that then would, you know, that would 

hopefully once they reach that finish line and attain 

some those credits in that degree that that would, then 

they would be able to enter the workforce or the labor 

market with wages, you know, with accurate wages that 

would help them go through and achieve economic 

stability or move through into the middle class. You 

know, it was it was a tool used by Lyndon B. Johnson 

that would hopefully lessen inequality, income 

inequality, right? We were entering a stage of more 

industrialization. There was a need to fill the gap and 

to open access to educational opportunities, not just 

for some Americans, but for all Americans, especially 

those who were in the poverty line. And isn't it great 

we should be all excited to see that. That did happen, 

however, there's actors within this market that are 

disproportionately using that promise and that hope to 

some communities who were trying to obtain it and enroll 

and achieve that dream and kind of twisting it on its 

head. And I think that good racial policy that is 

equitable has to be targeted, has to go where the data 

is and the numbers are showing us where we need to go 

into help communities where otherwise have been 
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Committee Meetings - 01/19/22 

disenfranchised for more than three to four generations 

in this country. And the 2014 rule did that. It's shown 

proven mechanisms that it's helped those specific 

communities. It's helped women get well, it's helped 

black and Latino communities be given back that promise 

that they were they were stolen of. So, I think that's 

kind of where we're coming from, why the proven racial 

equity tool, this is the best tool we can have. Of 

course, it needs additional discussion and updates and 

improvements, but that's really where if this 

administration wants to do something for racial equity, 

this is where it needs, the floor needs to begin and 

it's clear and apparent the evidence is there. Those you 

know the, Brad, I have limited time when you know, it 

hurts me to hear 24 percent of the students, that's 

those are important. 24 percent of the students. Ok. 

MR. WAGNER: Okay, thank you, Amanda. 

Brad, your next. 

MR. ADAMS: Thank you. And as a 

reminder, my first point covered develop an 

accountability system that protects all students and all 

programs across all of our education. I want to thank 

Barmak and Amanda for agreeing that all students in all 

sectors need protection. We hope everyone agrees to this 

basic standard. We believe we have a solid way in the 
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Committee Meetings - 01/19/22 

statute to cover these comments. I want to emphasize 

that the Department absolutely has statutory authority 

to create a universal quality assurance system that 

could include components of the previous 2014 GE metrics 

as being referenced around this committee. In other 

words, there is no reason it has to attach his 

accountability system to the gainful employment language 

that severely limits its reach. It's true that as long 

as the Department decides to connect this accountability 

framework through gainful employment programs only, the 

accountability measures only apply to non-degree 

programs and those offered by proprietary institutions. 

That's because those are the only types of programs that 

are required to lead to gainful employment under the 

HEA. But there is a simple fix. Instead of attaching its 

accountability framework to the gainful employment 

concept, the Department could just build the framework 

under its Quality Assurance Authority. Student Defense 

actually published a report in 2020 that spelled out 

exactly how the Higher Education Act provides the 

Department the ability to protect all students across 

all institutions participating in the direct loan 

program at an institutional or programmatic level. And 

those institutions and programs are promoting strong 

outcomes, according to the report, Section 454 A of the 
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Committee Meetings - 01/19/22 

Higher Education Act delegates to the Secretary, the 

authority to implement a quality assurance system. 

Quality assurance system could include measures like 

repayment rates, debt to earning rates, earning 

thresholds, and those measures could apply to all 

institutions participating in the direct loan program to 

strengthen the higher education accountability. I'll 

drop the report in the chat for people to review during 

lunch. Meanwhile, there is no evidence that Congress 

ever intended for the Department to base an entire 

accountability system on the phrase gainful employment. 

The term has existed in the Higher Education Act since 

its inception in 1965, nearly 57 years. Not once in 

those 57 years, which includes eight full 

reauthorizations did Congress define or attribute this 

phrase as setting labor market threshold such as debt to 

earning measure. Subsequently, there is a good argument 

that trying to attach an accountability framework to the 

gainful employment language in the HEA exceeds the 

Department's authority. All this to say if we're serious 

about protecting students during this rulemaking that we 

need to protect all students, including the 75 percent 

of the students that are protected under the previous 

gainful employment rule, and we should do this under the 

authority clearly granted by Congress. 
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Committee Meetings - 01/19/22 

MR. WAGNER: Thank you, Brad. Next up, 

we have a Emmanual. 

