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Subpart Q – Gainful Employment (GE) Programs 

1. §668.401 Scope and purpose 

2. §668.402 Definitions 

3. §668.403 Gainful employment framework 

4. §668.404 Calculating D/E rates

5. §668.405 Issuing and challenging D/E rates 

6. §668.406 Alternate earnings appeals 

7. §668.407 Calculating pCDR 

8. §668.408 Issuing and challenging pCDR 

9. §668.409 Determining loan portfolio repayment 

performanceFinal determination and consequences of GE 

measures 

10. §668.410 Issuing and challenging loan portfolio repayment 

performance determinations 

11. §668.411 Final determination and consequences of GE 

measures 

12.10. §668.412 Reporting requirements for GE programs 

13.11. §668.413411 Disclosure requirements for GE programs 

14.12. §668.414412 Calculating, issuing, and challenging 

completion, withdrawal, and repayment rates and median 

earnings 

15.13. §668.415413 Application requirement for new GE 

programs 

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16.14. §668.416414 Certifications for GE programs 
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§668.401 Scope and purpose. This subpart applies to an 

educational program offered by an eligible institution that 

prepares students for gainful employment in a recognized 

occupation, and establishes the rules and procedures under 

which-- 

(1) The Secretary determines that the program is eligible 

for title IV, HEA program funds; 

(2) An institution reports information about the program 

to the Secretary; and 

(3) An institution discloses information about the program 

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

subpart. 

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

annual loan payment compared to the annual earnings of the 

students who completed the program, as calculated under 

§668.404. 

Classification of instructional program (CIP) code: A 

taxonomy of instructional program classifications and 

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

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

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

“CIP family” of related programs shares the first two digits of 

a CIP code, and programs that are “substantially similar” to one 

another share the first four digits of a CIP code. 

Credential level: The level of the academic credential 

awarded by an institution to students who would complete the 

program. For purposes of this subpart, the credential levels 

are: less than one year undergraduate certificate or diploma, 

one year or longer but less than two years undergraduate 

certificate or diploma, two years or longer undergraduate 

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

post-baccalaureate certificate, master’s degree, doctoral 

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

income rate and annual earnings rate as calculated under 

§668.404. 

Discretionary income rate: The percentage of a GE 

program’s annual loan payment compared to the discretionary 

income of the students who completed the program, as calculated 

under §668.404. 

Gainful employment program (GE program): An educational 

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

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

Office of Postsecondary Education ID (OPEID) number, the 

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

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

GE measures: Collectively, theThe D/E rates, and the 

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

repayment performance as described in this subpart. 

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

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

marketing materials, or other official publicationpublications

for a student to complete the requirements needed to obtain the 

degree or credential offered by the program. 

Loan portfolio repayment performance: The measure of 

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

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

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

Department of Health and Human Services and available at 

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

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

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

under §668.407. 

Prospective student: An individual who has contacted an 

eligible institution for the purpose of requesting information 

concerning admission to that institution. 

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

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

program at an eligible institution. 

Title IV loan: A loan authorized under the Federal Perkins 

Loan Program (Perkins Loan), the Federal Family Education Loan 

Program (FFEL Loan), or the William D. Ford Direct Loan Program 

(Direct Loan). 

Two-year period: The period covering two consecutive award 

years that are-- 

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

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

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

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

2011-2012; or 
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(b) For a program whose students are required to complete 

a medical or dental internship or residency, the sixth and 

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

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

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

2007-2008 and 2008-2009. For this purpose, a required medical 

or dental internship or residency is a supervised training 

program that-- 

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

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

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

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

facility that offers post-graduate training; and 

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

by a State and board certified for professional practice or 

service. 
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§668.403 Gainful employment program framework. 

(a) General. A program provides training that prepares 

students for gainful employment in a recognized occupation if 

the program-- 

(1) Satisfies the applicable application and certification 

requirements in §§668.415413 and 668.416414; and 

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

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

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

repayment performance of its loan portfolio as described in 

paragraph (b)(3). 

(b) GE measures. (1) Debt-to-earnings rates. (D/E 

rates). For each award year and for each eligible GE program 

offered by an institution, the Secretary calculates two D/E 

rates, the discretionary income rate and the annual earnings 

rate, using the procedures in §§668.404-668.406. 

(2) Program cohort default rate. (pCDR). For each fiscal 

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

the Secretary calculates the pCDR as describedusing the 

procedures in §668.407. 

(3) Loan portfolio repayment performance. For each award 

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

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

procedures in §668.409. 

(c) Outcomes of GE measures. 

(1) D/E rates. 

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

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

20 percent; or 

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

eight percent. 

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

(A) Its discretionary income rate is greater than 30 

percent or the income for the denominator (the GE program’s mean 

or median annual or discretionary earnings) of the rate is 

negative or zero; and 

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

the denominator is zero. 

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

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

(A) Discretionary income rate is greater than 20 percent 

but less than or equal to 30 percent; or 

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

less than or equal to 12 percent. 

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

ineligible GE program if it-- 

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

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

calculated; or 

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

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

calculated. 

(2) pCDR. 

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

for the most recent fiscal year for which pCDR is calculated is 

less than 30 percent. 

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

pCDR for the most recent fiscal year for which pCDR is 

calculated is greater than or equal to 30 percent unless the GE 

program is ineligible under paragraph (c)(2)(iii)(A).. 

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

ineligible if-- 

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

pCDR is calculated is greater than 40 percent; or 

(B) It it fails the pCDR measure for three consecutive 

fiscal years for which pCDR is calculated. 

(3) Loan portfolio repayment performance. 

(i) A GEthe program’s loan portfolio repayment performance 

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

determined is not negatively amortized.pCDR is calculated.

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

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

year for which the loan portfolio repayment performance is 

determined is negatively amortized. 

(iii) For the purpose of loan portfolio repayment 

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

of any three consecutive award years for which the loan 

portfolio repayment performance is measured. 

(d) Discontinued programs. Except as provided in 

§668.404(f) with respect to D/E rates, the Secretary calculates 

D/E rates for a GE program for each award year in which students 

completed that program during the two-year period, and 

calculates a pCDR for a program for any fiscal year for which a 

pCDR is calculated under §668.407, without regard to whether the 

institution discontinued that program during the award or fiscal 

year, as applicable. 

 
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§668.404 Calculating D/E rates.

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

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

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

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

Guideline)). 

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

higher of the mean or median annual earnings. 

(b) Annual loan payment. The Secretary calculates the 

annual loan payment for a GE program by-- 

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

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

loan debt incurred by each student as determined under paragraph 

(d) of this section; and lesser of--

(i) The loan debt incurred by each student as determined 

under paragraph (d); and 

(ii) The total amount of tuition and fees the institution 

assessed each student for attendance in the program. 

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

repayment period using thean annual interest rate that is the 

lesser of-- 

(i) The annual interest rate on Federal Direct 

Unsubsidized Loans for undergraduate students who were in 
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repayment in effect on the day the Secretary calculates the D/E 

rates for the award year; or 

(ii) The lowest annual interest rate on Federal Direct 

Unsubsidized Loans for undergraduate students who were in 

repayment during the foursix years prior to the startend of the 

two-year period. 

