Committee Meetings - 02/15/22 1 

DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

INSTITUTIONAL AND PROGRAMMATIC

ELIGIBILITY COMMITTEE

SESSION 2, DAY 2, MORNING

February 15, 2022

On the 15th day of February 2022, the following 

meeting was held virtually, from 10:00 a.m. to 12:00 p.m., 

before Jamie Young, Shorthand Reporter in the state of 

New Jersey.
Committee Meetings - 02/15/22 2 

1 PROCEEDINGS

2 MS. JEFFRIES: Good morning, everyone, and welcome 

3 back to the negotiators as well as the public. We have a very 

4 full agenda again today. So where we left off yesterday, we 

5 will pick back up after we do our roll call and any 

6 housekeeping item. We will move right into wrapping up the 

7 administrative capabilities with Debbie and a quick 

8 temperature check and move into the gainful employment. So 

9 let's go ahead and take a roll call if everyone could turn on 

10 their cameras and I'm going to remind you as well as myself of 

11 our naming conventions. If you would, please make those 

12 adjustments. We will get started. Okay, so, if you just 

13 briefly, , acknowledge your presence however way you like 

14 we'll get started. For credit agencies, we have Jamie Studley 

15 as primary.

16 MS. STUDLEY: Good morning from beautiful Sebastopol, 

17 California.

18 MS. JEFFRIES: Good morning. And Dr. Laura Rasar 

19 King.

20 DR. KING: Good morning, everybody.

21 MS. JEFFRIES: Morning. For civil rights 

22 organizations and consumer advocacy organizations, we have 

23 Carolyn Fast.

24 MS. FAST: Morning.

25 MS. JEFFRIES: Good morning. And Jaylon Herbin.
Committee Meetings - 02/15/22 3 

1 MR. HERBIN: Morning.

2 MS. JEFFRIES: Morning. Financial aid administrators 

3 at postsecondary institutions, we have Samantha Veeder.

4 MS. VEEDER: Good morning, everyone.

5 MS. JEFFRIES: And David Peterson as the alternate.

6 MR. PETERSON: Good morning, everyone.

7 MS. JEFFRIES: Morning. Four-year public institutions 

8 of higher education, primary Marvin Smith.

9 MR. SMITH: Good morning.

10 MS. JEFFRIES: And alternate Deborah Stanley.

11 MS. STANLEY: Morning. 

12 MS. JEFFRIES: Good morning. Legal assistance 

13 organizations that represent students and/or borrowers, we 

14 have Johnson Tyler, primary. Okay, I'm not hearing from 

15 Johnson, we'll circle back. And Ms. Jessica Ranucci as 

16 alternate.

17 MS. RANUCCI: Good morning.

18 MS. JEFFRIES: Good morning. Minority serving 

19 institutions primary, we have Dr. Beverly Hogan. Beverly, 

20 you're on mute.

21 DR. HOGAN: I'm sorry. Good morning, everyone.

22 MS. JEFFRIES: Good morning. And Ms. Ashley Schofield 

23 as alternate.
Committee Meetings - 02/15/22 4 

1 MS. SCHOFIELD: Good morning, everyone.

2 MS. JEFFRIES: Good morning. For civil rights 

3 organizations, we have Ms. Amanda Martinez.

4 MS. AMANDA MARTINEZ: Present, good morning.

5 MS. JEFFRIES: Good morning. Private nonprofit 

6 institutions of higher education, Ms. Kelli Perry as primary. 

7 And not hearing from Kelli. And Mr. Emmanual Guillory as 

8 alternate and I believe Emmanual, you're going to be sitting 

9 in this morning, correct?

10 MR. GUILLORY: That's right.

11 MS. JEFFRIES: Okay.

12 MR. GUILLORY: Good morning.

13 MS. JEFFRIES: Good morning. Proprietary institutions 

14 of higher education, we have Mr. Bradley Adams.

15 MR. ADAMS: Morning.

16 MS. JEFFRIES: Morning and Mr. Michael Lanouette.

17 DR. LANOUETTE: Good morning.

18 MS. JEFFRIES: Good morning. State attorneys general 

19 primary, Adam Welle.

20 MR. WELLE: Here, good morning.

21 MS. JEFFRIES: Good morning, Adam. And Ms. Yael 

22 Shavit.
Committee Meetings - 02/15/22 5 

1 MS. SHAVIT: Morning.

2 MS. JEFFRIES: Morning. State higher education 

3 executive officers state authorizing agencies and/or state 

4 regulators of institutions of higher education and/or loan 

5 servicers primary is Ms. Debbie Cochrane.

6 MS. COCHRANE: Good morning.

7 MS. JEFFRIES: Good morning. And alternate is Mr. 

8 David Socolow.

9 MR. SOCOLOW: Good morning.

10 MS. JEFFRIES: Morning. Student and student loan 

11 borrowers, we have Mr. Ernest Ezeugo.

12 MR. EZEUGO: Morning, everyone.

13 MS. JEFFRIES: And alternate Mr. Carney King.

14 MR. KING: Good morning.

15 MS. JEFFRIES: Morning. Two-year public institutions 

16 of higher education, we have Dr. Anne Kress.

17 DR. KRESS: Good morning.

18 MS. JEFFRIES: Morning. And Mr. William Durden as 

19 alternate.

20 MR. DURDEN: Good morning.

21 MS. JEFFRIES: Good morning. U.S. military service 

22 members, veterans or groups representing them, primary is Mr. 

23 Travis Horr, who I don't believe is with us today. So, Mr. 
Committee Meetings - 02/15/22 6 

1 Barmak Nassirian is the alternate will be sitting in in his 

2 place.

3 MR. NASSIRIAN: Good morning.

4 MS. JEFFRIES: Good morning. And then for the 

5 Department, of course, we have Mr. Gregory Martin.

6 MR. MARTIN: Good morning.

7 MS. JEFFRIES: Good morning. The general counsel 

8 sitting in today will be Mr. Steve Finley.

9 MR. FINLEY: Hi, good morning.

10 MS. JEFFRIES: Good morning. And our two advisors for 

11 compliance auditor with experience auditing institutions that 

12 participate in Title IV HEA programs, Mr. David McClintock.

13 MR. MCCLINTOCK: Good to see everyone again.

14 MS. JEFFRIES: And the other alternate is labor 

15 economists or an individual with experience in public 

16 research, accountability and/or analysis of higher education 

17 data, Dr. Adam Looney. Dr. Looney, are you with us? Well, he 

18 will be coming in later for gainful employment as he will be, 

19 he does have a presentation for the committee today. Denise, 

20 you have your hand up.

21 MS. MORELLI: I just wanted to let you know that I'm

22 going to finish our administrative capability for the general 

23 counsel's office and then Mr. Finley will step in for gainful 

24 employment.
Committee Meetings - 02/15/22 7 

1 MS. JEFFRIES: Okay, perfect. Thank you for that. Did 

2 I miss anyone?

3 MR. TYLER: Hi, I showed up late, sorry, I'm here 

4 now.

5 MS. JEFFRIES: Oh, there you are, Johnson. Alright, 

6 great. Thanks. Welcome. I'm still not seeing Kevin, so I'm 

7 going to move into today's planned agenda. We'd like to take 

8 just a brief period of time to wrap up the administrative 

9 capabilities, and then we will move directly into gainful 

10 employment. The plan for gainful employment is that Greg will 

11 do a brief overview of that document. We will be asking that 

12 you hold off questions and comments while he does that. And 

13 from there, Dr. Looney will be doing his presentation and then 

14 there will be two Department staff members as protocol permits 

15 that will provide some additional information for the 

16 committee on gainful employment. At that point, then Greg will 

17 then pick up and start walking the committee through the 

18 entire document, and our discussion will ensue while he does 

19 that. Okay? Barmak.

20 MR. NASSIRIAN: Yes. Very briefly, I will be able to 

21 save time tomorrow on financial responsibility, I will be 

22 putting in chat a memo on the question of statutory authority 

23 for two of the provisions that the Department has in its 

24 current regulations and its proposed regulations. I just 

25 wanted to submit that for the record, today, so the Department 

26 and the negotiators have a chance to look it over for 

27 tomorrow. Thank you.
Committee Meetings - 02/15/22 8 

1 MS. JEFFRIES: And I'd like to offer as well Barmak, 

2 if you want to send that to me, I'd be happy to send it out to 

3 all the negotiators and the Department as well, so they have a 

4 physical copy for themselves. If that would be helpful?

5 MR. NASSIRIAN: Yes, ma'am.

6 MS. JEFFRIES: Alright. So with that, let's go ahead. 

7 Debbie Cochrane, you had your hand up as we concluded 

8 yesterday and had to move on to public comment. Would you like 

9 to comment on the administrative capabilities?

10 MS. COCHRANE: Sure, thank you so much, I put it very 

11 briefly on a chat yesterday, but really the question is around 

12 the issue of legitimate high schools that may have closed, 

13 whether they are charter schools or religious schools, 

14 basically any high school that is no longer open for 

15 documentation to be obtained and that is not regulated or 

16 overseen by a state agency. I'm not sure how an institution 

17 would document the validity of their transcript, so I'm not 

18 sure if there's another path that's needed here or what the 

19 Department was thinking about those institutions and those 

20 high schools.

21 MS. JEFFRIES: Okay. Did you put that back in the 

22 chat today to Debbie?

23 MS. COCHRANE: It was just at the end of the day 

24 yesterday.

25 MS. JEFFRIES: Okay, alright. And so it looks like 

26 the Department doesn't have an immediate response to that. So 

27 if it's okay, they'll continue to look into that and get back 
Committee Meetings - 02/15/22 9 

1 with you. Is that okay with you? Okay, great. Alright. So I'm 

2 seeing Brad and Barmak and then hopefully we'll be able to 

3 take the temperature checks. Brad?

4 MR. ADAMS: Yes. I had also asked a question in the 

5 chat as we kind of ran out of time yesterday on just what the 

6 definition of a business relationship is and whether or not 

7 that would include a financial relationship. If the Department 

8 could just help us out there on the very end there, 4A, that 

9 would be great.

10 MR. MARTIN: I can respond to that. And I'll address 

11 the previous question to some extent. I mean, I do want to say 

12 that we do understand the difficulty for some students to 

13 obtain a copy of a high school diploma or a transcript. In 

14 some cases, you have students who are nontraditional students, 

15 and it may have been years since they went to high school, and 

16 it may have been in a completely different part of the 

17 country. The school may have closed. There are difficulties 

18 associated with that. And again, we are not requiring that 

19 high school diplomas be collected for all students. In the 

20 case where, it's necessary, where there is a reason to believe 

21 that it's not valid once a school or the Department has reason 

22 to believe that somebody does not have a valid high school 

23 diploma that does need to be resolved. We've tried to give a 

24 number of ways here that could be accomplished. And our goals 

25 here are to give us tools we need to address areas where we 

26 see significant abuse. So I just want to point that out. But 

27 we will, it's a good comment. We will take it back. We 

28 definitely understand that there are situations where students 

29 have legitimate difficulty obtaining the credential or 
Committee Meetings - 02/15/22 10

1 documentation, some documentation that they have it even where 

2 they did obtain that. So we'll we'll definitely take that back 

3 and see what we can do there. With respect to Brad's comments 

4 about the business relationship, I don't, we, a business 

5 relationship would certainly suggest that there's money, but 

6 it may not be, but I think it could also be, you know, and I 

7 can ask Denise to step in here as well, it could also be a 

8 quid pro quo type thing where we're talking about 

9 relationships where the institution has some type of a 

10 business relationship with a provider of high school diplomas, 

11 and through that, students are funneled from that high school 

12 entity, which is not providing a legitimate high school 

13 education to the to the postsecondary entity. So regardless of 

14 what that business relationship is, I think even if it might 

15 involve money, again, it might just involve a mutually 

16 beneficial situation where the school encourages the 

17 postsecondary school to go to this provider of high school 

18 diplomas and then that entity benefits from that in that those 

19 students are funneled back from that school to the 

20 postsecondary institutions. So however, that relationship 

21 exists, it would fall under this regulation.