MR. GUILLORY: Yes. I just wanted to 

quickly keep in mind that I hear that folks are 

proposing that we start with the 2014 rules as a base. 

And so, if we are to do something like that, then I just 

want to remind people that the Department did have some 

issues implementing the 2014 rule. And what I mean by 

that is it just took a little bit longer than what was 

expected for things to actually happen. So, for example, 

there was an original due date of when the completers 

list would come out and then the challenges to the 

completers list would come out and then the draft to 

earnings rates and the final [inaudible] earnings 

breaks. And, you know, because I think the Department 

undertook something that is still needed, maybe 

additional capacity or resources to implement timely. 

There was a delay in lag and when things actually took 

place versus when they initially thought they would take 

place. I'm not saying that's ultimately a bad thing per 

say. I'm just saying that with a 2014 rule it's quite 

complicated. And so, I just want to say, you know, 

remind folks of that if we were to go back to that rule. 

But also that particular rule obviously had a lot of 

comments as it relates to how do we hold these programs 
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Committee Meetings - 01/19/22 

accountable when it when you are looking at their annual 

percentages of 8 percent, if they the student, the 

student has a lower payment rate more than 8 percent of 

their annual income, then they potentially are not 

passing or if it's more than 20 percent of the 

discretionary income they were not passing versus 2010 

rule it was 12 and it was 30. And obviously in the 

former GE 2014 rule, you did have your passing and your 

zone and you're failing. And of course, a new construct 

could have that same metric. But I wanted to also keep 

in mind that even though a student may go through a 

particular program, especially a student of color and 

who could take on more debt because of so many other 

reasons once they actually enter the labor market, they 

are at a disadvantage than their white peers as well. 

And so, the latest fourth quarter, 2021 average data for 

Bureau of Labor Statistics is telling us that if you're 

16 years or older, your median weekly earnings for a man 

is $1,103. Your median weekly earnings for a woman is 

$930. And if we look at the numbers based on race, 

white, it's $1,030, black is $805, Asian is $1,384, and 

Hispanic or Latino, it's $799. So, if we're looking at 

the earnings to that is also a factor that's going to 

impact the programs and what would actually be fast 

passing or failing. 
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Committee Meetings - 01/19/22 

MR. WAGNER: Thank you, Emmanuel. We 

have Anne. 

DR. KRESS: I don't even know if this 

is allowable in this framework, but it seems like 

there's a lot of support around this particular question 

in providing feedback to the Department that the 2014 

standards should be the baseline. And I didn't know if 

there would be value and sort of doing a temperature 

check from the negotiators because my understanding of 

these open-ended questions is that they are designed to 

inform the Department's thinking about the language they 

will propose. So, I just wanted to throw that out there. 

MR. MARTIN: Yeah, if we could 

certainly entertain a quick temperature check on. So, 

the question would be just saying indicating general 

support, general understanding that wouldn't be standing 

up the exact same rules, but general support for the 

2014 rule as a I think it's been described as a as a 

baseline for other rules, so I'm willing to entertain 

that. 

MR. WAGNER: We have two more people 

to comment, and then if we could take you want to take 

the temperature check at that point for the first 

question and then we can move to the next? Does that 

make sense, Greg? 
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Committee Meetings - 01/19/22 

MS. JEFFRIES: I'm going to suggest 

that we do that temperature check on the baseline right 

now. And then take Jaylon and Barmak and then move on to 

question two as we are fast approaching the lunch time. 

MR. MARTIN: Sounds good, Cindy. I 

agree with that. 

MR. WAGNER: Sounds great. Thanks for 

jumping in Cindy. And then you can take a temperature 

check through thumbs. Make sure you raise them high. We 

can see them. No, I'm sorry, I did see there is one 

thumbs down. I've got that thank you. 

MR. MARTIN: Thank you, everybody. 

MR. ADAMS: Yes Kevin, the thumbs down 

is for the statutory reasons described in my second part 

of my statement, not the metrics themselves, if applied 

to everyone. 