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

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

currently available mean and median annual earnings of the 

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

and who are not excluded under paragraph (e); and 

(2) The Secretary uses the higher of the mean or median 

annual earnings to calculate the D/E rates. 

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

student, the Secretary-- 

(1) Includes the amount of FFEL and Direct Loanstitle IV 

loans that the student borrowed for attendance in the GE program 

(Federal PLUS Loans made to parents of dependent students, 

Direct PLUS Loans made to parents of dependent students or, and

Direct Unsubsidized Loans that were converted from TEACH Grants 

are not included), any private education loans that the student 

borrowed for attendance in the GE program and that were required 

to be reported by the institution, and any debt originating 

fromcredit extended by, or on behalf of, the institution, such 
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as from institutional financing or payment plans, that the 

student is obligated to repay uponafter the student’s completion 

of the program regardless of who holds the debt; 

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

student for attendance in any GE program at the institution to 

the highest credentialed GE program completed by the student at 

the institution; and--

(i) Undergraduate GE program at the institution to the 

highest credentialed undergraduate GE program subsequently 

completed by the student at the institution; or 

(ii) Post-baccalaureate GE program at the institution to 

the highest credentialed graduate degree GE program completed by 

the student at the institution; and 

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

attendance in programs at other institutions. However, the 

Secretary may include loan debt incurred by the student for 

attending GE programs at other institutions if the institution 

and the other institutions are under common ownership or 

control, as determined by the Secretary in accordance with 34 

CFR 600.31. 

(e) Exclusions. The Secretary excludes a student from 

both the numerator and the denominator of the D/E rate 

calculations if the Secretary determines that-- 
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(1) One or more of the student’s FFELtitle IV loans or 

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

least 60 consecutive days during the calendar year for which the 

Secretary obtains earnings information under paragraph (c); 

(2) One or more of the student’s FFELtitle IV loans or 

Direct Loans are under consideration by the Secretary, or have 

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

total and permanent disability, under 34 CFR 674.61, 682.402,

and 685.212; 

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

for at least 60 consecutive days in an eligible institution 

during the calendar year for which the Secretary obtains 

earnings information under paragraph (c); 

(4) The student completed a higher credentialed GE program 

at the institution subsequent to completing the program; or 

(5) The student died. 

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

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

(1) Fewer than 10 students completed the program during 

the two-year period; or 

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

the program as provided under paragraph (c). 

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

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

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

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

for the program by using-- 

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

program during the most recently completed award year; and 

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

under paragraph (c). 

(2) For the award years listed in paragraph (g)(1) of this 

section,), the Secretary determines the final D/E rates for the 

program by using the lower of the draft D/E rates calculated 

under paragraphs (a)-(f) or the transitional draft D/E rates 

calculated under this paragraph (g). 

(3) The institution may challenge the transitional draft 

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

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

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

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

program at an institution by-- 

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

program during the applicable two-year period and providing it 

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

(2) Allowing the institution to correct the information 

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

this section;);

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

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

this section;); 

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

the institution, as described in paragraph (e) of this 

section;); 

(5) Allowing the institution to challenge the median loan 

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

paragraph (f) of this section;);

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

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

and 

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

final D/E rates for the next award year for which D/E rates are 
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calculated, allowing the institution to appeal the final D/E 

rates by submitting an alternate earnings data survey, as 

provided in §668.406. 

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

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

(i) Identifying the students who completed the program 

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

the institution under §668.412410; and 

(ii) Removing any student who is excluded under 

§668.404(e). 

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

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

Secretary presumes that the list of students and the identity 

information for those students are correct unless, as set forth 

in procedures established by the Secretary, the institution 

provides evidence to the contrary satisfactory to the Secretary. 

The institution bears the burden of proof that the list is 

incorrect. 

(2) No later than 3045 days after the date the Secretary 

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

(i) Provide evidence showing that a student should be 

included on or removed from the list pursuant to §668.404(e); or 
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(ii) Correct or update a student’s identity information 

and the student’s program attendance information provided for a 

student on the list. 

(3) After the 3045-day period expires, the institution 

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

identity or program information of those students. 

(4) The Secretary considers the evidence provided by the 

institution and either accepts the correction or notifies the 

institution of the reasons for not accepting the correction. If 

the Secretary accepts the correction, the Secretary uses the 

corrected information to create the final list. 

(d) Obtaining earnings data. The Secretary submits the 

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

the Secretary-- 

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

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

not in individual form; and 

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

list that SSA could not match. 

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

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

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

§668.404. 
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 (2) If SSA reports that it was unable to match one or more 

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

include in the calculation of the median loan debt the same 

number of students with the highest loan debts as the number of 

students whose earnings SSA did not match. For example, if SSA 

is unable to match three students, the Secretary does not 

include the three students with the highest loan debts in the 

calculation of the median loan debt. 

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

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

earnings obtained from SSA and the individual student loan 

information used to calculate the rates, including the loan debt 

that was used in the calculation for each student. 

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

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

public information. 

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

(1) The Secretary presumes that the loan debt information 

used to calculate the median loan debt for the program under 

§668.404 is correct unless the institution provides evidence, as 

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

inaccurateincorrect. The institution bears the burden of proof 

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

how it should be corrected. 
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(2) No later than 45 days after the Secretary notifies an 

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

institution may challenge the accuracy of the loan debt 

information that the Secretary used to calculate the median loan 

debt for the program under §668.404 by submitting evidence, in a 

format and by a process determined by the Secretary, 

demonstratingthat demonstrates that the median loan debt 

calculated by the Secretary is inaccurateincorrect. 

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

not consider-- 

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

that SSA provided to the Secretary; 

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

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

year; or 

(iii) Any challenge that is not timely submitted. 

(4) The Secretary considers the evidence provided by an 

institution challenging the median loan debt and notifies the 

institution of whether the challenge is accepted or the reasons 

why the challenge is not accepted. 

(5) If the information from an accepted challenge changes 

the median loan debt of the program, the Secretary recalculates 

the program’s draft D/E rates. 
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(6) Except as provided under §668.406, an institution that 

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

waives any objection to those rates. 

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

period and subject to resolution of any challenge under 

paragraph (f) of this section,), a GE program’s draft D/E rates 

constitute its final D/E rates. 

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

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

determination described in §668.411409(a). 

(3) After the Secretary provides the notice of 

determination to the institution, the Secretary may publish the 

final D/E rates for the program. 

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

An institution must ensure that any material that it submits to 

make any correction or challenge under this section, or an 

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

format acceptable to the Secretary as described in this subpart 

and consistent with any instructions provided to the institution 

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

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

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

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

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

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

mean or median annual earnings the Secretary obtained from SSA 

and the mean or median annual earnings derived from an 

institutional survey conducted in accordance with the 

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

warrant revision to the final D/E rates.