22 MS. JEFFRIES: Thank you, Greg. Barmak.

23 MR. NASSIRIAN: Apropos Debbie's point, I would 

24 encourage the Department to leave a little bit of room for 

25 extraordinary circumstances, we run into all kinds of 

26 situations where there are refugees who have fled their home 

27 country, don't have any records of anything. So it's important 

28 to be reasonable if there is a suspicion, as I suggested 

29 yesterday, that you need to kind of bifurcate, in my opinion, 
Committee Meetings - 02/15/22 11

1 the regulations to address potential fraud by the student 

2 versus potential fraud by the entity that purports to be a 

3 high school to separate things. And they have different 

4 solutions. And at the same time, you need some flexibility for 

5 extraordinary cases.

6 MR. MARTIN: Thanks, Barmak. We'll take that back.

7 MS. JEFFRIES: Thanks. Alright, I see Emmanual’s hand 

8 and then we can move to the temperature checks. So Emmanual.

9 MR. GUILLORY: It was a question that I had yesterday 

10 in the chat, but is regarding a high school diploma validity, 

11 to determine whether or not it's valid. And I was wondering 

12 whose responsibility is that? Is that the Department's 

13 responsibility to determine if it's valid, the institution's 

14 responsibility or the student's responsibility? And the reason 

15 why I ask is because the way that it reads is that it's the 

16 institution's responsibility because it's administrative 

17 capability. And this is something that we had brought up last 

18 session of the additional burden that it is to then determine 

19 whether or not the high school diploma is valid and all these 

20 different things to determine that. But I just wanted to be 

21 clear as to whose responsibility it is.

22 MR. MARTIN: Yeah, that's a good question. But you're 

23 correct. It is the institution's responsibility to determine 

24 the validity of the high school diploma. If there's reason to 

25 believe that there's a problem with it, then that is something 

26 which needs to be resolved and is the institution that 

27 determines whether the student is eligible and then pays based 

28 on the student being eligible. So it is the responsibility of 
Committee Meetings - 02/15/22 12

1 the institution to make this determination. The student might 

2 certainly be involved in having to take measures to obtain the 

3 documentation, but ultimately looking at it and determining 

4 whether or not the student is eligible always rests with the 

5 institution. And so that would be the same here. But I would 

6 point out again that, I think that this is a requirement for 

7 every institution to obtain diplomas in every instance, some 

8 schools do that. And if the school's policy were that they do 

9 collect high school diplomas or transcripts for every student 

10 whom they admit then it would be incumbent upon the 

11 institution if they saw any problems or had any reason to 

12 believe that any of those were a problem to follow up on that. 

13 So I don't think this is overly burdensome in that we're 

14 talking about instances where there is a procedure, there is a 

15 problem and we're resolving for that problem. So yes, there is 

16 a burden that the school has to look into that, but it's 

17 always been a school's responsibility to determine if a 

18 student is eligible.

19 MS. JEFFRIES: Okay. Thank you, everyone for that. So 

20 seeing no additional hands. Greg, are we prepared to move to 

21 temperature check on I believe it was, 668.157, right? No, I'm 

22 sorry. I'm sorry, I had the wrong paper. I apologize everyone. 

23 Okay, alright. So if we could see a show of hands or thumbs, 

24 I'm sorry on that. On the administrative capabilities, on V 

25 correct?

26 MR. MARTIN: V.

27 MS. JEFFRIES: Yep. Okay. Alright, let's see. 

28 Alright, I'm not seeing any thumbs down.
Committee Meetings - 02/15/22 13

1 MR. MARTIN: Thanks everybody for the discussion, 

2 very good.

3 MS. JEFFRIES: Okay. So with that, let's move on to 

4 gainful employment and get started on that. Greg, if you would 

5 go ahead and oh, let me just give you a quick reminder in the 

6 chat, we have been asked by the Department to put in, Brady, I 

7 think it kind of got lost in there.

8 MR. ROBERTS: I just reposted the question, you 

9 should be able to see it.

10 MS. JEFFRIES: Okay. There are three questions that 

11 the Department asked us to put in the chat. As a reminder, as 

12 you move through the rest of this week and in between sessions 

13 on the information that they are seeking they asked for 

14 yesterday. So it's just there is a helpful reminder for you to 

15 provide that feedback to them. It would be greatly 

16 appreciated. Okay? So from there, Greg, do you want to give us 

17 a brief overview of gainful employment?

18 MR. MARTIN: Sure, we could start with gainful 

19 employment. It's always daunting when you hear the word 

20 gainful employment. We have to get into this and say, I do 

21 want to say it's a lot, you know, we're talking about a whole 

22 subpart here. I want to try to get through this today and 

23 balance the need to move through the paper, without, and also 

24 the need for allowing everybody to make whatever comments they 

25 want to about the documents. So I'm going to try to balance 

26 that and it may be a little difficult. But you know, if again, 

27 I'm not trying to cut anybody off or preclude any 

28 conversation. It's not my intention in any way, and if anybody 
Committee Meetings - 02/15/22 14

1 feels they need to say something or stop and make a point, 

2 please let me know. During this, though, I was going to do a 

3 brief overview and introduce the topic again. So issue paper 

4 3, gainful employment, as you are aware, we introduced this in 

5 the last session in session 1, but we did not at that time 

6 have any amendatory text to give you. If you look at the 

7 overview, I'm not going to go through that again because the 

8 summary of issues, rather because we did that before and I 

9 don't want to be redundant in doing that. But just in the area 

10 where it says proposal, I do want to go through a couple of 

11 these things just to sort of get us back on track as to what 

12 the Department is proposing to do here generally. So we are 

13 going to establish a framework again for whether a program 

14 prepares students for gainful employment in a recognized 

15 occupation. As we go through this, and you see and we walk 

16 through the text and hopefully all of you have looked through 

17 that. Those of you who are familiar with the 14 rule 2014 rule 

18 will certainly recognize a lot of this. That basic framework 

19 is retained for these rules with some notable exceptions. And 

20 we'll talk about that as we go through. We bring your 

21 attention here to what we want to do, to clarity as to the 

22 scope and purpose which govern the determination of whether a 

23 gainful employment program is eligible for Title IV HEA funds, 

24 as well as outline the reporting requirements for 

25 institutions. Some terminology. Includes the annual and 

26 discretionary earnings rate, which make up the debt earnings 

27 to D/E the definition of a GE program and the program's 

28 classification of instructional program CIP code. So those 

29 terms will be used. And credential level, and small program 

30 rates to assess the rates for all programs within the 
Committee Meetings - 02/15/22 15

1 credential level that are otherwise too small to produce D/E 

2 rates. That is something new for that we're bringing in here 

3 that was not found in the 14 rules. And let's look down to 

4 three, the framework for assessing gainful employment 

5 programs. As with the 2014 rule, the Department will calculate 

6 discretionary and annual debt to earnings rate. So as I said, 

7 those of you who were familiar with the 14 rule will notice 

8 that has been retained. Institutions with discretionary rate 

9 D/E rate of 20 percent or an annual D/E rate of 8 percent or 

10 less, will be considered passing under the metric, as it was 

11 in 2014. A program that fails at the D/E rates in any two of 

12 three consecutive years becomes ineligible for Title IV HEA 

13 funds. We can look at the process for calculating their rates. 

14 The rates will be calculated on annual loan payment amounts 

15 that will be amortized over 10-, 15- and 20-year periods, 

16 depending on the credential level. We'll look at that as we 

17 get into the rate itself, on behalf of the graduates of the 

18 program and using interest rates that are based on an average 

19 of rates for three or six years prior undergraduate or 

20 graduate unsubsidized loans. The Secretary also obtains 

21 aggregate, median earnings for each program from another 

22 federal agency. The Secretary will calculate a small program 

23 rate based on all of the small programs in a given credential 

24 level. Looking at procedures for issuing the rates. The rates 

25 will be calculated based on administrative data, which 

26 institutions will have an opportunity to update prior to 

27 calculation of the rates. This is a little bit different than 

28 what we had before with the complete lists. It's a little bit 

29 of a modification when we look at that part of the regulation. 

30 As previously noted, earnings will be obtained from another 
Committee Meetings - 02/15/22 16

1 federal agency and the Department will calculate the rates 

2 after removing from that calculation the number of students 

3 who are not matched in the earnings calculation. Under the 

4 process for determining D/E rates, the Secretary will notify 

5 institutions of the D/E rates for each program and for their 

6 small programs. For GE programs with D/E rates, the Department 

7 will also notify the institution whether the program is 

8 passing, failing or ineligible. And consequences for the D/E 

9 rates, for programs that fail the D/E rates, institutions will 

10 be required to provide a warning to current and prospective 

11 students. The warnings will be hosted by a website maintained 

12 by the Secretary, so this is another change over the 2014 

13 rules, with the Secretary maintaining the site on which those 

14 warnings will be posted. Institutions will be required to 

15 share information to access that site, along with a warning. 

16 The Department will require students seeking to enroll in a 

17 failing program to provide attestation through their website 

18 that they have seen the warning. For ineligible programs, the 

19 institution is prohibited from disbursing Title IV HEA funds 

20 to students at the institution and cannot establish that 

21 program again for at least three years. We are establishing 

22 reporting requirements as well. Some additional information 

23 will need to be reported to the Department to ensure D/E rates 

24 can be calculated for each GE program and this will include 

25 student level information on the program, attendance and 

26 withdraw completion dates, private institutional loan debt, 

27 tuition, fees, books, supplies, and other equipment 

28 allowances. We are also and I want to point out that you will 

29 see as we go through this, that it is our intention to where 

30 possible, do our calculations administratively based on what 
Committee Meetings - 02/15/22 17

1 institutions are already providing via the systems that 

2 participate for, such as GE, I'm sorry, such as NSLDS and COD. 

3 So, we're also going to specify, and this is new, under number 

4 9 here, specify supplementary performance measures. So we are 

5 proposing to include certain data elements in consideration of 

6 an institution's application to participate in the federal 

7 programs prior to issuing a new PPA to an institution, we will 

8 assess and may take into consideration the withdrawal rates of 

9 the institution, the GE D/E rates and small program rates, if 

10 applicable, instructional expenditures of the institution and 

11 accreditor or state related job placement. If any of that 

12 information is available. And we are also going to outline key 

13 certification requirements for the GE programs. The proposed 

14 regulations include a timeline for institutions to certify 

15 that GE programs meet other requirements, such as complying 

16 with the timelines for reestablishing eligibility and being 

17 accredited or included in the scope of the institution's 

18 accreditation. So that's just a brief overview of what we're 

19 going to do if you look at the regulation itself. I'll just 

20 draw your attention to a couple of things here. You can see 

21 that we have made some changes in 600.10. We will be looking 

22 at updating application information in 600.21. We then would 

23 move into the program definitions under subpart Q. So the 

24 majority of what we'll be doing is looking at subpart Q. As I 

25 said before, you'll notice, a lot of this comes in the 14 

26 rules. And finally, we'll be looking at disclosures under 

27 668.43. So I'm going to leave it at that for now and turn it 

28 back over to Cynthia. And then when our presentations are 

29 concluded, we will walk through the document. Thank you. 

30 Cynthia.
Committee Meetings - 02/15/22 18

1 MS. JEFFRIES: Okay, thank you, Greg, for that. So 

2 Dr. Adam Looney has joined us, so he will be doing his 

3 presentation. But before we get to that, I want to note that 

4 David Peterson is in at the table for gainful employment on 

5 behalf of financial aid administration constituency instead of 

6 Samantha Veeder and my colleague Kevin Wagner has been able to 

7 rejoin the meeting, who was slated to facilitate this morning, 

8 so I'll be turning it back over to him. Kevin?

9 MR. WAGNER: Sorry about that. Glad to be joining you 

10 all, and we're going to be joined by Dr. Adam Looney, who's an 

11 adviser. And he's going to give a presentation on gainful 

12 employment.