MR. WAGNER: Got it. Thank you for 

clarifying Brad. As we mentioned, and just to tee up to 

Jaylon, he has joined the table. He is in for Carolyn 

Fast for the consumer advocates. So, Jaylon, you have 

the floor and then Barmak. 

MR. ADAMS: Kevin, I'm curious, is it 

allowed to do a temperature check on the committee's 

thoughts around protecting all students and all programs 

at all institutions? Would that be an appropriate 
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Committee Meetings - 01/19/22 

temperature check that we can take? 

MR. MARTIN: I would like not to do 

that at this moment. 

MR. ADAMS: Is there a reason why we 

can't request that temperature check, Greg? 

MS. JEFFRIES: Let me, Greg, let me 

just address the facilitators are charged with 

administering the process and the protocols, so we will 

take that under advisement, Brad, and get back to you. 

MR. ADAMS: I would love to do that 

before the end of the session today, if possible, Cindy. 

Thank you. 

MS. JEFFRIES: Okay. We will have a 

response for you later. Thank you. 

MR. WAGNER: Thanks, Cindy. Jaylon? 

MR. HERBIN: Thank you. So, want to 

start by saying yes, obviously, we agree with 2014 

should be the baseline for moving forward with this. 

What I would like to also see I'd be interested to see 

is the data on the earnings threshold as well. But also, 

what I want to do is prevent another [inaudible] college 

from reoccurring. We have to look at is see here is that 

a lot of the students that attend these universities are 

nontraditional students that are obtaining these 

degrees. So, these are students of color. These are full 
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Committee Meetings - 01/19/22 

time students. Some have families, some have children 

that come into these programs to obtain a degree. And 

what we're also seeing is that they are also taking out 

the most debt as well to complete this program at a 

speed that is told to them by the university or by that 

particular program that they can receive it by. So, what 

I would encourage us to do is to be able to have more 

accountability and enforcement from the Department to 

protect these borrowers. We are trying to bridge the 

racial wealth gap and the cheating [phonetic] programs. 

[Inaudible] College is only increasing the racial 

disparities that these student debt crisis has brought 

forward. 

MR. WAGNER: Thank you, Jaylon. 

Barmak? 

MR. NASSIRIAN: Yeah, I was going to 

make other points, but I want to engage the point that 

Brad is raising before a final ruling. It's sounds to 

me. And in fact, this is more of a procedural issue for 

the facilitators, perhaps. Brad, it sounds like you 

simply do not believe that the task we have been charged 

with, which is to develop regulations for gainful 

employment under the existing statute, is the task we 

ought to be engaged in. You know, there are lots of 

other things I do believe in, right? I mean, I do 
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believe in equality. I believe in racial justice. 

There's lots of other things we could talk about and 

take votes on, but we're not here to just address 

abstract philosophical points as relevant as they may 

be, but rather to operate within the scope of the charge 

this committee has, and that is to develop regulations 

pursuant to the statutory authority that has been cited. 

You know, part D is not under consideration here as far 

as I'm concerned. So as much as I like the student 

defense paper, that is not something we need to we have 

any authority to address in this proceeding. And it 

really sort of brings up the issue of good faith to some 

extent. If you really don't believe we have, if you 

don't believe in the task we're engaged in, I just 

wonder why you'd want to negotiate it. I hope we all 

agree that we're here to develop regulations so we can 

argue over what those regulations should be but the idea 

that that the effort itself is not legitimate is kind of 

problematic for me. One other point I want to make with 

regard to the disparate impact of the rule on minority 

communities based on fundamental injustices within the 

labor market, which are very real. Look, that should not 

be used as an excuse to saddle minorities with more 

debt. I'm hoping that what we develop will end up 

incentivizing practices that in recognition of the of 
 

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the of the fundamental unfairness that and 

discrimination that minorities face in the labor market. 

Maybe that the rule we develop will create incentives 

not to finance so much of their education with debt. So, 

I don't I don't know that you're doing anybody any favor 

in saying that, you know, women earn less, or African 

Americans face discrimination in terms of wages, and 

therefore they ought to be allowed to borrow even more. 