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

this section, an institution must-- 

(1) Conduct a survey of earnings information from students 

who completed the program during the applicable two-year period 

by following the instructions contained in an NCES-developed 

Earnings Survey Form issued by the Secretary in a notice 

published in the Federal Register. The institution may include 

in the survey earnings information obtained from students who 

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

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

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

received title IV, HEA program funds; 

(2) Certify that the survey was conducted in accordance 

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

report prepared by an independent public accountant or 

independent governmental auditor, as appropriate, that the 

survey was conducted in accordance with the standards set forth 

in the NCES Earnings Survey Form. The attestation must be 

conducted in accordance with the attestation standards contained 

in the Government Accountability Office’s Government Auditing 

Standards promulgated by the Comptroller General of the United 

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

successor site), and with procedures for attestations contained 

in guides developed by and available from the Department of 

Education's Office of Inspector General. 

(c) Alternate earnings appeal procedure. 

(1) In accordance with procedures established by the 

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

§668.405 and the notice of determination under §668.411409, the 

institution must-- 

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

earnings data no earlier than the date that the Secretary 

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

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

date the Secretary issues the notice of determination, pursuant 

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

under §668.411409(a); and 
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(ii) Submit the survey of earnings and all supporting 

documentation as provided for under paragraph (b) of this 

section no later than 60 days after the date the Secretary 

issues the notice of determination. 

(2) An institution that timely submits an alternate 

earnings appeal that meets the requirements of this section is 

not subject to the provisions of §668.411409(c)-(e) while the 

Secretary considers the appeal. If the Secretary has published 

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

will reflect that they are under appeal. 

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

appeal submission is not sufficient to warrant revising the 

final D/E rates under §668.411409(a), the Secretary notifies the 

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

under §668.411409(a) remain the final D/E rates for the program 

for the award year; or 

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

appeal submission is sufficient to warrant revising the final 

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

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

D/E rates for the program for the award year under 

§668.411409(a). If the Secretary has published final D/E rates 

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

to reflect the new final rates.
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§668.407 Calculating pCDR. 

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

determines the pCDR of a GE program using the same methodology 

the Secretary uses to calculate the institutional cohort default 

rate (CDR) underpursuant to section 435 of the HEA. The 

standards and procedures currently in effect are set forth in

subpart N of this part. 

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

and standards in subpart N to calculate pCDR, the Secretary 

considers each reference to the “institution” to apply 

separately to the institution with respect to each of the GE 

programs at the institution, and considers each provision that 

describes an action, determination, or consequence that applies 

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

apply to the institution separately with respect to each of the 

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

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

the institution of the pCDR for a GE program determined under 

§668.407. The institution may challenge or appeal the pCDR 

under the procedures in subpart N of this part. 

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

in subpart N to this section, the Secretary considers each 

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

the GE programs at the institution, and considers each provision 

that describes an action, determination, or consequence to apply 

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

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

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

determines whether the loan portfolio of a GE program is 

negatively amortized by-- 

(1) Determining the outstanding principal balance of the 

portfolio at the beginning of the most recently completed award 

year. The beginning outstanding principal balance includes any 

unpaid interest that has been capitalized; 

(2) Determining the outstanding principal balance of the 

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

completed award year; and 

(3) Comparing the beginning and ending outstanding 

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

ending outstanding principal balance is greater than the 

beginning outstanding principal balance, the portfolio is 

negatively amortized. 

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

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

Direct Loans for students who were enrolled in the GE program 

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

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

loan portfolio repayment performance calculations if the 

Secretary determines that-- 

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

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

60 consecutive days during the calendar year for which the 

Secretary obtains earnings information under paragraph (c) of 

this section; 

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

Loans are under consideration by the Secretary, or have been 

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

and permanent disability, under 34 CFR 682.402 and 685.212; 

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

for at least 60 consecutive days in an eligible institution 

during the calendar year for which the Secretary obtains 

earnings information under paragraph (c) of this section; 

(4) The student completed a higher credentialed GE program 

at the institution subsequent to completing the program; or 

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

determinations. 

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

year 2014-2015, the Secretary determines the loan portfolio 

performance for a GE program at an institution by-- 

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

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

(b) of this section; 

(2) Allowing the institution to correct the information 

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

this section; 

(3) Making an initial determination of the loan 

portfolio’s performance and notifying the institution, as 

provided in paragraph (d) of this section; 

(4) Allowing the institution to challenge the beginning 

and ending outstanding principal balances of the GE program’s 

loan portfolio used to make the initial determination of the 

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

this section; and 

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

repayment performance and notifying the institution, as provided 

in paragraph (f) of this section. 
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(b) Creating the list of students. (1) The Secretary 

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

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

program and entered repayment during the applicable two-year 

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

and 

(ii) Removing any student who is excluded under 

§668.409(c). 

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

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

Secretary presumes that the list of students and the identity 

information for those students are correct unless the 

institution provides evidence to the contrary satisfactory to 

the Secretary. The institution bears the burden of proof that 

the list is incorrect. 

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

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

(i) Provide evidence showing that a student should be 

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

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

and the student’s program attendance information provided for a 

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

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

identity or program information of those students. 

(4) The Secretary considers the evidence provided by the 

institution and either accepts the correction or notifies the 

institution of the reasons for not accepting the correction. If 

the Secretary accepts the correction, the Secretary uses the 

corrected information to create the final list. 

(d) Initial determination of loan portfolio performance.

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

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

 (2) The Secretary notifies the institution of the initial 

determination of the GE program’s loan portfolio performance and 

provides the beginning and ending outstanding principal balances 

used to make the determination. 

(3) The initial determination of loan portfolio 

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

of this section are not considered public information. 

(e) Institutional challenges to initial determination of 

loan portfolio performance. (1) The Secretary presumes that 

the beginning and ending outstanding principal balances used to 

make the initial determination of the GE program’s loan 

portfolio repayment performance under §668.409 are correct 

unless the institution provides, as provided in paragraph 
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(e)(2), that the information is inaccurate. The institution 

bears the burden of proof to show that the outstanding principal 

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

corrected. 

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

institution of the initial determination of loan portfolio 

performance for a GE program, the institution may challenge the 

accuracy of the beginning and ending outstanding principal 

balances that the Secretary used to make the initial 

determination for the program under §668.409 by submitting 

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

demonstrating that the outstanding principal balances are 

inaccurate. 

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

not consider-- 

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

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

portfolio performance is based for an award year; or 

(iii) Any challenge that is not timely submitted. 

(4) The Secretary considers the evidence provided by an 

institution challenging the beginning or ending outstanding 

principal balances, or both, and notifies the institution of 

whether the challenge is accepted or the reasons why the 

challenge is not accepted. 
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(5) If the information from an accepted challenge changes 

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

program, the Secretary revises the determination of the GE 

program’s loan portfolio repayment performance. 

(6) An institution that does not timely challenge the 

initial determination of a GE program’s loan portfolio repayment 

performance waives any objection to that determination. 

(f) Final determination of loan portfolio performance.

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

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

a GE program’s initial determination of loan portfolio 

performance constitute its final determination of loan portfolio 

performance. 

(2) The Secretary informs the institution of the final 

determination of loan portfolio performance for each of its GE 

programs by issuing the notice of determination described in 

§668.411(a). 