13 DR. LOONEY: Okay. Can I share my screen?

14 MR. WAGNER: Sure.

15 DR. LOONEY: Okay, can you see that? Or what are we 

16 looking at?

17 MR. ROBERTS: Yeah, it looks like an opening slide 

18 for a PowerPoint presentation,

19 MS. JEFFRIES: We can see that, yep, you're good. 

20 David Peterson's webcam broke yesterday, so although you may 

21 not be able to see him on your screen as a video participant, 

22 he is there. Okay? Go ahead, Dr. Looney.

23 DR. LOONEY: Okay, thank you. I just wanted to 

24 respond to some of the questions that came up in our last 

25 session a month ago and just to provide an overview of this in 

26 part to spur some questions from the participants and see if 
Committee Meetings - 02/15/22 19

1 there is an opportunity for me to be helpful here. I wanted to 

2 do a couple of things. One was just to provide a summary of 

3 why accountability rules exist and what the evidence is about 

4 their efficacy, and to review some of them. Second, to review 

5 some of the mechanics of the 2014 rule and potential 

6 modifications to it. And then just to provide an overview of 

7 what programs have been affected. So you can see the second 

8 slide, right? Okay, I want to make sure I'm flipping through 

9 them properly. So in brief, five points about these programs. 

10 One is that there's a lot of evidence that postsecondary 

11 education can be in a ladder of economic opportunity and boost 

12 student earnings. Individuals with college degrees earn 

13 significantly more over the course of their careers. They are 

14 vastly more likely to move up into the middle class. And the 

15 educational workhorses that are responsible for this 

16 opportunity are often mid-tier, nonselective, mostly public 

17 institutions, not elite or selective schools. Likewise, there 

18 are many career oriented programs that offer degrees and 

19 certificates that boost their student's job prospects. And 

20 this is where federal aid is particularly important in 

21 providing access to those institutions. At the same time, 

22 despite that opportunity, there are large numbers of students 

23 that invest time and money in occupational programs that 

24 result in low earnings and/or loans they can't repay, leaving 

25 them worse off than they were prior to enrollment. The weight 

26 of those failures falls most heavily on the most disadvantaged 

27 students. Just for example, Pell Grant recipients represent 

28 about 90 percent of all students who default on an 

29 undergraduate loan. And the evidence shows that poor student 

30 outcomes are primarily caused by low quality institutions and 
Committee Meetings - 02/15/22 20

1 programs, clearly disadvantaged students are concentrated in 

2 programs with poor outcomes. But the research is clear about 

3 the direction of causality. The problem is the programs, 

4 schools, not the students at any given college. For example, 

5 students from low and high quality, low- and high-income 

6 families have very similar earnings and repayment outcomes, 

7 even at nonselective institutions. Looking over the history of 

8 the student loan program, default rates have surged and 

9 declined many times, and that's not because the students in 

10 these programs have changed. It's because the programs that 

11 are eligible to participate in Title IV programs have changed 

12 over time across a range of outcomes like default rates, loan 

13 repayment rates, post college earnings, callback rates of job 

14 applicants. The outcomes of students largely reflect the 

15 characteristics of schools and not only the backgrounds of the 

16 students. And that's why accountability policies are effective 

17 in improving student outcomes. After a crisis, for example, in 

18 the student loan market in the 1980s, rigorous institutional 

19 accountability measures implemented at that time drove default 

20 rates down to single digits. And likewise, much of the 

21 increase in default rates and falling repayment rates since 

22 2000 was caused by the unwinding of those accountability 

23 rules, like changes in the 90/10 rule, the erosion of cohort 

24 default rate rules, elimination of student learning rules as 

25 well as expansion of lending limits, particularly to graduate 

26 borrowers. And so, you know, just related to that, in the 

27 1990s, these accountability rules closed more than 1200 

28 institutions. But it's not that the students lost access to 

29 educational opportunities. Instead, the evidence is that they 

30 went to better schools and had better outcomes. And so the 
Committee Meetings - 02/15/22 21

1 kind of broad consensus of the literature that has been 

2 examining the role of accountability in postsecondary 

3 education is that stronger accountability systems would have 

4 benefits in terms of improving student outcomes, reducing the 

5 costs of these programs to taxpayers. So that's the preview I 

6 have for each of these bullet points at the bottom of the 

7 presentation, which I assume will be shared at some point. I 

8 have references to academic research on these topics that you 

9 can peruse for further reading. But that gets me to the 2014 

10 rule, and this graph is an attempt to demonstrate the how the 

11 rule worked. So as I just mentioned, there were two rules at a 

12 time, there was a rather, the rule is based on a debt service 

13 to earnings measure. Debt service was determined by the amount 

14 of debt at repayment, the interest rate and then an 

15 amortization schedule that depended on the credential level 

16 that was being attained. So if it was a sub-BA credential 

17 payments or the loan payments were amortized over a 10-year 

18 period, if it was a BA, they were amortized over a 15 year 

19 period. If there was a beyond a BA, master's, doctoral or 

20 professional program, it was amortized over 20 years. That 

21 debt service was compared to two measures of earnings and 

22 annual earnings threshold an annual earnings amount, which was 

23 just the greater of the mean or median earnings of completers 

24 in the program and a discretionary earnings test, which was 

25 the earning amount that exceeded 150 percent of the poverty 

26 line. And so I have illustrated those two rules on this graph. 

27 For a program to pass, it had to pass either of those tests. 

28 So for example, the black line in the chart shows this debt to 

29 annual earnings threshold. So programs whose debt to earnings 

30 were below the threshold in green would pass. Likewise, the 
Committee Meetings - 02/15/22 22

1 blue line is the debt to discretionary income threshold. And 

2 so programs that had a debt-to-income level that was below 

3 that blue line passed. I have drawn this so that they indicate 

4 the 8 percent annual threshold and the 20 percent 

5 discretionary threshold. And so if you were on the other side 

6 of either of both of those lines, then those programs were 

7 failing. One other thing to say is I have represented here the 

8 levels of debt that correspond to failure for a sub-BA program 

9 for a program that was a BA program, the debt amounts would be 

10 about 40 percent larger before you failed and for a for a 

11 master's or a doctoral program. The levels of debt, I think, 

12 are about 80 percent, 70 or 80 percent higher. In other words, 

13 the longer amortization schedule allows programs to pass at 

14 much higher levels of debt, in debt to earnings ratios. At 

15 that time, there was a lot of elements that were debated about 

16 that, and I would just mention them here. Perhaps the most 

17 important admission of the 2014 rule and of debt to earnings 

18 rules more generally is that there were large numbers of 

19 programs that could pass even with very poor economic 

20 outcomes, provided that the median program computer did not 

21 have debt. And so, for example, that could mean that if 51 

22 percent of students did not borrow, then the program would 

23 automatically pass. That might leave other students who had 

24 attended the program with large levels of debt that were 

25 unmanageable to them. Likewise, it also meant that students 

26 and taxpayers could invest large amounts of time and money 

27 into a program that was intended to improve their economic 

28 outcomes and yet not achieve that outcome because the outcome 

29 is very poor. So, for example, if programs were financed by GI 

30 Bill benefits, Pell Grants, Cal Grants, state investments or 
Committee Meetings - 02/15/22 23

1 paid out of pocket, then those programs could still pass. Even 

2 though the outcomes of the students were quite bad. I think 

3 Ernest asked about completers versus non-completers, the 2014 

4 rule is based on completers. At the program level, my sense is 

5 that there is just about no information about the non6 completion at the program level, nor about the characteristics 

7 of individuals who complete or not complete at the program 

8 level. There is more information at the institutional level. 

9 I'm just going to mention that in passing because I don't have 

10 a lot more to say other than obviously non completion is a is 

11 a significant problem at a lot of institutions and leads to a 

12 lot of poor outcomes for students and student loan borrowers 

13 in particular. But as designed, that rule only focuses on 

14 completers. During the 2014 rulemaking, there were lots of 

15 questions about the role of underreported income. And so in 

16 the references at the bottom of this presentation, I have 

17 included a paper that has tried to analyze this question. It's 

18 been a question that researchers have subsequently tried to 

19 answer. The conclusion of that paper was that the magnitude of 

20 underreported income is relatively small and has little role 

21 in the success or failure of programs like cosmetology under 

22 2014 rule. On a related note, I'll just mention certain 

23 programs that were more likely to fail the 2014 rule programs 

24 that primarily exist to fulfill state occupational licensing 

25 rules like cosmetology, barbering, massage therapy esthetics. 

26 The programs are costly. The earnings of graduates are very 

27 low. And I think the consensus of the economics literature is 

28 that those programs aren't intended to educate students so 

29 much as they are to impose barriers to employment in those 

30 fields to protect incumbents. And so this is an area where 
Committee Meetings - 02/15/22 24

1 I'll just mention that the Department or the educational 

2 system is thrust in the middle of the state policy making 

3 process. Another thing that came up last time, and I have 

4 included a couple of papers to that effect to analyze that the 

5 role of occupational licensing and debt in the reference 

6 section. The last thing to say is the three-year reporting 

7 timeframe that seems to be a robust timeframe to measure 

8 outcomes. And I've had some, reference to that. Finally, I 

9 think we talked last time, and I think people have proposed 

10 augmenting the 2014 rule within an earnings threshold. So just 

11 as an illustration, you can imagine drawing a vertical line 

12 like this black dashed line at some level of program earnings 

13 and then saying if the typical earnings of graduates of the 

14 program are below that threshold, then the program would fail 

15 the rule. The main consequence is that programs with very low 

16 levels of debt, but very low levels of earnings would fail to 

17 rule. And just to give you an illustration of how these rules 

18 would work. This table uses the 2015 data produced in 2017 by 

19 the Department of Education related to 2014 rule and compares 

20 that rule to one in which there's a $20,000 earning threshold. 

21 And so just to read across the columns in this table, the 

22 first column is the total number of programs that have degree 

23 recipients, according to the Department Education's IPEDS 

24 data. The second column is the number of degrees completed in 

25 2015 based on that data, so like five million students 

26 received degrees. The third column is the number of gainful 

27 employment programs in the 2015 database. That database 

28 excludes very small programs. And so that's part of the reason 

29 why there are some proprietary school programs that are not in 

30 the gainful employment data. The fourth column is a number of 
Committee Meetings - 02/15/22 25

1 programs that would fail the 2014 rule. So about 2000 out of 

2 the 8000 programs would fail. However, those programs 

3 represent a very small number of the total programs offered by 

4 postsecondary institutions in the United States. The next 

5 column is, if you added it, a $20,000 earnings threshold, that 

6 increases the number of programs that fails by about 1600. And 

7 in the last two sections provide some interpretation. So that 

8 shows that fraction of total postsecondary programs that would 

9 fail the rule under these two thresholds. So of all programs, 

10 1 percent of degree granting programs would fail the 2014 

11 rule. 1.7 would fail that rule augments it with a $20,000 

12 earnings threshold. It varies enormously by sector. So public 

13 four-year programs, almost no programs fail, even community 

14 colleges. Almost no programs fail. Failures are highly 

15 concentrated in the proprietary sector and also in the private 

16 not-for-profit sector. I also got some questions about the 

17 kinds of programs that are most likely to fail. So the right18 hand side of this chart shows the descriptions of the, 

19 programs that were most likely to have a failing program by 

20 the description of the program. So cosmetology assistant 

21 programs and the earnings in those fields are quite low. The 

22 reason I produced this was that people had asked whether 

23 teachers or, you know, early childhood education specialists 

24 or people in public service were likely to fail. And those are 

25 not the characteristics of programs that would fail just 

26 because they have higher earnings, and the levels of debt are 

27 not that high. I should also emphasize that, you know, even 

28 programs that have failing programs, most of them also have 

29 not just passing programs outside of the gainful employment 

30 space, but they also have passing gainful employment programs. 
Committee Meetings - 02/15/22 26

1 So students often have better options, not just in general at 

2 another institution, but often at the very same institution. 