I feel like that's or that we should allow institutions 

to package them with more debt. So, we need to be 

mindful of the two sides of that argument it seems to 

me. 

MR. WAGNER: Thank you, Barmak. We in 

the interest of time would say it's 12:22 eastern. There 

is Johnson and Brad in the queue. We can hear from them 

and then I think that should be able to wrap up question 

number one. I do see Emmanual, so if you can keep your 

comments short that be appreciated. So, Johnson you have 

the floor. 

MR. TYLER: Hi. So, I was in the 2017 

rulemaking, and I negotiated rulemaking on the gainful 

employment, and one of the issues that came up was if a 

lot of people drop out of a program, you're not going to 

get a statistically valid amount of information to put 

into a GE metric. You need to have a certain number of 
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Committee Meetings - 01/19/22 

people. And so, if you're only counting completers, 

you're not actually assessing the value of that program. 

So, I know it's a nuance thing. I don't have a specific, 

statistically valid way of assessing it. But I do think, 

as Debbie mentioned, when you're talking about 

completers and noncompleters, you have to think of what 

the metric is. You're using what you're trying to 

measure. If a lot of students are dropping out of a 

school and that doesn't get measured in any way in the 

metric that's going to be a problem because they're 

obviously not getting supported by the school. But also 

they're, you know, they may be paying an exorbitant 

amount even when they drop out for the little bit that 

they were there. So. 

MR. WAGNER: Thank you. Brad and then 

Emmanual. And that should wrap it up, I believe. 

MR. ADAMS: Thank you. I'll respond to 

Barmak question that I am definitely here in good faith, 

and we've been asked to negotiate something that is not 

even been issued a red line yet. We've got nine 

questions that we've been given to develop a framework 

for gainful employment, and we have provided a statutory 

way to the Department to include protections for all 

students at all institutions in all programs. And we 

think that is of utmost importance. And there are good 
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and bad players, I'm sure, in every part of the sector 

within higher education. We're not here to try and deny 

that, but we're here to protect all students. And I 

think it's contrary to what Undersecretary Kvaal decided 

in his comments yesterday. The secretary's comments last 

summer, they both have come out and said that all 

students need protection. That's why I'm here to ensure 

that the metrics that this committee agrees to can be 

applied fairly and equitably to all students. That's the 

end goal. 

MR. WAGNER: Emmanual, you're up. 

MR. GUILLORY: I just want to quickly 

clarify that I by no means and advocating that students 

take on more debt. When I went through the statistics, I 

just want to state the facts and the numbers of what we 

have today and the data that we can see from the 

earnings and the inequities in that, even for students 

of color who have degrees still earn less than their 

white peers. And so, I wanted to just make sure that 

that was articulated to my colleagues, but not by any 

means am I here to support, then there should still be 

programs that are failing these students and they're 

going into more debt and being harmed even more. I also 

wanted to clearly state that the most recent 2014 rule, 

the private nonprofit sector had the most programs that 
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were under consideration [audio]. We had over 18,000 

programs for-profit sector had over 9,000 programs. And 

so, with that being said, we will have a lot of nondegree programs in our sector that will be held 

accountable to this. I want to make sure that they are 

held accountable accordingly 100 percent. But I just 

want to make sure that we are taking into consideration 

what's happening to these students once they do complete 

the program and then go into the labor market and the 

inequities that exist based on, unfortunately, the color 

of their skin. 

MR. ADAMS: Thank you, Emmanual. You 

know, you may be accurate on the number of programs, and 

I have not researched that information, but according to 

the latest IPEDS research, we performed 75 percent of 

total students on a program basis. The total students 

were not protected under the previous gainful 

employment. It proprietary institutions currently today, 

according to 2019, data only make up 8 percent of the 

total students attending higher education institutions 

today. About 1.2 million out of somewhere in the 19 19.5 

total student range. That means there's about 18.2 

million students attending non or nonprofit and public 

institutions going somewhere else besides a proprietary 

institution get their education. We believe that all 
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those students deserve the same protections that have 

been given to the proprietary industry. And we have 75 

percent of students not covered by this rule. It's just 

unfortunate, and I have a feeling that many of the 

students that we might hear from in the public comment 

period can speak to speak to the fact that they've been 

unable to be gainfully employed after graduating some 

programs from these nonprofits. So again, it's not the 

metrics we want to be fair and equitable to all 

students. But if 75 percent are not covered, that's the 

problem. We need to address that problem as a committee. 