(3) After the Secretary provides the notice of 

determination to the institution, the Secretary may publish the 

final determination of loan portfolio performance for the GE 

program. 

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

An institution must ensure that any material that it submits to 

make any correction or challenge under this section is complete, 
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timely, accurate, and in a format acceptable to the Secretary as 

described in this subpart and consistent with any instructions 

provided to the institution with the notice of initial 

determination of loan portfolio performance. 
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§668.411 §668.409 Final determination and consequences of GE 

measures. 

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

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

program, the Secretary issues a notice of determination 

informing an institution of the following: 

(1) For the D/E rates-- 

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

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

(ii) The final determination by the Secretary of whether 

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

described in §668.403, and the consequences of that 

determination; 

(iii) Whether the program could become ineligible based on 

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

are calculated; 

(iv) Whether the institution is required to provide 

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

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

whether the institution must satisfy the requirements for 

borrower relief for students under paragraph (e); and 

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

final D/E rates for the next award year for which D/E rates are 
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calculated, instructions for appealing a final D/E rate, 

pursuant to §668.406. 

(2) For the pCDR-- 

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

§668.407 and §668.408; 

(ii) The final determination of the Secretary of whether 

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

§668.403, and the consequences of that determination; and 

(iii) Whether the institution is required to provide 

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

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

whether the institution must satisfy the requirements for 

borrower relief for students under paragraph (e). 

(3) For the loan portfolio performance-- 

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

determined under §§668.409 and 668.410; 

(ii) The final determination of the Secretary of whether 

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

§668.403, and the consequences of that determination; and 

(iii) Whether the institution is required to provide 

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

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

whether the institution must satisfy the requirements for 

borrower relief for students under paragraph (e). 
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(b) Effective date of Secretary’s final determination.

 The Secretary’s determination as to a GE measure is 

effective on the date that is specified in the notice of 

determination. The determination, including, as applicable, the 

determination with respect to an appeal under §668.406, 

constitutes the final decision of the Secretary with respect to 

that GE measure and the Secretary provides for no further appeal 

of that determination. 

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

Secretary notifies an institution that a GE program could become 

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

fiscal year for which the GE measures are calculated, the 

institution-- 

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

warning directly to each student enrolled in the program no 

later than 30 days after the date of the notice of 

determination. The warning must-- 

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

student grants or loans to pay for this program next year 

because recent graduates are not earning enough compared to 

how much they took out in student loans, or because the 

program fails other standards established by the U.S. 

Department of Education. The Department set these 

standards to help ensure that students are able to find 

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0"
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gainful employment and not burdened by debt they struggle 

to repay. Programs in violation of these standards risk 

losing access to federal funds” or any alternative warning 

language specified by the Secretary in a notice published 

in the Federal Register; 

(ii) Describe the options available to the student to 

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

institution, in the event that the program loses its eligibility 

for title IV, HEA program funds; and 

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

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

the institution; 

(B) Continue to provide instruction in the program to 

allow the student to complete the program; and 

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

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

(2) For each prospective student-- 

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

institution about the GE program and at the timebefore the 

student signs an enrollment agreement, completes registration,

or otherwise commitsmakes a financial commitment to enroll in 

the GE programinstitution, must provide a written warning 

directly to the student stating: “You may not be able to use 

federal student grants or loans to pay for this program next 
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year because recent graduates are not earning enough compared to 

how much they took out in student loans, or because the program 

fails other standards established by the U.S. Department of 

Education. The Department set these standards to help ensure 

that students are able to find gainful employment and not 

burdened by debt they struggle to repay. Programs in violation 

of these standards risk losing access to federal funds” or any 

alternative language specified by the Secretary in a notice 

published in the Federal Register; and 

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

program earlier than-- 

(A) Three business days after the warning was first 

provided to the prospective student; or 

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

first provided to the prospective student, three business days 

after the institution provides another warning as required by 

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

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

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

IV, HEA program funds to students enrolled in an ineligible 

program. 

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

to reestablish the eligibility of a program that it discontinued 

voluntarily and that has been determined to be a failing or zone 
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program that it voluntarily discontinued, reestablish the 

eligibility of an ineligible program, or establish the 

eligibility of a program that is substantially similar to the 

discontinued or ineligible program, until the end of the third 

award year following the award year the program was discontinued 

became ineligible.or fiscal year, as applicable, in which the 

Secretary notified the institution that the program was a 

failing or zone program or the award year or fiscal year, as 

applicable, in which the institution discontinued the program. 

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

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

institution that a GE program could become ineligible based on a 

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

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

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

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

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

funds enrolled in the program may not exceed the number of 

students receiving title IV, HEA program funds who were enrolled 

in the program during the previous 12 months. 

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

a failing or zone program that an institution voluntarily 

discontinues, remains ineligible until the institution 

reestablishes the eligibility of that program under §668.415413. 
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For this purpose, an institution voluntarily discontinues a 

failing or zone program on the date the institution provides 

written notice to the Secretary that it relinquishes the title 

IV, HEA program eligibility of that program. 

(ii) An institution that voluntarily discontinues a 

program before the Secretary determines the D/E rates and pCDR 

for the program may not apply under §668.413 to establish the 

eligibility of that program or a substantially similar program, 

until the Secretary issues final D/E rates and pCDR for that 

program. 

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

Secretary notifies an institution that a GE program could become 

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

fiscal year for which the GE measure is calculated, the 

Secretary requires the institution to provide for borrower 

relief for students currentlythose borrowers who are, or were,

enrolled in, and borrowing to attend, the program. at any time 

from when the notice is issued through the time that loss of 

eligibility may occur by--

(2) An institution provides for borrower relief under this 

paragraph by making available to the Department sufficient funds 

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

currently enrolled students if the program becomes ineligible, 

by-- 

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between paragraphs of the same style
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(i) Submitting a letter of credit (LOC) to the Department 

or modifying, to the extent required, an LOC previously 

submitted to the Department; in an amount as determined under 

paragraph (e)(3); 

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

with the Department as described in paragraph (e)(2) for an 

amount of funds as determined under paragraph (e)(3); or 

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

the obligation to provide borrower relief, in an amount as 

determined under paragraph (e)(3), is backed by the full faith 

and credit of the State. 

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

with the Secretary under which—--

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

Loantitle IV, HEA program funds that the institution would 

otherwise request under 34 CFR 668.162 for the purpose of 

providing borrower relief; 

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

considers sufficient to accumulate the borrower relief amount 

from those funding requests likely to be made up to the 

projected date when new draft GE measures are released;in an 

amount as determined under paragraph (e)(3); and 

(iii (ii) The institution agrees to disburse the full 

amount of Direct Loantitle IV HEA program funds awarded tothat 
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would otherwise be disbursed to or on behalf of students but to 

request Federal funds for that disbursementthose disbursements

in the amount of the disbursementdisbursements less the amount 

needed to accumulate the borrower relief.as determined under 

paragraph (e)(3). 