3 And then the rest of my presentation is references. So I 

4 thought I would pause there and turn it back over. And I'm 

5 happy to answer questions.

6 MR. WAGNER: Thank you, Adam. I really appreciate 

7 that. Does anyone have any questions? There you go. Let's see. 

8 We see Johnson, go ahead.

9 MR. TYLER: Hi. Thanks, Adam, that's a really, 

10 interesting and clear presentation. I didn't understand your 

11 statement that if an institution had less than 51 percent 

12 borrowers that they wouldn't be covered by the 2014 gainful 

13 employment rule.

14 DR. LOONEY: That rule was based on the median debt. 

15 And so if the median student had not borrowed and the median 

16 debt of the program, completers would have been zero. It would 

17 have had people who owed debt potentially, but it would not 

18 necessarily be subject to the rule.

19 MR. TYLER: Thank you.

20 MR. WAGNER: Brad, you're up.

21 MR. ADAMS: Yes. Thank you, Adam. I just had a quick 

22 question, really confirmation on that last chart you showed 

23 just to confirm that it was only including program subject to 

24 the 2014 Gainful Employment Act, and that was not a review of 

25 how all programs would have fared under those GE metrics.
Committee Meetings - 02/15/22 27

1 DR. LOONEY: You mean the second to last chart that 

2 showed the fraction of programs that fail under alternative 

3 rules?

4 MR. ADAMS: Yes. If that was just the programs that 

5 were subject to the 2014 rule or is that all programs and how 

6 they would have fared if they were subject to the rules?

7 DR. LOONEY: The table showed all programs of which 

8 not all are gainful employment programs.

9 MR. ADAMS: Right.

10 DR. LOONEY: And so only a small number of all 

11 programs are subject to the gainful employment rules. And so, 

12 I mean, the reason that the effect is so concentrated in the 

13 proprietary sector is that the vast majority of programs at

14 nonprofit and public institutions are exempt by legislation 

15 from the gainful employment system.

16 MR. ADAMS: Thank you for confirming. Thank you.

17 MR. WAGNER: Debbie, you're next.

18 MS. COCHRANE: Thank you. Yes, I had a clarifying 

19 question about some of the data and particularly around the 

20 impact. And the note I believe said something like 2015 GE 

21 data [inaudible] 2017 IPEDS. And I'm wondering if what we're 

22 looking at in that slide is kind of an analysis of what the 

23 outcomes would be based on the old data after which we know 

24 that there was industry response, a lot of programs closed, or 

25 is that a more updated analysis using IPEDS data or scorecard?
Committee Meetings - 02/15/22 28

1 DR. LOONEY: It is the same. I should be clear. It is 

2 the 2015 gainful employment data, and it is the 2015 IPEDS 

3 data. It's just that there was a lag. The 2015 data was not 

4 released until 2017, which maybe a detail I did not need to 

5 include. But it is not, I mean, clearly a fair number of 

6 programs did close after this. And so it is not updated for 

7 that, and I suspect that the information would look somewhat 

8 different today.

9 MS. COCHRANE: And so probably any of the programs, 

10 if to the extent that some of those failing programs close in 

11 that chart would actually overstate impacts. Is that correct?

12 DR. LOONEY: That's right. Yes, a number of the 

13 schools that had the largest numbers of failing students have 

14 since closed. And so the total number impacted they closed 

15 because of, I think legal action. And so I think that the 

16 total number of students and programs that would be impacted 

17 by the rule would be smaller.

18 MR. WAGNER: Okay. Marvin, you're up.

19 MR. SMITH: Adam, thanks for this data. Some of the 

20 things we're thinking about in terms of the timing of when GE 

21 rules are implemented is the problem of looking at income data 

22 for 20 and 21 with the pandemic. And I know that this is based 

23 on using three-year averages. But do you have an opinion on 

24 ways to look at an expanded 5-year average or how would you 

25 deal with the loss of income during the pandemic?

26 DR. LOONEY: Well, just as a matter of data 

27 protection, my understanding is that the reporting 

28 requirements that produced this data were terminated during 
Committee Meetings - 02/15/22 29

1 the last administration. And so that infrastructure does not 

2 exist. And so, you know, getting that apparatus back up and 

3 running is going to take several years, and so I think that 

4 there will not be data available for these years. In fact, I 

5 suspect it will be several years before, the pandemic will be 

6 over by the time the rates are produced. That said, just to 

7 clarify things, these data are the earnings in the third year 

8 after program completion. So it's not an average. It's in the 

9 third year and it's two combined cohorts typically. So I don't 

10 know if it is for gainful employment, but typically it is not 

11 an average. It's a point in time estimate of the earnings of 

12 graduates.

13 MR. WAGNER: Okay, thank you. Emmanual, you're up.

14 MR. GUILLORY: So the question I have actually is 

15 different from what Adam just said, I think I have a question 

16 about that, but we'll get back to that. So Adam, thank you so 

17 much for your presentation. Thank you for the time and effort 

18 and energy to put that together. So, I really appreciate that. 

19 I wanted to ask you a question about some of the data that you 

20 had around the total programs. Degrees completed GE programs

21 at the various sectors of institutions and types of 

22 institutions. So with GE programs that you had listed in 

23 particular, I'm talking about the slide that says scope of the 

24 rule and who is affected. So, for example, for private 

25 nonprofit four-year, you have at 173 programs that all private 

26 nonprofit four years or more, there was only 173. I just want 

27 to clarify that what that data is telling us is that there 

28 were only 173 programs with 30 or more students in the cohort 

29 that actually had to be published as GE programs? And the 
Committee Meetings - 02/15/22 30

1 reason why I just want that clarification is because the 

2 Department put out data as well from federal student aid 

3 regarding GE programs that list the total amount of GE 

4 programs versus the amount of GE programs that are actually 

5 published, and that has to deal with the cohort number. So I 

6 want to make sure that was what you were showing us.

7 DR. LOONEY: I'm showing the published numbers. So 

8 there are more GE programs than there are published data. And 

9 so these are the ones that have published data, and the ones 

10 that are too small, so to speak, are not in this table. And I 

11 mean, frankly, I don't know how they should be treated because 

12 the numbers of students are quite small and many of these 

13 programs.

14 MR. GUILLORY: Right. We're going to get to this 

15 later. But since the Department will be proposing to calculate 

16 rates on small programs, then those programs could then also 

17 be included. So recent data does show us that in the nonprofit 

18 sector, there are over 18,000 programs that were qualified as 

19 GE programs, but only 2,956 of those programs were actually 

20 published. So now, with new proposals that we'll talk about 

21 later, I think all of those additional programs will now be 

22 calculated on those programs too.

23 DR. LOONEY: Yes, I mean, I can see how many programs 

24 have, undergraduate certificates at those programs. I think 

25 that's an answerable question. So I could see they published 

26 the number of students that get degrees in those programs. And 

27 I could count those.

28 MR. GUILLORY: Okay. Thank you.
Committee Meetings - 02/15/22 31

1 MR. WAGNER: Just want to announce that Jaylon Herbin 

2 representing civil and consumer rights is in, and he's up to 

3 ask a question, so take it away, Jaylon.

4 MS. JEFFRIES: Okay, just real quick Jaylon, 

5 addressing questions in the chat. Dr. Looney is it alright if 

6 I go ahead and send out your presentation to the entire 

7 committee at this point?

8 DR. LOONEY: That's okay, thank you.

9 MR. WAGNER: Thanks, Cindy. Go ahead, Jaylon.

10 MR. HERBIN: Thank you so much for that presentation. 

11 It was really helpful. One thing that struck me was the 

12 $20,000 earnings threshold. It seems to be very low. I guess 

13 really, the one thing that we're concerned about is a lot of 

14 the single families that we represent single parents actually, 

15 150 percent of those of the federal poverty level is actually 

16 above $25,000. Greg, can you tell us how much this number, how 

17 this number was determined? And is it because 150 percent of 

18 the poverty level of families are one of them or how did you 

19 come up with that $20,000?

20 DR. LOONEY: Well. I used $20,000 as an illustrative 

21 example. I don't know that the Department has a particular 

22 dollar amount that it is picked on. I mean, I agree with you 

23 the $20,000 isn't enough to live on as a family. So at the 

24 same time, I wanted to pick something that was illustrative 

25 and would give you a sense of what the impact was.

26 MR. WAGNER: Greg. I'm sorry, go ahead.
Committee Meetings - 02/15/22 32

1 MR. HERBIN: And just really quick, is the Department 

2 willing to rethink that number, or is Greg willing to share 

3 what number they're looking at for this?

4 MR. MARTIN: We haven't discussed a number with 

5 relation to that yet, as Dr. Looney pointed out, that was a 

6 figure he used for illustrative purposes, but that that does 

7 not relate to any number that we have. We do, 1.5 times the 

8 HHS poverty guideline is incorporated into the calculation of 

9 discretionary income rate, but that's not what that comes in 

10 at it's not a dollar figure.

11 MR. GUILLORY: Thank you.

12 MR. WAGNER: Barmak, go ahead.

13 MR. NASSIRIAN: That was an excellent presentation, 

14 it was the most compelling overview I've seen. And I have a 

15 question for you with regard to the amortization terms for a 

16 law, for graduate programs, I mean, the 10-, 15- and 20-year 

17 amortization terms are obviously like any number you pick is 

18 quite arbitrary. Is there a way of justifying particular 

19 amortization terms on the basis of like expected wage 

20 differentials associated with different credential levels?

21 DR. LOONEY: Well, I thought that in part, the 

22 different amortization schedule was motivated by some sense of 

23 the timeframe over which students typically would repay a loan 

24 or the projected timeframe over which a student would expect 

25 to have a boost to their earnings. Although I'm not sure 

26 exactly what the exact correspondence is between, you know, I 

27 don't know exactly how we got to a 10, 15, 20 schedule for 

28 that. So I think that's a good question to ask. Obviously, the 
Committee Meetings - 02/15/22 33

1 different amortization schedules do imply very different 

2 levels of debt that are acceptable, and so it is a good 

3 question to ask whether those are the appropriate levels of 

4 debt relative to the earnings boost that students presumably 

5 get from those more advanced degrees.

6 MR. WAGNER: Okay, I just want to let everyone know 

7 that we have three folks still in the queue. Want to remind 

8 you guys to try to keep the questions brief. If you have 

9 additional questions, feel free to send them to FMCS and we'll 

10 forward to Dr. Looney and then we'll be turning it back over 

11 to Greg. So the next person I see in line is Emmanual.

12 MR. GUILLORY: Yes, I want to ask that second 

13 question that I had mentioned. And so, Adam, I believe, so I 

14 think my colleague Marvin had brought up the pandemic and how 

15 that could potentially impact these D/E rates. And I believe 

16 that you had mentioned that at the time, we would have D/E 

17 rates calculated it wouldn't include the pandemic. Did you say 

18 that I don't want to put words in your mouth?

19 DR. LOONEY: I mean, I defer to the mechanics at the 

20 Department of Education who will be responsible for collecting 

21 this data. But my sense is that the institutions have not been 

22 reporting who is enrolled in their programs and will not 

23 report that information to the Department of Education until 

24 the Department issues a new rule. And so only then will the 

25 Department know who is enrolled in a particular program. And 

26 then 3 years after that, will we know the earnings of those 

27 individuals. And maybe the timeline is shorter, slightly 

28 shorter than that, but I think it's quite a long timeline.
Committee Meetings - 02/15/22 34

1 MR. GUILLORY: Okay. The reason why I ask is because 

2 this rule, let's say it goes into effect July 1st of 2023. And 

3 I don't think the Department will be able to then calculate 

4 D/E rates for year 2023 2024 academic year. But if that was 

5 the case, then 2019, 2020, and 2021 would be included. But 

6 let's say that rates aren't calculated until 2024 2025 

7 academic year. Well, then you have 2021 2022, or 2020 2021, 

8 2021 2022, that would be included. So since we are still in 

9 the pandemic and it's 2022, it just seems like the pandemic 

10 would have an impact on these D/E rates. And I would hate for 

11 institutions to have a score that is failing, obviously, but 

12 due to elements that are not in their control. So I just want 

13 to highlight that.