MR. WAGNER: Thank you. Beverly, we 

only have two minutes before lunch, so if you could make 

it quick, we'd appreciate it. Beverly, you're up. 

DR. HOGAN: I just want to reference 

something that Emmanual said, and I put it in the chart. 

But the reference to debt to earnings and looking at the 

earning capacity based on race, ethnicity and gender 

refer to the weight of that if used as a metric, because 

those are factors over which I don't think the students 

or Institutions largely have any control. These are 

results that outcomes of injustices that still remain in 

our America today. 

MR. WAGNER: Thank you, Beverly. I 

want to thank everyone for their comments in the morning 
 

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session. Just want to confirm that we're going to be 

picking up with question two after lunch. We have a 

lunch scheduled from 12:30 to 1:00 o'clock, so the live 

feed will go down and then come back up at 1:00 o'clock. 

APPENDIX 

Department of Education, Office of Postsecondary Education 

Zoom Chat Transcript 

Institutional and Programmatic Eligibility Committee 

Session 1, Day 2, Morning, January 19, 2021 

From Brady FMCS Facilitator to Everyone: 

Feel free to send any tech questions or hiccups my way 

this AM! 
 

 

 

 

 

 

 

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From Johnson (P) Legal Aid to Everyone: 

Jessica Ranucci will continue negotiating on this 

morning's issues for the Legal Aid constituency. 

From Anne Kress (P) Comm Colleges to Everyone: 

Can we get a CV for this individual as we did for the 

others? 

From Anne Kress (P) Comm Colleges to Everyone: 

Thank you 

From Brad Adams (P - Proprietary Institutions) to 

Everyone: 

+1 on Carolyn 

From Anne Kress (P) Comm Colleges to Everyone: 

+! to concerns expressed by @Yael and @Carolyn — this 

is a critical issue for students and the actual language is 

very important 

From Sam (P) Fin Aid Admin to Everyone: 

+1 @Yael 

From Debbie Cochrane (P), State agencies to Everyone: 

Would it be an option to add "including but not 

limited to" with respect to the references? 

From Beverly (primary/MSIs) to Everyone: 

+1 to Yael's comment 

From Ernest Ezeugo (P), Students/Student Loan Borrowers 

to Everyone: 

+1 Barmak 

From Jamie Studley (P) Accrediting Agencies to Everyone: 

+1 to Debbie's suggestion. That would cover Barmak's 
 

 

 

 

 

 

 

 

 

 

 

 

 

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proposal to allow the Secretary to take into account state 

decisions. 

From Carolyn Fast (P), Consumer Advocates/Civil Rights 

Organizations to Everyone: 

+1 to Jessica re: need to give Department ability to 

take action against misreps 

From Ernest Ezeugo (P), Students/Student Loan Borrowers 

to Everyone: 

+1 Jessica's comment. Also concerned that without 

broad interpretation, the Department's ability to step in 

on misrepresentation will be relegated to far after damage 

has been done to students. 

From Yael Shavit (A) -- State AGs to Everyone: 

+1 o debbie 

From Jessica Ranucci (A)- Legal Aid to Everyone: 

To clarify, Debbie’s comment, you mean to propose 

regulatory text of section (m) that would state “including 

but not limited to” the definitions in subpart F and R, 

right? 

From Beverly (primary/MSIs) to Everyone: 

+1 to Barmak 

From Debbie Cochrane (P), State agencies to Everyone: 

Yes that is what I meant. I accidentally muted myself! 

From Jessica Ranucci (A)- Legal Aid to Everyone: 

Thanks. +1 to Debbie’s idea. 

From Jamie Studley (P) Accrediting Agencies to Everyone: 

Is the main issue here whether we support adding a 

provision on misrepresentation, recognizing there are 

concerns, Qs and suggestions about the scope? 
 