(4)3) (i) The excess portion amount of Federal GEborrower 

relief is-- 

(A) For a program loans for each currently enrolled student 

isfailing the amount needed to reduceD/E rates measure, the GE 

program’s amount by which the median loan debt for the program 

exceeds the amount that would have been necessary to pass the D/E 

rates measure multiplied by the number of students enrolled in the 

program in the previous year; and 

(B) For a program failing the pCDR measure, the dollar 

amount of loan payments that would have been necessary to pass 

the applicable GEpCDR measure. 

(5)ii) If borrower relief is required under two or 

moreboth GE measures, the amount required is the largestlarger

of the amounts determined under this paragraph (e)..

(6)4) The Secretary provides the institution the data used 

to calculate the borrower relief amount. 

(7)5) The institution may challenge the Secretary’s 

determination of the borrower relief amount by providing: 

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evidence satisfactory to the Secretary that the Secretary 

inaccurately calculated the borrower relief amount. 

(i) Evidence satisfactory(6) An institution must continue

to follow the Secretary that-- 

(A) The Secretary inaccurately calculated the borrower 

relief amount; or 

(B) The borrower relief amount should be reduced or 

eliminated because currently enrolled students are borrowing in 

smaller amounts than did the students included in the 

cohortrequirements of students on which the GE measure was 

based; and 

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

set-aside agreement to provide borrower relief in an amount 

equal to the institution’s proposed borrower relief 

amountparagraph (e)(1) pending the Secretary’s final 

determination of an institution’s challenge of the borrower 

relief amount under paragraphparagraphs (e)(85) and (e)(7). 

(8)7) The Secretary considers the information provided by 

the institution in any challenge under paragraph (e)(5) and 

issues a final determination to the institution of the borrower 

relief amount. The institution modifies any LOC provided, and 

the institution and the Department amend any set-aside agreement 

entered into, under paragraph (e)(7)(ii) to reflectBased on the 

Secretary’s final determination of the borrower relief amount., 
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as applicable, the institution modifies the LOC submitted under 

paragraph (e)(1) or the institution and the Department amend the 

set-aside agreement entered into under paragraph (e)(2).

(8) If the program becomes ineligible based on a final GE 

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

measure is calculated, the Secretary credits amounts recovered 

from institutional sources under paragraph (e)(1) to those 

students who are enrolled in the program on the date the notice 

is issued or on which loss of eligibility occurs in an amount 

for each student that is proportional to their accumulated debt 

for attendance in the program. 

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

ineligible inwhen final GE measures are calculated for the next

award or fiscal year, the Secretary releases the LOC for the 

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

agreement and provides the amount of funds that were set-aside 

to the institution, unless thean LOC or set-aside agreement is 

required, with or without modification, to provide for borrower 

relief under this paragraph arising from a GE measure in that 

next award or fiscal year.
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§668.412 (f) Loan reduction plan. (1) During the 

transition period provided in §668.404, beginning in any year in 

which the Secretary notifies an institution that a GE program 

could become ineligible based on a final GE measure for the next 

award or fiscal year for which the GE measure is calculated, 

instead of providing borrower relief to students under paragraph 

(e), an institution may choose to implement a loan reduction 

plan by-- 

(i) Offering to every student enrolled in the program at 

the time the Secretary notifies an institution that a GE program 

could become ineligible based on a final GE measure for the next 

award or fiscal year for which the GE measure is calculated, for 

that year and for each subsequent year up to the number of years 

equal to the length of the program, an institutional grant that 

replaces some or all of the amount each student borrows to 

reduce borrowing by an amount based on the borrower relief 

requirements in paragraph (e); and 

(ii) Offering to every student who enrolls in the program 

after the Secretary has notified an institution that a GE 

program could become ineligible based on a final GE measure for 

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

calculated, for that year and for each subsequent year until the 

program achieves a passing GE measure or, at maximum, up to the 
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number of years equal to the length of the program, an 

institutional grant that replace some or all of the amount each 

student borrows to reduce borrowing by an amount based on the 

borrower relief requirements in paragraph (e). 

(2) An institution may not coerce or require students to 

participate in the loan reduction plan. 

(3) An institution must notify the Secretary of its 

adoption of a loan reduction plan and describe how it will be 

implemented no later than 30 days after receiving a final 

determination under paragraph (a) that the institution must 

provide borrower relief. 

 (4) The Secretary may require additional information about 

the institution’s loan reduction plan, disapprove the plan, or 

require the institution to submit periodic reports on its 

implementation of the plan. 

 (5) For any award year during the transition period 

described in §668.404(g) in which the institution implements a 

loan reduction plan under this paragraph to the satisfaction of 

the Secretary, the Secretary waives the requirements in 

paragraphs (c), (d), and (e). However, the Secretary may 

reinstate any of these requirements if the Secretary at any time 

disapproves the plan or determines that the loan reduction plan 

is not satisfactorily implemented.
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§668.410 Reporting requirements for GE programs. 

(a) In accordance with procedures established by the 

Secretary, an institution must report-- 

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

award year-- 

(i) Information needed to identify the student and the 

institution the student attended; 

(ii) The name, CIP code, credential level, and length of 

the program; 

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

program; 

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

program whose students are required to complete an internship or 

residency, as described in §668.402; 

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

program; and

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

attendance status (i.e., enrolled, withdrawn, or completed) in 

the program during the award year; and

(vi) The student’s enrollment status (e.g., full-time, 

less than full-time) as of the first day of the student’s 

enrollment in the program; 

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

program during the award year-- 
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(i) The date the student completed or withdrew from the 

program; 

(ii) The total amount the student received in Federal 

Perkins Loan funds for attendance in the program; 

(iii) The total amount the student received from private 

education loans for attendance in the program; and that the 

institution is, or should reasonably be, aware of; 

(iiiiv) The total amount of institutional debt the student 

owes any party uponafter completing or withdrawing from the 

program; and 

(v) The tuition and fees charged to the student for the 

program; and 

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

the Federal Register, any other information the Secretary 

requires the institution to report. 

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

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

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

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

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

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

Secretary establishes a later date in a notice published in the 

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

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

section,), the institution must provide the Secretary with an 

explanation of why the missing information is not available. 
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§668.413411 Disclosure requirements for GE programs. 

(a) Disclosure template. An institution must use the 

disclosure template provided by the Secretary to disclose 

information about each of its GE programs to enrolled and 

prospective students. The Secretary identifies the information 

that must be included in the template in a notice published in 

the Federal Register. That information may include, but is not 

limited to: 

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

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

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

successor site. 

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

calculated by the Secretary under §668.414412. 

(3) The length of the program. 

(4) The total number of students enrolled in the program 

during the most recently completed award year. 

(5) As calculated by the Secretary under §668.414412, the 

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

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

(i) All students who attended the program. 

(ii) Students who completed the program. 

(iii) Students who withdrew from the program. 
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(6) The total cost of tuition and fees, and the total cost 

of books and supplies that a student would incur for completing 

the program within the length of the program. 

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

is required by its accrediting agency or State to calculate a 

placement rate. 

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

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

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

(i) Students who completed the program during the most 

recently completed award year. 