14 DR. LOONEY: Sure. Just to try to clarify, but again, 

15 I defer to someone at the Department who might know better 

16 that you have a rule that says, please report who has 

17 graduated from your GE program. We report the number of 

18 students as of who graduated in the year 2022 or maybe the 

19 year 2023. And then we check how much they earned in year 2025 

20 or 2026. And the debt to earnings ratio is the ratio of the 

21 debt amortized at the time that they graduate within 2022 or 

22 2023 divided by their earnings in 2025 or 2026. And that seems 

23 like it's relatively far out.

24 MR. WAGNER: Thank you. We have let's see, we have 

25 Adam, Anne, and then we have Johnson. And if I could ask the 

26 negotiators to hold off on joining the queue after that and to 

27 submit any further questions to FMCS, that'd be great. Just in 

28 the interest of time and a very good discussion. Let's go 

29 ahead. Adam, you're up.
Committee Meetings - 02/15/22 35

1 MR. WELLE: Sure. I'll add my thanks to Dr. Looney 

2 for this presentation, I find it very helpful. I just wanted 

3 to follow up on one comment. There was a mention about those 

4 low earnings programs and that there was some academic 

5 literature out there suggesting that, you know, those programs 

6 are not necessarily there to provide necessary training but 

7 are more serving as barriers for incumbents. And I'm wondering 

8 if Dr. Looney it could be possible to circulate any of that 

9 literature or say anything more about that?

10 DR. LOONEY: Sure, I mean, I'm happy to. There's a 

11 paper that's forthcoming on exactly this topic, and there's 

12 another paper that I have included in the references of this 

13 slide. But I mean the, just to give you a couple of pieces of 

14 data, the educational requirements to enter cosmetology, I 

15 think that they require something like 2000 hours of 

16 educational investment that is among the largest of any field. 

17 So like to be an EMT, you need 150 hours of training. To be an 

18 electrician, I think in the median state, you need zero hours 

19 of occupational training. In a lot of these fields, there's 

20 not an educational requirement. And so I think if you look at 

21 the relationship, for example, between how many hours of 

22 training states require and the earnings of students who 

23 graduate from this programs, there is no relationship. So it's 

24 not like if you go to school, if your state requires 2000 

25 hours of education instead of 1000 hours, you don't make twice 

26 as much. You don't make one percent more. In contrast, the 

27 students who graduated from the 2000-hour program have a lot 

28 more debt than students who graduate from the 1000-hour 

29 program. And so clearly that that is an area where the state 
Committee Meetings - 02/15/22 36

1 policy is driving the costs and the debt rather than solely 

2 being a function of the institution.

3 MR. WAGNER: Anne, go ahead.

4 DR. KRESS: Thank you, and I also want to thank you 

5 for the presentation. I also want to thank you for the last 

6 point that you made, because I think it's very important for 

7 folks to understand that in most of these cases, when there is 

8 a professional or professional licensure that results, this is 

9 not within the control of an educational institution to 

10 determine the criteria for sitting for those exams or 

11 receiving those licenses. So to me, that's really important. I 

12 really want to ask about the income threshold, since that 

13 seems to be a great interest in this conversation. What you 

14 provided with an average, which is wonderful, but an average 

15 doesn't tell the whole story, right? I'm in Virginia. I'm in 

16 northern Virginia. The wages that you would see in my part of 

17 the state don't look anything like you would see in the more 

18 rural parts of the state for all sorts of reasons. And so I 

19 just want to caution us against the challenges that averages 

20 present. There are about 260 rural community colleges. They 

21 serve close to 700,000 students. The economic situation that 

22 employers can and will pay in those markets is very different 

23 than what you would see in Alexandria or Annandale here in 

24 northern Virginia. So I think we just want to be really 

25 mindful about that, in many cases, even though the wages would 

26 not look large and are not large to anyone who lives in an 

27 urban area, they could be a significant step up for somebody 

28 who lives in a more rural area.
Committee Meetings - 02/15/22 37

1 MR. WAGNER: Carolyn, you'll be the last question. It 

2 doesn't mean that if there's additional questions you can't 

3 send in FMCS we'll direct them to Dr. Looney. But last but not 

4 least, Carolyn go ahead and then we're going to have to resume 

5 negotiation.

6 MS. FAST: I just wanted to say also thank you to Dr. 

7 Looney, for a very helpful presentation, and I had more of a 

8 comment and a question really quickly, and I wondered if it 

9 would be possible to share the helpful graph that was showed 

10 if that's possible for the one that just showed the 2014 

11 gainful employment rule without the earnings threshold. I 

12 don't know if it's possible, the only I say this, I thought it 

13 was a really useful way to think about the visualization for 

14 me was very helpful and it was very useful in terms of 

15 thinking about the different earnings metrics, earnings 

16 threshold metrics that the Department had proposed, especially 

17 the fourth one, which I'm sure we'll talk about later. But the 

18 only reason I'm raising it now is that I thought that that 

19 graph was a really helpful way to see what would happen if we 

20 took the debt to earnings metric out I thought since we had 

21 the metric near us, we could look at it now. But maybe we can 

22 do that later. If that's possible, it doesn't look like it can 

23 be shared now.

24 DR. LOONEY: I'm going to have that circulated, so.

25 MS. FAST: Okay, great, thank you.

26 MR. WAGNER: Okay. Thank you, Carolyn and thanks for 

27 no further questions, and I'm going to go ahead and turn it 

28 back to Greg.
Committee Meetings - 02/15/22 38

1 MR. MARTIN: Yeah. Point of order, don't we have the 

2 presentation of data from the Department first? Brady?

3 MR. ROBERTS: I believe we do. Greg I'll ask your 

4 team, have they entered the Zoom meeting? I didn't see them in 

5 the waiting room.

6 MS. JEFFRIES: Brady, Christopher is in the meeting 

7 already, or at least he was a minute ago.

8 MR. ROBERTS: Oh, I do see Chris. Hi Chris, do you 

9 want to come on camera and introduce yourself?

10 MS. JEFFRIES: Yes, he is on camera. So Chris, are 

11 you going to be the first speaker for the Department from the 

12 Department staff?

13 MR. BENNETT: Thank you for having me. My name is 

14 Chris Bennett, and I'm a statistician in the office of the 

15 chief data officer, and I'll be talking about two memos that 

16 we put together in response to earlier requests. I believe in 

17 the first session. And afterwards, my colleague Brian Fu and I 

18 will take any questions that you have. So I believe someone 

19 was going to be sharing the two memos. Is that right? Thank 

20 you. And so I'll just briefly walk through these. So overall, 

21 this first memo, which I believe was shared with you, the goal 

22 of the small cohort sizes analysis was to examine the extent 

23 of suppression due to small cell sizes, both in terms of the 

24 share of programs that are affected, and the share of students 

25 enrolled in those programs whose outcomes can't be disclosed. 

26 And for this analysis, the threshold that was used was less 

27 than 30 completers per cohort to identify small programs, and 

28 that's the same threshold that was used in the 2014-year GE 
Committee Meetings - 02/15/22 39

1 rule. And so a little bit about this data, here when we're 

2 talking about programs, we're talking about a unique 

3 combination of institution, as indicated by 6-digit OPE ID 

4 program or field of study measured by four-digit CIP code and 

5 credential level. This analysis is based on award years, 2016 

6 and 2017, and the median debt is based on program completers, 

7 not just borrowers, as Dr. Looney mentioned earlier. And we 

8 used a version of debt that excludes Parent PLUS loans. Again, 

9 for reference, it's based on third year earnings after program 

10 completion. And here we're comparing the published data 

11 against a universal file that looks at all programs that have 

12 any completers, not just 30 or more completers. So briefly, 

13 I'll talk through table 1. Here, we're looking at the share of 

14 GE programs and completers that have fewer than 30 graduates 

15 in a cohort broken out by institutional control. And so what 

16 you see here on the left-hand side of the screen is the share 

17 of GE programs that have less than 30 Title IV completers. And 

18 so what we see is that in the two-year cohort for award years 

19 2016 and 2017, the majority 88 percent of the programs at 

20 public institutions, 88 percent of the programs at nonprofit 

21 institutions and 55 percent of programs at proprietary 

22 institutions were too small to be shown. But then on the 

23 right-hand side of this table, what you see is that the 

24 percent of actual completers so the share of students in those 

25 small programs is significantly smaller. So those small 

26 programs represented 40 percent of students completers at 

27 public institutions, 22 percent at nonprofit institutions and 

28 4 percent are proprietary institution completers. So it's a 

29 lot of programs, a smaller share of actual completers. Here, 

30 you'll notice there are two rows two-year cohort and four-year 
Committee Meetings - 02/15/22 40

1 cohort, that two-year cohort again is for award years, 2016 

2 and 2017. The four-year cohort here is an estimate where we 

3 double the number of completers from 2016 and 2017. So we were 

4 looking to see what would happen if we doubled the length of 

5 time that we examined for a cohort. And as you can see, if you 

6 doubled that time, the share of programs that were small went 

7 down by about 10 to 12 percentage points on the left-hand side 

8 for all control types. And then on the right-hand side, it 

9 reduced the number of students who were in small programs by 

10 about half, so they went from 40 percent of students being in 

11 small programs, excuse me, completers being in small programs, 

12 the public institutions to 22 percent. If you were to double 

13 the length of time you looked at four-years rather than two. 

14 And then we can shift down to the bottom of table 1. And so 

15 sorry, that's broken up by that page, but in essence, the last 

16 two lines of table 1 show you the total number of programs or 

17 completers that are in that type of institution. And then the 

18 additional coverage that you would get by extending the period 

19 to a four-year cohort rather than a two-year cohort. So those 

20 numbers give you a sense of essentially what the additional 

21 coverage would be in reportable accounts if you extended the 

22 length of time for each cohort. We'll move on to table 2. And 

23 so table 2 gives a little bit more granularity. It looks 

24 specifically at the percent of GE programs that had fewer than 

25 30 graduates in a cohort that's broken out by credential level 

26 and control. And so the broad indication here is that the 

27 largest number of programs are at the undergraduate 

28 certificate level across all control levels public, nonprofit, 

29 proprietary. And what we see in a broad pattern is the public 

30 and nonprofit institutions. And can we scroll down just a 
Committee Meetings - 02/15/22 41

1 little bit more to see the full table? Thank you. Thank you 

2 very much. What we see is that public and nonprofit 

3 institutions, 80 plus percent of programs are not able to be 

4 disclosed because they are small programs. And that's true 

5 regardless of whether you're looking at a two-year time period 

6 or expanding it to that four-year time period. And proprietary 

7 institutions, the coverage is a little better. Broadly, what 

8 we see is that the largest category undergraduate 

9 certificates, about half of programs are not able to be 

10 disclosed at proprietary institutions, 48 percent. And it gets 

11 up to 50s and 60s percent being too small to report for 

12 different credential levels. So overall, this is just a much 

13 more detailed view of what share programs by credential type 

14 and control are not able to be viewed because the sizes are 

15 too small of the completed cohort. We can move on to table 3. 

16 And so for table 3, this is again focusing on the number and 

17 share of completers, so whereas table 2 look at the share 

18 programs, table 3 is focusing on the share of completers. And 

19 what we see here is that for public institutions and nonprofit 

20 institutions, again, zeroing in on that largest category 

21 undergraduate certificate programs, 39 percent of completers, 

22 excuse me at public institutions are not able to be shown to 

23 do the small program size at the two-year window. Public 

24 institutions that nonprofit institutions 12 percent of 

25 undergraduate certificate completers are in small programs and 

26 only 4 percent of completers at for-profit undergraduate 

27 certificate programs are in small programs. And again, you can 

28 walk through each different level to sort of get that 

29 indication. But the overall point or the overall take away for 

30 this year is that a relatively smaller share of students are 
Committee Meetings - 02/15/22 42

1 in small programs, even though the share of programs that are 

2 small is a little bit higher. And so that's sort of the broad 

3 strokes for the small cohort sizes, and this is intended to 

4 give a broad vantage point of what kind of coverage we 

5 currently have using a model of two-year cohorts and how that 

6 might change if you extended it to four-years. So with that, 

7 I'll pause here and see if there are any questions about this 

8 memo before moving on to the second memo.