 

 

 

 

 

 

 

 

 

 

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From Brad Adams (P - Proprietary Institutions) to 

Everyone: 

+1 to Kelli's comment 

From Anne Kress (P) Comm Colleges to Everyone: 

My question is the same as @Jamie’s—what are we 

temperature checking? 

From Beverly (primary/MSIs) to Everyone: 

+1 to Annes comment in this chat 

From Jamie Studley (P) Accrediting Agencies to Everyone: 

is this a way to reply to Kelli: having it here (over 

and above other compliance findings and actions), this 

would allow the Dept to consider that issue (alone or with 

other shortcomings) in determining that the school is not 

admin capable and not allowed to participate in Title IV 

programs. 

From Amanda (P) Civil Rights to Everyone: 

+Jessica 

From Anne Kress (P) Comm Colleges to Everyone: 

+1, great summary of the concerns @Jessica 

From Beverly (primary/MSIs) to Everyone: 

+1 to Jessica 

From Jamie Studley (P) Accrediting Agencies to Everyone: 

Could Greg or Cindy explain how advisors can be used 

(do negotiators call on them? ED only? at their own 

instance)? 

From Beverly (primary/MSIs) to Everyone: 

+1 to Keli 

From Johnson (P) Legal Aid to Everyone: 
 

 

 

 

 

 

 

 

 

 

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Hi I would like to switch out with Jessica Ranucci 

From Jessica Ranucci (A)- Legal Aid to Everyone: 

I’m going swap back in for Johnson for the remainder 

of administrative capability. Thanks. 

From Johnson (P) Legal Aid to Everyone: 

Hi Jessica and I are going to switch out. 

From Beverly (primary/MSIs) to Everyone: 

Thanks to Steve for the clarity. +1 

From Jessica Ranucci (A)- Legal Aid to Everyone: 

+1 to Beverly. Thanks, Steve. 

From Sam (P) Fin Aid Admin to Everyone: 

I have to step away for a few minutes. David Peterson 

will step in as Primary during that time. 

From Brad Adams (P - Proprietary Institutions) to 

Everyone: 

+1 to Debbie's comment 

From Brad Adams (P - Proprietary Institutions) to 

Everyone: 

I’ll go ahead and drop a data request in the chat: 

“How many high school diplomas has the Department found are 

invalid in the past five years? How many instances have 

there been in the past five years where an institution had 

reasonable evidence to believe that a high school diploma 

was invalid, but failed to follow its process for verifying 

the diploma as required under 34 CFR § 668.16?” 

From Debbie Cochrane (P), State agencies to Everyone: 

This conversation is getting muddied. Falsified 

transcripts is a serious integrity problem that needs to be 

addressed. If it is a fairly rare occurrence, that means it 
 

 

 

 

 

 

 

 

 

 

 

 

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should not raise significant concerns about burden. It does 

NOT mean the problem should not be addressed. 

From Jessica Ranucci (A)- Legal Aid to Everyone: 

+1 to Debbie 

From Ernest Ezeugo (P), Students/Student Loan Borrowers 

to Everyone: 

Hello Carney will be stepping up to the table for the 

rest of this conversation on administrative capability. 

From Jamie Studley (P) Accrediting Agencies to Everyone: 

+1 to Debbie. Seems like a reasonable and even elegant 

way to address the real problem areas 

From Barmak Nassirian (A) Servicemembers & Vets to 

Everyone: 

Removing #2 would deny the Secretary the ability to 

reject a participating institution's use of diploma mills 

as a way of circumventing the HS diploma requirement in the 

law. 

From Anne Kress (P) Comm Colleges to Everyone: 

+1 @Barmak 

From Beverly (primary/MSIs) to Everyone: 

+1 to Barmak's comments. 

From Jessica Ranucci (A)- Legal Aid to Everyone: 

Johnson Tyler is swapping back in for gainful 

employment. 

From Ernest Ezeugo (P), Students/Student Loan Borrowers 

to Everyone: 

Returning to the table. 

From Anne Kress (P) Comm Colleges to Everyone: 
 

 

 

 

 

 

 

 

 

 

 

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+1 to the AGs statement on using 2014 as a baseline— 

this was a sound and vetted/tested framework 

From Beverly (primary/MSIs) to Everyone: 

+1 to Yael's comment to use 2014 as baseline. The aim 

should remain to prevent student aid from being awarded to 

colleges that operate fraudulent and abusive programs. 