(ii) Students who withdrew from the program during the 

most recently completed award year. 

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

and (ii) of this section.).

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

groups of students: 

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

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

rates for the program under this subpart. 

(ii) Students who withdrew fromwere in withdrawn status at

the program duringend of the two-year period used by the 

Secretary to calculate the most recent D/E rates for the program 

under this subpart. 
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(iii) All of the students described in paragraph (a)(9)(i) 

and (ii) of this section.). 

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

Navigator Web site, or its successor site. 

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

which the program prepares the student as disclosed by the 

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

not completion of the program satisfies the educational 

prerequisites for professional licensure in the State or States 

in which the program is offeredin which the program is offered 

and in any other State included in the institution’s 

Metropolitan Statistical Area (MSA), as published by the U.S. 

Office of Management and Budget and available at 

www.census.gov/population/metro/ or its successor site. 

(12) If applicable, whether the program holds the 

programmatic accreditation necessary for an individual to obtain 

employment in the occupation for which the program prepares the 

student. 

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

procedures and timelines established by the Secretary, the 

institution must update at least annually the information 

contained in the disclosure template with the most recent data 

available for each of its GE programs. 
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(2) Within 30 days of receiving notice from the Secretary 

that the institution must provide student warnings for the 

program under §668.411409(c), the institution must update the 

disclosure template to include those warnings for both enrolled 

and prospective students. 

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

page containing general, academic, or admissions information 

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

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

disclosure template for that program. 

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

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

different lengths) may publish a separate disclosure template 

for each location or format if it would result in clearer 

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

publish separate disclosure templates for each location or 

format must ensure that each disclosure template clearly 

identifies the applicable location or format. 

(3) The(3) In addition to other actions the Secretary may 

take, the Secretary may require the institution to modify its 

Web page if the link for the disclosure template is not 

prominent, readily accessible, clear, conspicuous, and direct. 

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

that an institution makes available to prospective students that 
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identify a GE program by name or are otherwise promoting a 

specific GE program must include-- 

(i) The information on the disclosure template in a 

prominent manner; or 

(ii) Where space or airtime constraints would preclude a 

full disclosure of the required information, the Web address 

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

provided that, the institution identifies the URL or link as 

“Important Information about the educational debt, earnings, and 

graduation rates of students who attended this program.” 

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

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

advertising on radio, television, the Internet, and social 

media. 

(3) The institution must ensure that all promotional 

materials, including printed materials, about a GE program are 

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

a State agency, or broadcast. 

(e) Direct distribution to prospective students. 

(1) An institution must provide, as a separate document, a 

copy of the disclosure template to a prospective student, as 

defined by 34 CFR 668.41, at the time the student enrolls in a 

GE program. The. 
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(2) Before the student signs an enrollment agreement, 

completes registration, or makes a financial commitment to the 

institution, the institution must obtain written confirmation 

that the student received a copy of the disclosure template. 
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§668.414412 Calculating, issuing, and challenging completion, 

withdrawal, and repayment rates and median earnings. 

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

Secretary determines the completion rates, withdrawal rates, 

repayment rates, and median earnings an institution must 

disclose under §668.413411 for its GE programs, notifies the 

institution of that information, and provides the institution an 

opportunity to challenge the calculations. 

(b) Calculating completion, withdrawal, and repayment 

rates and median earnings. 

(1) Completion rate. The Secretary calculates the 

completion rate of a GE program as follows: 

(i) For students whose enrollment status is full-time on 

the first day of the student’s enrollment in the program: 

Number of students in the enrollment cohort who completed the 

program within 100% of the length of the program 

Number of students in the enrollment cohort 

and 

Number of students in the enrollment cohort who completed the 

program within 150% of the length of the program 

Number of students in the enrollment cohort 
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(ii) For students whose enrollment status is less than 

full-time on the first day of the student’s enrollment in the 

program: 

Number of students in the enrollment cohort who completed the 

program within 200% of the length of the program 

Number of students in the enrollment cohort 

and 

Number of students in the enrollment cohort who completed the 

program within 300% of the length of the program 

Number of students in the enrollment cohort 

The enrollment cohort is the number of students who began 

attending the program at any time during a particular award 

year. 

(2) Withdrawal rate. The Secretary calculates the 

withdrawal rate of a GE program as follows: 

Number of students in the enrollment cohort who withdrew from 

the program within the length of the program 

Number of students in the enrollment cohort 
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The enrollment cohort is the number of students who began 

attending the program at any time during a particular award 

year. 

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

award year, the Secretary calculates a loan repayment rate for 

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

GE program as follows: 

Number of borrowers paid in full plus number in active repayment 

Number of borrowers entering repayment 

(i) Number entering repayment. The total number of 

borrowers who entered repayment during the two-year period on 

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

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

entering repayment, the number who have fully repaid FFEL or 

Direct Loans received for attendance in the GE program. 

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

borrowers entering repayment, the number who, during the most 

recently completed award year made loan payments sufficient to 

reduce by at least one dollar the outstanding principal balance 

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

consolidation loans that include a FFEL or Direct Loan received 

for attendance in the GE program, by comparing the outstanding 
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principal balance at the beginning and end of the award year. 

The outstanding principal balance of a loan includes any unpaid 

accrued interest that has been capitalized. 

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

Direct Loan is not included in the numerator of the loan 

repayment rate formula in this paragraph. 

(v) Repayment rates for borrowers who completed or 

withdrew. The Secretary may modify the formula in this 

paragraph to calculate repayment rates for only those borrowers 

who completed the program or for only those borrowers who 

withdrew from the program. 

(vi) Exclusions. For the award year the Secretary 

calculates the loan repayment rate for a GE program, the 

Secretary excludes a borrower from the repayment rate 

calculation if the Secretary determines that-- 

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

military-related deferment status for at least 60 consecutive 

days during the most recently completed award year; 

(B) One or more of the borrower’s FFELtitle IV loans or 

Direct Loans are either under consideration by the Secretary, or 

have been approved, for a discharge on the basis of the 

borrower’s total and permanent disability, under 34 CFR 682.402 

and 685.212; 
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(C) The borrower was enrolled on at least a half-time 

basis for at least 60 consecutive days in an eligible 

institution during the most recently completed award year; or 

(D) The borrower died. 

(4) Median earnings. The Secretary calculates the median 

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

(b)(9). 

(5) Median earnings for students completing the GE 

program. The Secretary calculates the median earnings for the 

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

in accordance with §668.405. 

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

program. (i) The Secretary calculates the median earnings for 

the students who withdrew from the GE program during the twoyear period by-- 

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

the program but withdrew during the two-year period and 

providing it to the institution, as provided in paragraph 

(b)(6)(ii); 

(B) Allowing the institution to correct the information 

about the students on the list, as provided in paragraph 

(b)(6)(iii); 

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

students on the list, as provided in paragraph (b)(6)(iv); and 
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(D) Notifying the institution of the median annual 

earnings for the students on the list. 

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

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

(1) Identifying the students who were enrolled in the 

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

provided by the institution under §668.412410; and 

(2) Removing any student who is excluded under paragraph 

(b)(8). 