9 MR. WAGNER: Johnson, you're up.

10 MR. TYLER: Thank you. Thank you, Chris. I have two 

11 questions. The first is what's the difference between a 

12 completer and a graduate? I don't understand the difference in 

13 table 2 and table 3, they seem to be measuring something else.

14 MR. BENNETT: Those terms may be used 

15 interchangeably. This is measuring completers. So we may have 

16 just used graduate and completer. But they they're intended to 

17 mean the same thing.

18 MR. TYLER: Okay, thank you. And then the other 

19 question I have is, is this based on a 6-digit CIP code or a 

20 4-digit CIP code?

21 MR. BENNETT: This is, I believe it's based on a 4-

22 digit CIP code. I can confirm, but I believe it's 4 digit.

23 MR. WAGNER: Is that it Johnson? Okay. Debbie, you're 

24 up.

25 MS. COCHRANE: Thank you. My question was very 

26 similar to Johnson's last question about the CIP code level, 
Committee Meetings - 02/15/22 43

1 and I think just because that's a difference between the 2014 

2 rule and what's proposed here. So also, if you whichever one 

3 this is, if you have also the alternative that would be 

4 helpful to see as well.

5 MR. BENNETT: I can take that back and double check 

6 for you.

7 MS. COCHRANE: Thank you.

8 MR. WAGNER: Brad, go ahead.

9 MR. ADAMS: Thank you, Chris. So, you know, my 

10 takeaway here is because of the small end sizes at the public 

11 and nonprofit institutions that have GE programs that the 

12 majority of them are not subject to the D/E calculations, is 

13 that correct? Is that what I can read from this?

14 MR. BENNETT: This table is showing the majority of 

15 programs. The majority of students at those programs are in 

16 small programs.

17 MR. ADAMS: Which are not subject to GE?

18 MR. BENNETT: They are not able to have the rates 

19 calculated because of the small size.

20 MR. ADAMS: Thank you.

21 MR. WAGNER: Okay. I don't see any other questions. 

22 Chris. take it away.

23 MR. BENNETT: Alright. I'll move on to the second 

24 memo then. And so in the second memo that was distributed to 

25 folks, we're focusing on the effect of capping total loan 
Committee Meetings - 02/15/22 44

1 amount at the tuition, books, fees, and supplies. And so this 

2 is based on the 2014 GE regulation that was the policy of that 

3 median debt levels were capped based on an institution's 

4 tuition, fees, books, and supplies. Here, the data that we are 

5 using for this analysis is the official D/E metrics, the 2015 

6 GE rates and that included 8,650 programs with published data. 

7 Since I know that question came up earlier, this is again 

8 based on the published data. And here what we did was to do a 

9 reanalysis in which we did not apply the cap based on tuition, 

10 fees, books, and supplies. And so in broad strokes, in this 

11 third paragraph, what you see is that of the 8,650 programs in 

12 the data, more than two thirds had median cumulative debt of 

13 borrowers that was the same regardless of whether you applied 

14 the cap or not. So for the majority more than two thirds, 

15 there was no change. And so we did want to look at that by 

16 credential level. So the first table here does show how that 

17 shakes out by credential level. And so generally, what you see 

18 is that the fraction of programs we're applying the cap would 

19 reduce the median total loan debt increases along credential 

20 levels. So an undergraduate certificate level only about a 

21 quarter would have a median total loan debt that was reduced 

22 as a result of the cap. But by the time you get to graduate 

23 programs, it's about 97 percent of those programs would have a 

24 lower total loan debt median if the cap were applied. This 

25 just gives a sense at each of those levels. And it's also 

26 worth noting in this table again that the vast majority of GE 

27 programs from the 2015 GE rates we're at the undergraduate 

28 certificate and associate degree level. So while the share of 

29 programs that would have their rates, their median debt 

30 reduced at the graduate program level is pretty high, there 
Committee Meetings - 02/15/22 45

1 aren't that many programs at the graduate level, especially 

2 relative to those undergraduate credentials. We then looked at 

3 the 32.5 percent of programs where calculating the median 

4 total debt and removing the cap would increase their debt 

5 levels. And what we see is that the changes to their median 

6 debt would vary considerably overall. The median change if you 

7 were to remove the cap would be an increase of about $1,161. 

8 Again, this is only among those that would see a difference, 

9 and 25 percent of the programs would see an increase of about 

10 $3,800 and the highest 10 percent of changes would see an 

11 increase of over $10,000. And there are a smaller number about 

12 94 programs that would have a measured increase of about 

13 20,000. And those are again primarily at the graduate level 

14 where we see the more extreme changes. So taken together, the 

15 impact of removing the cap based on tuition fees, books, and 

16 supplies would be 2.3 percent of the passing programs would be 

17 reclassified into either failing or zone if the tuition, 

18 books, fees and supplies cap were removed. That's the high19 level summary of the impact of removing that tuition fees, 

20 books, and supplies cap, and I'm happy to take any questions 

21 you have.

22 MR. WAGNER: Marvin, you're up.

23 MR. SMITH: Yeah, a couple of questions. On the 

24 second paper, can you or did you look at breaking out by 

25 institution type, private, public for-profit?

26 MR. BENNETT: That is something that could be done. I 

27 don't recall that specific analysis being done already, so 

28 that's something I could take back as well.
Committee Meetings - 02/15/22 46

1 MR. SMITH: And then a quick follow up. It just seems 

2 like we still need, are we going to get to more data because 

3 what the Department proposing, getting rid of the pass-fail 

4 zone. Has the Department looked at how that might impact 

5 programs in schools by institution type?

6 MR. BENNETT: I am not sure where that type of 

7 analysis stands, so I'd have to ask.

8 MR. WAGNER: Johnson.

9 MR. TYLER: Yes, this is all very interesting and 

10 informative. But I'm curious, what if you can associate the 

11 number of students enrolled in some of these programs, so we 

12 have a better sense of how gainful employment would affect the 

13 public by and large? Because by looking simply at the programs 

14 that are effective, we don't know if a program is, you know, 

15 trying tens of thousands of students who are not benefiting 

16 from it versus one of these small programs that only has 20 

17 students that are kind of weighted equally in in this 

18 analysis, it seems to me.

19 MR. BENNETT: I did add that to the list of things to 

20 examine, along with the breakout by institution type. Also 

21 weeded it by the number of students as another supplementary 

22 analysis that I think would be feasible with the data.

23 MR. TYLER: Thanks.

24 MR. WAGNER: Barmak.

25 MR. NASSIRIAN: I have to confess that I found that 

26 the findings are a little counterintuitive to me, and I'm 
Committee Meetings - 02/15/22 47

1 wondering whether you could speculate as to what the cause 

2 could be. You would expect. I mean, what the data suggests is 

3 that graduate students are borrowing for subsistence purposes 

4 at a much higher rate than certificate students. Isn't that 

5 when the distinction that there is living costs being covered 

6 with loans? In the case of graduate programs, that the 

7 certificate students are just basically borrowing to cover 

8 tuition.

9 MR. BENNETT: I am reluctant to speculate. So I'm not 

10 sure what the source of it is, but it would be something 

11 beyond tuition, fees, books, and supplies.

12 MR. NASSIRIAN: Thank you.

13 MR. WAGNER: Dave, go ahead.

14 MR. MCCLINTOCK: I think I can answer some of that 

15 question. It's the way the median cap is used. So there's no 

16 in the 2014 GE rates, there was no consideration given for 

17 grants and other payments that are received. So if a program 

18 costs $10,000 and the student got $6,000 of Pell and took out 

19 the $9,500 the first-year loans to pay for the program, it 

20 just compared that, so for example, they had $4,000 left to 

21 pay for the program, they're taking it $5,500 stipend to cover 

22 living expenses while they're going to school. The previous 

23 rate compares the cost of tuition to the loans that were 

24 borrowed. So my example, the $9,500 was being included with or 

25 without the cap being applied. And so I think because of that 

26 fact, you're not seeing the decrease when you add the cap, 

27 most of it when you get rid of the cap, most of the loans were 
Committee Meetings - 02/15/22 48

1 being included already. And so reducing or removing the cap 

2 has a much smaller impact on the medium debt.

3 MR. WAGNER: Okay. Any other questions? Okay, thank 

4 you very much, Chris for the presentation. I'm going to go 

5 ahead and go right to the next Department presenter. That'd be 

6 Brian Fu.

7 MR. FU: I'm sorry. Nothing further from me, I was 

8 just supporting Chris. Thank you.

9 MR. WAGNER: Okay. No problem. Then I'll go ahead and 

10 turn it back over to Greg.

11 MR. MARTIN: Thank you, Kevin, and I want to thank 

12 our presenters, Dr. Looney and Chris for those excellent 

13 presentations that they did. Very informative. So as we're 

14 looking back at the GE paper again and in light of, I seemed 

15 to have lost my screen here, one second, bear with me a 

16 moment.

17 MS. JEFFRIES: Renee, you're sharing the wrong 

18 document.

19 MR. MARTIN: Oh, thank God, it wasn't me. Thanks, 

20 Renee. Appreciate it. It's good to get a little jolt once in a 

21 while. So yeah, so we're going to go and look at these 

22 regulations and walk through them. I think what I'd like to do 

23 in view of how much we have to get through in the timeframe 

24 that we've got to go through it. As I said previously, we are 

25 going back to a lot of what was in the 14 rule and all those 

26 rules are not currently extant because they were taken down. 

27 They are, existing rules. And so what I want to concentrate on 
Committee Meetings - 02/15/22 49

1 are the changes that we've proposed here. So in view of that, 

2 I would like not to read through every, line of amendatory 

3 text because I don't think we would ever get through all of it 

4 if I do that. However, as we go through, if there are areas 

5 that we're not, hitting that you want to discuss in more 

6 detail or want further clarification, please, let me know. So 

7 again, I'm trying to engage in this balancing act between 

8 covering everything and being mindful of the timeframes that 

9 we have. So let's just begin then with I'll consider all 

10 beginning with 600.10, the date, extent duration of 

11 eligibility. So just starting there before we get into subpart 

12 Q. We have made an update in this section to add that 

13 institutions must report updates and changes to their gainful 

14 employment programs, including meeting any restrictions on 

15 reestablishing a GE program as part of seeking eligibility for 

16 those programs. So you can see there in (c) eligible programs 

17 go down to one where it says here romanette 4. And this 

18 actually should have romanette 4 indicated here, no, we 

19 changed it to romanette, let me be certain that we have three 

20 weeks of you've got there, right, okay, so this should be we 

21 go down to for gainful employment under 34 CFR 668, update the 

22 application under 600.21 and meet any time restrictions that 

23 prohibit the institution from establishing or reestablishing 

24 eligibility. So, and yeah, there we go. And that's you'll see 

25 that that's that, says romanette 4. But I want to point out 

26 that this should actually be romanette 5 because through the 

27 prison education rulemaking, we have already proposed to add a 

28 new romanette 4 to that paragraph, which would say that for 

29 the first eligible prison education program under subpart P of 

30 34 CFR part 668 offered at the first two additional locations 
Committee Meetings - 02/15/22 50

1 as defined in 600.2 at the federal state or local penitentiary 

2 reform, reformatory work, former juvenile justice facility or 

3 any other similar correctional institution. So 4 will be that 

4 rule that pertains to prison education, and this will be 5. So 

5 no text is changing here related to GE but when the prison 

6 education rules are final, that would be the way that would 

7 read. So that's the only change under 600.10. We'll go down to 

8 600.21, which is updating application information, so let's 

9 take a look at this. We have modified the language in this 

10 section to include reporting on the credential level of GE 

11 programs, as well as updates to certifications for those 

12 programs. You can see here under reporting requirements for 

13 any program that is required to provide training that prepares 

14 a student for gainful employment, establishing the 

15 eligibility, or reestablishing. Discontinuing the program's 

16 eligibility. Ceasing to provide the program for at least 12 

17 months. Losing eligibility under 600.40 or changing the 

18 program's name, CIP code, or, as we've added here, credential 

19 level or updating the certification pursuant to 668.410. And 

20 that's where the certifications are included. And we'll get to

21 that later on as we walk through the document. So that 

22 concludes everything that's not part of subpart Q. So I want 

23 to get through all that first and I'll ask if there are any 

24 questions related to that before we move on to the bulk of 

25 this, which will be in subpart Q or post subpart Q.