From David Socolow (A) State Agencies to Everyone: 

+1 to using 2014 GE rule as baseline 

From Johnson (P) Legal Aid to Everyone: 

If a lot of students drop out, you also can have such 

a small cohort in the program that you cannot generate a 

legitimate statistic regarding earnings 

From Brad Adams (P - Proprietary Institutions) to 

Everyone: 

here is the link to the video reference in my opening 

statement referencing that Secretary Cardona confirmed his 

view to the House Education and Labor Committee that all 

postsecondary institutions, regardless of tax status, 

should be treated the same under the law. his comment and 

question can be heard around 1:47:30. 

From Brad Adams (P - Proprietary Institutions) to 

Everyone: 

https://www.c-span.org/video/?512743-1/house-hearingdepartment-education-priorities 

From Anne Kress (P) Comm Colleges to Everyone: 

+1 @Debbie 

From Barmak Nassirian (A) Servicemembers & Vets to 

Everyone: 

Agree with deploying the additional metric of 

programmatic earnings outcomes vis-à-vis HS earnings as a 
 

 

 

 

 

 

 

 

 

 

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baseline 

From Carolyn Fast (P), Consumer Advocates/Civil Rights 

Organizations to Everyone: 

Jaylon Herbin will be joining the table in my place. 

From Johnson (P) Legal Aid to Everyone: 

+1 Amanda 

From David Socolow (A) State Agencies to Everyone: 

+1 to all Debbie's points, and especially wish to 

reinforce the importance of a federal GE rule using 

administrative datasets available at the federal level. 

Such data are more difficult to obtain at the state level, 

posing significant challenges to the establishment of State 

accountability standards based on students' labor market 

outcomes. 

From Anne Kress (P) Comm Colleges to Everyone: 

+1 @David 

From Brad Adams (P - Proprietary Institutions) to 

Everyone: 

Student Defense actually published a report in October 

2020 that spelled out exactly how the Higher Education Act 

provides the Department “the ability to protect all 

students across all institutions participating in the 

Direct Loan program, at an institutional or programmatic 

level, and ensure that those institutions and programs are 

promoting strong outcomes.” 

According to the report, Sec. 454(a) of the HEA delegates 

to the Secretary the authority to implement a quality 

assurance system. This quality assurance system could 

include measures like repayment rates, debt-to-earnings 

rates, and earnings thresholds, and those measures could 

apply to all institutions participating in the Direct Loan 

Program to strengthen higher education accountability. I’ll 
 

 

 

 

 

 

 

 

 

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drop the report in the chat 

(https://www.defendstudents.org/news/body/docket/100-DayDocket-Direct-Loan-Authority.pdf). 

From Beverly (primary/MSIs) to Everyone: 

+1 to Emmaunual's reference to disparity in earnings 

relative to race, ethnicity and gender. 

From Ashley Schofield (A) - MSIs to Everyone: 

+1 to Emmannual's comments 

From Brad Adams (P - Proprietary Institutions) to 

Everyone: 

Request to take a temperature check regarding whether 

the committee believes all students in all programs at all 

institutions should be protected. 

From Carolyn Fast (P), Consumer Advocates/Civil Rights 

Organizations to Everyone: 

I'm coming back to table now. 

From Yael Shavit (A) -- State AG to Everyone: 

+1 Barmak 

From Carolyn Fast (P), Consumer Advocates/Civil Rights 

Organizations to Everyone: 

+1 Barmak 

From Ernest Ezeugo (P), Students/Student Loan Borrowers 

to Everyone: 

+1 Debbie and Johnson 

From Beverly (primary/MSIs) to Everyone: 

I agree with Barmak. However the disparity in earnings 

is useful to the discussion of debt to earnings in terms of 

weight because it is beyond the students and the 

institution's power to control. It is largely an outcome of 
 

 

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the injustices that are still present in our America. 

From Barmak Nassirian (A) Servicemembers & Vets to 

Everyone: 

Beverly is right! I hope we can create incentives for 

institutions to do their part in promoting racial justice.