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

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

Secretary presumes that the list of students and the identity 

information for those students are correct unless the 

institution provides evidence to the contrary that is 

satisfactory to the Secretary, in a format and process 

determined by the Secretary. The institution bears the burden 

of proof that the list is incorrect. 

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

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

(1) Provide evidence showing that a student should be 

included on or removed from the list pursuant to paragraph 

(b)(8); or 
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(2) Correct or update a student’s identity information and 

the student’s program attendance information provided for a 

student on the list. 

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

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

identity or program information of those students. 

(D) The Secretary considers the evidence provided by the 

institution and either accepts the correction or notifies the 

institution of the reasons for not accepting the correction. If 

the Secretary accepts the correction, the Secretary uses the 

corrected information to create the final list. 

(iv) Obtaining earnings data. The Secretary submits the 

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

the Secretary-- 

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

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

individual form; and 

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

list that SSA could not match. 

(7) Median earnings for students who completed and 

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

median earnings for both the students who completed the GE 

program during the two-year period and students who withdrew 

from the GE program during the two-year period by---
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(A) Creating a list of both the students who completed the 

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

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

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

(B) Allowing the institution to correct the information 

about the students on the list, as provided in paragraph 

(b)(7)(iii); 

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

of the students on the list, as provided in paragraph 

(b)(7)(iv); and 

(D) Notifying the institution of the mean and median 

annual earnings for the students on the list. 

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

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

(1) Identifying the students who were enrolled in the 

program and completed or withdrew during the two-year period 

from the data provided by the institution under §668.412410; and 

(2) Removing any student who is excluded under paragraph 

(b)(8). 

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

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

Secretary presumes that the list of students and the identity 

information for those students are correct unless the 

institution provides evidence to the contrary that is 
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satisfactory to the Secretary. The institution bears the burden 

of proof that the list is incorrect. 

(B) No later than 3045 days after the date the Secretary 

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

(1) Provide evidence showing that a student should be 

included on or removed from the list pursuant to paragraph 

(b)(8); or 

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

the student’s program attendance information provided for a 

student on the list. 

(C) After the 3045-day period expires, the institution may 

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

identity or program information of those students. 

(D) The Secretary considers the evidence provided by the 

institution and either accepts the correction or notifies the 

institution of the reasons for not accepting the correction. If 

the Secretary accepts the correction, the Secretary uses the 

corrected information to create the final list. 

(iv) Obtaining earnings data. The Secretary submits the 

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

the Secretary-- 

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

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

not in individual form; and 
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(2) The number, but not the identities, of students on the 

list that SSA could not match. 

(8) Exclusions from median earnings calculations. The 

Secretary excludes a student from the calculation of the median 

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

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

IV loans were in a military-related deferment status for at 

least 60 consecutive days during the calendar year for which the 

Secretary obtains earnings information under this section; 

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

Loanstitle IV loans are under consideration by the Secretary, or 

have been approved, for a discharge on the basis of the 

student’s total and permanent disability, under 34 CFR 674.61, 

682.402 and 685.212; 

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

basis for at least 60 consecutive days in an eligible 

institution during the calendar year for which the Secretary 

obtains earnings information under this section; or

 (viv) The student died. 

(9) Median earnings not calculated. The Secretary does 

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

SSA does not provide the mean and median earnings for the 

program. 
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 (c) Notification to institution. The Secretary notifies 

the institution of the-- 

(1) Draft completion, withdrawal, and repayment rates 

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

information the Secretary used to calculate those rates. 

(2) Median earnings of the students who completed the 

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

students who withdrew from the program, as described in 

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

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

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

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

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

withdrawal, and repayment rates. 

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

institution of the draft completion, withdrawal, and repayment 

rates, the institution may challenge the accuracy of the 

information that the Secretary used to calculate the draft rates 

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

satisfactory to the Secretary demonstrating that the information 

was inaccurateincorrect. 

(ii) The Secretary considers any evidence provided by the 

institution challenging the accuracy of the information the 

Secretary used to calculate the rates and notifies the 
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institution whether the challenge is accepted or the reasons the 

challenge is not accepted. If the Secretary accepts the 

challenge, the Secretary uses the corrected data to calculate 

the rates. 

(iii) An institution may challenge the Secretary’s 

calculation of the completion, withdrawal, and repayment rates 

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

timely challenge the rates waives any objection to the rates as 

stated in the notice. 

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

challenges to the median earnings calculated under this section. 

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

withdrawal, and repayment rates. 

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

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

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

repayments rates constitute the final rates for that program. 

(ii) The Secretary informs the institution of the final 

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

programs by issuing a notice of determination. 

 (iii) After the Secretary provides the notice of 

determination, the Secretary may publish the final completion, 

withdrawal, and repayment rates. 
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(2) Median earnings. The median earnings of the GE 

program calculated by the Secretary under this section 

constitute the final median earnings for that program. After 

the Secretary provides the institution with the notice in 

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

final median earnings for the GE program. 

(f) Conditions for challenges. An institution must ensure 

that any material that it submits to make any corrections or 

challenge provided in this section is complete, timely, 

accurate, and in a format acceptable to the Secretary as 

described in this subpart and, with respect to challenges under 

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

instructions provided to the institution with the notice of its 

draft completion, withdrawal, and repayment rates. 
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§668.415413 Application requirement for new GE programs. 

(a) An institution must apply to the Secretary to 

establish the title IV eligibility of a new GE program if-- 

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

substantially similar to, a program that-- 

(i) Became ineligible under this subpart; or

(ii) Was a failing or zone program under this subpart that 

the institution voluntarily discontinued; or is 

(iii) Is replacing a currently failing or zone program; or 

(2) The institution does not currently offer an eligible 

program within the same CIP family; or 

(3(2) The institution currently has, or had within the 

previous three years, a failing program under its GE measures 

within the same CIP family. 

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

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

materially complete application to the Secretary in a format 

prescribed by the Secretary signedand certified as accurate by 

the institution’s most senior executive officer. The 

application must include the following information: 

(1) The CIP code, credential level, the number of clock or 

credit hours, and length of program of the program, and a 

description of how the institution determined the CIP code. 

Formatted: No underline
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(2) The primary occupations, by name and SOC code, that 

the institution represents the program will prepare students to 

enter. 

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

student would incur for completing the program. 

(4) The total cost of books and supplies that a student 

would incur for completing the program.

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

the program as a title IV eligible program. 

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

three years that the institution will offer the program. 

(6) The projected entry-level earnings of program 

completers asAs reported to the institution by likely employers. 

 (7) A narrative description of how the program was 

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

advisory committee, a government agency, businesses, or 

organizations that will likely employ completers of the program. 

individuals in the occupations for which the program prepares 

students, for students who complete the program, the projected 

average annual--

(8) (i) Entry-level earnings; and 

(ii) Earnings three years after entering the profession. 