26 MR. WAGNER: Thank you, Greg. Brad.

27 MR. ADAMS: Thank you, Kevin. And Greg, I just want 

28 to state that I'm deeply concerned that the allotted amount of 

29 time we're getting to review the Department's gainful 
Committee Meetings - 02/15/22 51

1 employment proposal is insufficient. In the past, the entire 

2 rule makings have been dedicated to this rule and at best, now 

3 we've got three hours left of today and maybe one day in the 

4 next session to discuss the most important rule for our 

5 industry in many years. Schools will go out of business; 

6 people will lose their jobs and students will be left with 

7 nowhere to go. While our economy has over 10 million open jobs 

8 today, there are around 8 million students in all higher 

9 education, of which only 1.2 million are attending proprietary 

10 schools. Many industries facing critical job shortages, was 

11 just shown on 60 minutes like nursing, could lose programs 

12 that are helping fill the employment gap. And while the 

13 Department’s proposal contains some components of the 2014 

14 rule that we'll review today, the 2022 proposal differs in so 

15 many significant ways that I'll be highlighting throughout the 

16 day. The 2014 rule at least had components that improve the 

17 quality and fairness, and unfortunately, the new proposed 2022 

18 rules remove so many significant items that it appears the 

19 Department does not really use the 2014 rule as a starting 

20 place as requested by this committee. As I previously stated 

21 in week one, our view is that all students in all programs and 

22 all institutions would benefit from debt to earning rate 

23 information calculated in this rule. And Adams presentation is 

24 a great lead-in to the fact that they did not include programs 

25 not subject to gainful employment in their review. But a 

26 report issued this week from the Texas Public Policy 

27 Foundation, a 501c3, nonprofit, nonpartisan research 

28 institute, actually published a report that I'll drop in the 

29 chat that finds that gainful employment rules will apply to 

30 all programs in all sectors of higher education using recent 
Committee Meetings - 02/15/22 52

1 data. 51 percent of the programs failing in total would be 

2 private nonprofits, and 39 percent would be at public 

3 institutions and 11 percent would be at for-profit 

4 institutions. The research continues to highlight the loophole 

5 of the gainful employment rule that misses about 90 or 89 

6 percent of programs at nonprofit and public and leaves 

7 students with unmanageable levels of debt relative to their 

8 income. The Department has argued that it lacks statutory 

9 authority to require degree programs and institutions of 

10 higher education to comply with the gainful employment rule. I 

11 repeatedly have observed, the Department has the authority to 

12 require all programs at all institutions to demonstrate 

13 compliance with D/E rates under a Statutory Quality Assurance 

14 Authority at Title 20 U.S.C. section 1087 D subsection A 

15 paragraph 4. There is no need a requirement to the Department 

16 accountable to not attach the Department's [inaudible] 

17 framework to the gainful employment concept. But do you speak 

18 to the time issue that we now have three hours to discuss this 

19 issue?

20 MR. MARTIN: Yeah, I will speak to that same issue, 

21 Brad. I understand that given the number of topics that we 

22 have on this table, that there is less time devoted to GE than 

23 has been in the past and that the time constraints are tight. 

24 I don't tend to restrict anybody's ability or right as part of 

25 this group to make any comments they want to on any of these 

26 topics as we go through. There's no intent on the part of 

27 Department to circumscribe anything, here. So certainly, all 

28 those points you want to bring up, you will have the 

29 opportunity to do so, as well as any other members of the 

30 committee. I would understand your point about the extent to 
Committee Meetings - 02/15/22 53

1 which these rules align with these proposed rules align with 

2 what we had in 2014. I do admit or stipulate rather that there 

3 are some significant differences, but I would maintain that we 

4 have pretty much adopted the framework of the 2014 rule and in 

5 doing that have adhered to the spirit of what was requested by 

6 the committee during the last session. I will do my best to 

7 get through these, as I said before, where anybody feels they 

8 have to stop and to make a point or to go back and reiterate 

9 something, or if there's something they feel I have missed 

10 that they want to review, please feel, free to do that. Other 

11 than that, I would just say that the time that we have we'll 

12 make every effort to cover these rules in their entirety over 

13 the course of today.

14 MR. ADAMS: And Greg, to my second question, can you 

15 comment if the Department looked into its statutory authority 

16 to apply this debt to earning rates to all programs under 20 

17 U.S.C. section 10 87 D subsection A paragraph 4?

18 MR. MARTIN: We have considered that. The 

19 Department's position is why we are including energy programs 

20 is our continued concern about the problems we do have rather 

21 we do have concerns about earnings across the board for low 

22 earnings and high debt programs across the board. And that's 

23 one of the reasons why we are going to propose disclosures 

24 across all sectors. However, that said, in this rulemaking, we 

25 are proposing to clarify the eligibility requirements that are 

26 specific to gainful employment programs, and that has been 

27 true under the Higher Education Act for decades, that there is 

28 a specific reference to gainful employment programs that apply 

29 only to for-profit and certificate programs. We are 
Committee Meetings - 02/15/22 54

1 maintaining that t position from the previous rules. I 

2 understand that there is disagreement on that subject, but 

3 that is where the Department has landed. And as far as the law 

4 goes, I can invite my counsel Steve to comment on that.

5 MR. FINLEY: Yeah, thanks, Greg, and thanks, Brad, 

6 for raising the question. I mean, there's an established basis 

7 for the Department to regulate under the gainful employment 

8 language in the Higher Education Act here, and that's what 

9 we're continuing to use. There are efforts to broaden the 

10 amount of information that's under consideration for all 

11 programs here, and that's the framework that's in front of 

12 everyone for discussion. I understand that you've identified 

13 other statutory authority that could possibly be used to try 

14 to establish similar requirements for every program, but 

15 that's not the proposal in front of us for discussion right 

16 now.

17 MR. MARTIN: Thanks, Steve.

18 MR. WAGNER: Before we get to Barmak really quickly 

19 just wanted to announce that Ashley Schofield is in for 

20 minority serving institutions and then Barmak you are up.

21 MR. NASSIRIAN: In the interest of time, I'm not 

22 going to belabor the point, but I just wanted to point out 

23 that given the fact that you now have fairly mechanical

24 upfront requirements in 600.10 and 600.21, it would really be 

25 helpful for the Department to articulate some fairly minimal 

26 upfront criteria before a program can be approved. Simple 

27 things like a market study that indicates the program is 

28 likely to pass the scores, some kind of vetting of it up 
Committee Meetings - 02/15/22 55

1 front. And this is a particularly important issue because I'm 

2 not sure what the Department intends to do with the debt of 

3 students that it allowed to be plugged into the programs 

4 almost as guinea pigs to see if the program is good. What 

5 happens to those people when the program fails becomes a real, 

6 significant moral issue? So I would encourage the Department 

7 to contemplate a little bit more substance on the front end 

8 before it approves the programs. Thank you.

9 MR. MARTIN: Thank you, Barmak.

10 MR. WAGNER: Thank you. Johnson, you're up.

11 MR. TYLER: Thanks. Can I go back and ask Chris 

12 Bennett a question about one of the papers that he presented?

13 MR. MARTIN: Sure.

14 MR. TYLER: So, Chris, are you there?

15 MR. BENNETT: Hi.

16 MR. TYLER: Yeah, so I had a little more time to look 

17 at the first paper you presented with table 1. I just want to 

18 make sure I understand it because I think it answers my 

19 question that I was concerned about it. How many people are 

20 affected by GE not just the programs. So table 1, the column 

21 to the right entitled percent number of all T4 completers in 

22 GE programs and programs with less than 30 T4 completers. So 

23 the 4 percent in that two-year cohort, that's actually means 

24 96 percent have an end number above 30 and hence would be 

25 covered. Is that right?
Committee Meetings - 02/15/22 56

1 MR. BENNETT: 96 percent of students at proprietary 

2 GE programs are in programs that have 30 or more completers.

3 MR. TYLER: Okay, great.

4 MR. BENNETT: So they would be covered, yes.

5 MR. TYLER: And so if you go to the second page of 

6 that paper, which has the table continuing on it, the number 

7 that's almost a million is the number of students who would be 

8 covered by the GE rule. Is that right?

9 MR. BENNETT: I'm sorry, could you say that one more 

10 time?

11 MR. TYLER: The 996,000 students the number in in the 

12 far column in the upper right. Is that the number of students 

13 at a for-profit school that would be covered under a GE?

14 MR. BENNETT: Yes, that's the Title IV completers at 

15 GE programs or in the proprietary sector. Yeah.

16 MR. TYLER: And there's this difference between the 

17 two-year cohort versus a four-year cohort is this basically 

18 saying by extending the analysis, by two more years you're 

19 only protecting 2 percent more students. Is that right?

20 MR. BENNETT: So it's showing it reduces the share 

21 that aren't covered basically in half across each sector, and 

22 since it was 96 percent to begin with in proprietary sector, 

23 it's 98 percent. So it makes a bigger difference in the public 

24 and nonprofit sectors, but across all, it reduces about by 

25 half.
Committee Meetings - 02/15/22 57

1 MR. TYLER: I see. Okay, thanks very much.

2 MR. BENNETT: And one just confirmation from earlier. 

3 It is the four-digit CIP code that is used in this small 

4 program analysis.

5 MR. TYLER: Thank you.

6 MR. WAGNER: Thanks, Chris. Let's see, we have Adam 

7 up next.

8 MR. WELLE: Sure. And I don't want to put too fine a 

9 point on this, but just going back to Brad's comments and the 

10 comments from a couple of times high standards to all 

11 institutions. It is my understanding that these provisions are 

12 being proposed under the sections of the Higher Education Act 

13 that specifically instructed only certain proprietary 

14 institutions and vocational programs are eligible for 

15 financial aid. So in other words, it's the statute itself. 

16 It's the Higher Education Act that specifies that only certain 

17 programs should receive the privilege of federal financial aid 

18 and taxpayer support when they're purported to prepare 

19 students for gainful employment in a recognized occupation and 

20 since enactment, Congress has drawn that distinction. So to 

21 push that these standards need to apply to all institutions is 

22 just at odds with the statute. And it really, in my view, 

23 doesn't have any relevant place in this conversation over 

24 these potential implementing regulations. And that argument, I 

25 really think, should be made to Congress. So, you know, I 

26 think it's the Department's goal. I think it's all of our 

27 goals to seek to implement the intent of the Higher Education 

28 Act and the intent of Congress in good faith. And I just find 
Committee Meetings - 02/15/22 58

1 this discussion over whether these standards should apply to 

2 other institutions to be completely misplaced. And I'm looking 

3 forward to talking about the specifics of the standards, 

4 what's workable, what's effective, et cetera. So that's my 

5 comment. Thanks.

6 MR. WAGNER: Thank you, Adam. And Brad, you're up.

7 MR. ADAMS: Well, you know, even the Department's 

8 opening proposal, it says that we're here to collectively 

9 draft regulations that improve outcomes for all students, and 

10 we have the opportunity here to do that. So I'd like to 

11 present a proposal for everyone to think about over the lunch 

12 break here that even though the Department declines to use 

13 Statutory Quality Assurance Authority to extend this 

14 accountability framework to all institutions it still can and 

15 should require all institutions to calculate and disclose D/E 

16 rates for informational purposes. Under Title 20 U.S.C. 