(7) Letters of recommendation for the program from at 

least three businesses or organizations that are likely to 

Formatted: Indent: First line: 0.5"
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employ completers ofindividuals in the occupations for which the 

program prepares students signed by an executive officer of 

eachthe business or organization. Each letter must include a 

statement that, in the opinion of the employer, the program’s 

proposed curriculum would provide a student who completes the 

program with the skills, knowledge, and abilities needed for 

employment in those occupations. 

(98) Documentation that the program has been approved by 

the institution’s accrediting agency or is otherwise included in 

the institution’s accreditation by its accrediting agency, or 

comparable documentation if the institution is a public 

postsecondary vocational institution approved by a recognized 

State agency for the approval of public postsecondary vocational 

education in lieu of accreditation. 

(109) For each occupation that the program will prepare 

students to enter, whether the-- 

(i) The program meets applicable State requirements,any 

relevant specialized or programmatic accreditation requirements, 

and other requirements that completers. 

(ii) Completion of the program would have to satisfy to-- 

(i) MeetA) State licensure or certification requirements

or allow the student to sit for a State licensing exam, if any, 

in the State in which the program is offered; and in any other 
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State included in the institution’s MSA and in which the program 

is offered; and

(ii) Meet the(B) Any conditions or prerequisites for 

obtaining a certification required or preferred by employers in 

the State in which the program is offered; and

(iii) Otherwise obtain employment in theany other State 

included in which the program is offered. 

(11) IfMSA in which the program is intended to replace 

aoffered. 

(10) For any program that is currently offeredincludes 

experiential placement, such as externships or was offered 

within the previous three years, a description of the 

changesinternships, whether the institution made to improve the 

has arranged sufficient placements that meet the requirements, 

if any, of the program’s performance under the accreditation or 

licensure requirements or other employment requirements of this 

subpart. the State or States in which the program is offered and 

in any other State included in the MSA in which the program is 

offered.

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

(1) The institution provides all the information required 

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

the institution’s administration of or participation in the 

title IV, HEA programs; and

(3) The institution has complied with the reporting and 

disclosure requirements in §§668.412 and 668.413, 

respectivelythis subpart for all of its GE programs; and 

(4) The program meets all other title IV eligibility 

requirements. 

(d) The Secretary notifies the institution if its 

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

application is denied, the Secretary informs the institution of 

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

Secretary to reconsider that denial. 

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

program funds to students enrolled in a new GE program subject 

to this section on the date the Secretary approves the program 

under paragraph (d). 
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§668.416414 Certifications for GE programs. 

(a) Program participation agreement certification. An 

institution must provide in its Program Participation Agreement 

under 34 CFR 668.14 a certification that for each of its 

existing GE programs-–--

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

recognized accrediting agency, received programmatic 

accreditation if required,applicable or is otherwise included in 

the institution’s accreditation by its recognized accrediting 

agency, or comparable documentation, if the institution is a 

public postsecondary vocational institution, the program has 

been approved by a recognized State agency for the approval of 

public postsecondary vocational education in lieu of 

accreditation; and

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

the requirements generally needed to secure employment in the 

recognized occupation for which the program prepares students, 

including the ability to apply to take or to take any 

examination required to receive a local, State, or Federal 

license, or a nongovernmental certification, required as a 

precondition for employment, or to perform certain specialized 

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

which the educational program is offered, or to meet additional 
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conditions that the institution knows, or reasonably should 

know, must generally be met to secure employment in a recognized 

occupation for which the program prepares students. 

(2) Completion of the program would satisfy State 

licensure or certification requirements in the State or MSA in 

which the program is offered, or allow the student to sit for 

any State licensing exam in those areas, for the occupation for 

which the institution presents the program as preparing its 

students. 

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

2015, an institution must provide to the Department a 

certification signed by its most senior executive officer that 

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

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

unless that certification is already included in the Program 

Participation Agreement for the institution.).
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Conforming Changes to Existing Regulations 

(new language underlined) 

§600.2 Definitions. 

 The following definitions apply to terms in this part: 

* * * 

Recognized occupation: An occupation that is-- 

(a) Identified by a Standard Occupational Classification 

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

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

established by the Department of Labor and which are available 

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

(b) Determined by the Secretary in consultation with the 

Secretary of Labor to be a recognized occupation. 

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

* * * 

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

that seeks to establish the eligibility of an educational 

program must-- 

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

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

under 34 CFR 668.415413; and 
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(ii) For a direct assessment program under 34 CFR 668.10, 

a comprehensive transition and postsecondary program under 34 

CFR 668.232, or pursuant to a requirement regarding additional 

programs included in the institution’s Program Participation 

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

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

Secretary’s approval to establish the eligibility of any program 

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

section.).

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

program funds received by the institution for an educational 

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

on behalf of students who enrolled in that program if the 

institution-- 

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

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

section;); or 

(ii) Incorrectly determines that an educational program 

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

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

purposes. 

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

reestablishing, maintaining, or expanding program eligibility or 

institutional eligibility and certification. 

* * * 

(c) The application and certification requirements for programs 

that are required to prepare students for gainful employment in 

a recognized occupation are in 34 CFR §§668.415413 and 

668.416414. 

* * * 

§600.21 Updating application information.

(a) Reporting requirements. Except as provided in 

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

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

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

following: 

* * *

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

668, subpart Q, for which the institution-- 

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

668.411409; 

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

a normal vacation period or natural disaster; 

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

668.402, CIP code, or credential level. 

* * *

§ 685.206 Borrower responsibilities and defenses. 

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

borrower shall give the school the following information as part 

of the origination process for a Direct Subsidized, Direct 

Unsubsidized, or Direct PLUS Loan: 

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

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

(2) Information demonstrating that the borrower is eligible 

for the loan. 

(3) Information concerning the outstanding FFEL Program and 

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

borrower, of the student, including any Federal Consolidation 

Loan or Direct Consolidation Loan. 

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

Secretary information relevant to the student's eligibility to 

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

the student's enrollment status, financial assistance, and 

employment records). 

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

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

address; and 

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

change in address during enrollment. 

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

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

repayment any act or omission of the school attended by the 

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

school under applicable State law except as provided in 

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

but are not limited to, the following: 

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

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

Act. 

(iii) Salary offset proceedings for Federal employees under 

34 CFR part 31. 

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

3711(f). 

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

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

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

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

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

participate in a title IV, HEA program. 
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(3) If the borrower's defense against repayment is 

successful, the Secretary notifies the borrower that the 

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

the loan and associated costs and fees that the borrower would 

otherwise be obligated to pay. The Secretary affords the 

borrower such further relief as the Secretary determines is 

appropriate under the circumstances. Further relief may 

include, but is not limited to, the following: 

(i) Reimbursing the borrower for amounts paid toward the 

loan voluntarily or through enforced collection. 

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

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

Act. 

(iii) Updating reports to credit bureaus to which the 

Secretary previously made adverse credit reports with regard to 

the borrower's Direct Loan. 

(4) The Secretary may initiate an appropriate proceeding to 

require the school whose act or omission resulted in the 

borrower's successful defense against repayment of a Direct Loan 

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

defense applies. However, the Secretary does not initiate such 

a proceeding after the period for the retention of records 

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

notice of the claim during that period.

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