17 section 1092, the Department is authorized to require the 

18 calculation and disclosure of a wide range of institutional 

19 and financial assistance data. The Professional Licensure 

20 Disclosures, now required under 668.43, are based on this 

21 authority and I'm excited to see that the Department has 

22 included section 668.43 in this proposal that we're reviewing 

23 today. I'm requesting that the agency can and should move the 

24 entire debt to earning rate calculations and disclosure 

25 framework under 668.43, requiring all institutions to 

26 calculate and disclose informational D/E rates for their 

27 programs. The Department can require all institutions to 

28 calculate and disclose D/E rates for informational purposes 

29 while still using debt to earning rates to determine 
Committee Meetings - 02/15/22 59

1 eligibility for gainful employment programs under its proposed 

2 subpart Q. The calculation disclosure of D/E rates for all 

3 institutions if authorized under Title 20 U.S.C. 1092 while 

4 the authority to use D/E rates to determine the eligibility of 

5 gainful employment programs for the Department is separately 

6 authorized under title 20 U.S.C. 1002. There is no sound 

7 policy justification for denying debt to earning rate 

8 information to students and degree programs at all 

9 institutions of higher education. If debt to earning rates are 

10 deemed important and useful information, they are important 

11 and useful for all students. According to the Department's own 

12 data in the fourth quarter of fiscal year 2021, there were 8.4 

13 million, or 76 percent of the students participating in income 

14 driven repayment plans went to public or nonprofit 

15 institutions. These are graduates who have represented to the 

16 Department that they are not able to afford their student loan 

17 debt based on their income and family size. The majority of 

18 these students attended programs outside of the proprietary 

19 sector. To summarize, I'm proposing to move the debt to 

20 earning metric calculations into section 668.43 while still 

21 only apply debt to earning rates for eligibility in the 

22 federal direct loan program to gainful employment programs 

23 defined in our current proposal and subpart Q. Thus, nonprofit 

24 and public institutions would not lose federal direct loan 

25 eligibility over failing scores. Also, through the College 

26 Transparency Act bill, which is moving through Congress, is 

27 another indication that policymakers are demanding more data. 

28 Implementing this approach is more likely to be supported by 

29 all future administrations and would greatly benefit and 

30 protect all students in higher education.
Committee Meetings - 02/15/22 60

1 MR. WAGNER: Thank you, Brad. Go ahead, Brad.

2 MR. ADAMS: Question for Greg and Steve. Now the 

3 668.43 is open, thoughts about moving the debt to earning 

4 metrics into that section and referencing it within the 

5 gainful employment calculation, please.

6 MR. MARTIN: I'm not going to comment on that right 

7 now since it was just brought up. We will take it back and 

8 discuss it.

9 MR. ADAMS: I would like to talk about that after 

10 lunch. I think that's very important protection for all 

11 students at all institutions and all programs and still gets 

12 to the nature of the GE rule. And the GE rule specifically did 

13 not define a metric. We created these metrics, and we'll 

14 debate the thresholds on these metrics. There's no metrics 

15 defined in the gainful employment statute. So again, this 

16 could be very beneficial to all students in all programs. And 

17 I will tell you, I don't know why this has gotten so 

18 political. I've got two kids about ready to go to college, and 

19 I surely would like to know this information before they would 

20 go. And I bet everyone else on this committee would like to 

21 know that information.

22 MS. JEFFRIES: Brad, thank you for your comments, and 

23 Department has asked for time to look into it. So with that 

24 Kevin, you want to move us along?

25 MR. WAGNER: Just wanted to see if there's any 

26 comments limited to 600.10 or 600.21. We are coming up, 

27 towards the 12 o'clock break. So if there are, I'd ask for 
Committee Meetings - 02/15/22 61

1 them to be brief and if not, then I will turn it back over to 

2 Greg.

3 MR. MARTIN: Thank you, Kevin. Yes. Before the brief 

4 time we have before lunch let's move into 668.402, which is 

5 our definitions. And I want to make a couple of points here in 

6 this section, we have continued, to outline definitions that 

7 are used throughout the subpart and many of these mirror what 

8 was in 2014. But I want to talk a little bit about a few of 

9 the of the changes that we have made here. And the main one 

10 here is the CIP code. We previously used a six-digit CIP code 

11 to identify instructional programs. We are now going to use 

12 the first 4 digits of the CIP code for the purpose of 

13 calculating a debt to earnings rates. This will allow us to 

14 overcome some of the challenges associated with ensuring data 

15 available and releasable while still ensuring the privacy of 

16 student data. It's also consistent with how we currently 

17 classify the fields of study on the college scorecard. So in 

18 looking at the definitions. You can see there where that is 

19 indicated under the classification of instructional program, 

20 CIP code, taxonomy of instructional program classifications 

21 and descriptions developed by the U.S. Department of 

22 Education's National Center for Education statistics and 

23 specific programs offered by institutions are classified using 

24 a 6-digit CIP code. However, for the purpose of this subpart, 

25 the Secretary uses the first 4 digits of the CIP code to 

26 identify gainful employment programs and have comparable 

27 content and objectives. So that's the main change there. 

28 Everything else you see there below have the annual earnings 

29 rate and indicate that the calculation for that is found in 

30 668.404. We also describe the cohort period. This is a 
Committee Meetings - 02/15/22 62

1 carryover from 14, so we can just review this briefly. The 

2 Secretary will use a two-year cohort period to calculate the 

3 debt to earnings rates for a program when the number of 

4 students after exclusions that are identified in 44 E in the 

5 two-year cohort period is 30 or more. The Secretary uses a 

6 four-year cohort period to calculate the debt to earnings 

7 rates when the number of students completing the program in 

8 the two-year cohort period is less than 30, and when the 

9 number of students completing the program in the four-year 

10 cohort period is 30 or more. The cohort period covers 

11 consecutive award years that are described below. So you can 

12 look there for the two-year cohort period. It's the third and 

13 fourth year prior to the award year for which D/E rates are 

14 calculated, with the example given there for you in the reg 

15 and for a program whose students are required to complete a 

16 medical or dental internship or residency. The sixth and 

17 seventh award years prior to the award year for which rates 

18 are calculated. And then we go into a discussion of how those 

19 are, which years are used for the four-year cohort period 

20 under 2. You can see that it's the third, fourth, fifth and 

21 sixth award years prior to the award year for which these 

22 rates are calculated. And then for a program required for 

23 medical or dental internship, it's the sixth, seventh, eighth 

24 and ninth award years prior to the award year for which the 

25 D/E rates are calculated. Moving down into credential level 

26 below that, the level of academic credentials awarded by an 

27 institution to students who complete the program and for the 

28 purpose of this subpart, the undergraduate credential levels 

29 are undergraduate certificate or diploma, associate's degree, 

30 bachelor's degree plus, baccalaureate certificate and graduate 
Committee Meetings - 02/15/22 63

1 credential levels or graduate certificate, including 

2 postgraduate certificate and master's doctoral and first 

3 professional degree. A couple of things to point out here in 

4 some of our other definitions under earnings. I want to point 

5 out and again, most of what you're seeing here is a carryover 

6 from 14, but where we have federal agency with earnings data, 

7 I want to make one clarification here in the brief time before 

8 we go to lunch, we have added a new definition of federal 

9 agency with earnings data. Previously, we established 

10 agreements with multiple federal agencies to obtain these 

11 earnings data. For example, both Treasury and SSA accessed the 

12 same earnings information. HHS maintains discretion in the 

13 national directory of new hires, and the Census Bureau has 

14 established partnerships with some state systems to produce 

15 high quality earnings information. So we proposed to allow the 

16 Department to use the agency with access to earnings 

17 information provided these data are sufficient and to match at 

18 least 90 percent of Title IV graduates, ensuring they provide 

19 high quality and accurate information. So this is giving us a 

20 broader scope, a broader range of agencies from which to 

21 request that data. And it being 12 o'clock, I'll turn it back 

22 over to the facilitators.

23 MR. WAGNER: It is 12 o'clock, this is time for the 

24 break we’ll be breaking from 12 to 1 for lunch. Have a good 

25 lunch and then we'll go ahead and resume back with gainful 

26 employment, back with the definitions as we were just getting 

27 into. So we can take a break and see everyone at one o'clock.

28 MR. MARTIN: Thank you.
Committee Meetings - 02/15/22 64

1 Department of Education, Office of Postsecondary 

2 Education

3 Zoom Chat Transcript

4 Institutional and Programmatic Eligibility Committee

5 Session 2, Day 2, Morning, February 15, 2022

6 From Barmak Nassirian (A) Servicemembers & Vets to

7 Everyone:

8 Dear Colleagues, I am enclosing a link to a legal 

9 memo from the National Student Legal Defense Network (NSLDN) 

10 on two issues related to financial responsibility: First, the 

11 memo addresses the lack of statutory authority for the 

12 practice for renewing provisional PPAs beyond the three-year 

13 statutory cap. The Department has seemingly been doing it for 

14 decades. And it needs to stop. And the regulations need to 

15 change to fix this. Second, the approach that the Department 

16 uses for setting letters of credit is also contrary to what 

17 the statute permits. The Department has historically based 

18 letters of credit on prior year funding, but the statute 

19 requires the sureties to be based on annual potential 

20 liabilities. Those are simply not the same. And the prior year 

21 funding does little to mitigate closed school discharge 

22 losses. I submitted language on this before this round of 

23 discussions.

24 https://drive.google.com/file/d/1JgMqndiilXbnbOYsZei

25 IcPnRlr5VJZEG/view?usp=sharing

26 From Jessica Ranucci (A)- Legal Aid to Everyone:
Committee Meetings - 02/15/22 65

1 Johnson Tyler is coming back to the table for GE for 

2 legal aids

3 From Brady FMCS Facilitator to Everyone:

4 1. Should institutions who cannot report success 

5 rates remain subject to the cap until they can report? 2. 

6 Should all new institution remain subject to the withdrawal 

7 rate? 3. Should states remain in the trial period with 

8 extensions until success rates can be reported?

9 From Sam Veeder (P) FA Administrators to Everyone:

10 David Peterson is coming to the table for GE for 

11 Financial Aid Administrators

12 From Brad Adams (P - Proprietary Institutions) to

13 Everyone:

14 I want to flag that the organization that Barmak 

15 cited in the article in the chat is the same organization that 

16 authored the report that explains the Department can (and 

17 should) apply accountability metrics, such as those in the 

18 gainful employment rule, to all programs at all institutions 

19 under the quality assurance authority. 

20 https://www.defendstudents.org/news/body/docket/100-Day21 Docket-Direct-Loan-Authority.pdf

22 From Ernest Ezeugo (P), Students & Loan Borrowers to

23 Everyone:

24 Thanks, Adam.

25 From Johnson (P) Legal Aid to Everyone:
Committee Meetings - 02/15/22 66

1 can Adam distribute the power point?

2 From Adam Welle, State AGs (P) to Everyone:

3 +1 on the request for the PowerPoint.

4 From Anne Kress (P) Comm Colleges to Everyone:

5 +1 on request — if it could be sent now to 

6 facilitate questions that would be helpful

7 From Jamienne Studley (P) Accrediting agencies to

8 Everyone:

9 Could Adam share his slides, ideally via FMCS to all 

10 of us. And to Adam: it might be helpful to do an additional 

11 version of the final slide by broad fields (cluster for 

12 example by medical; cosmetology/barber; business).

13 From David (A) FA Administrators to Everyone:

14 +1 on ppt request

15 From Anne Kress (P) Comm Colleges to Everyone:

16 +1 Jamie

17 From Carolyn Fast (P) Consumer advocates/Civil 

18 Rights to Everyone:

19 Jaylon Herbin is coming to the table to make a 

20 comment.

21 From Beverly Hogan Primary/MSI to Everyone:

22 +1 to Emmanual's question.
Committee Meetings - 02/15/22 67

1 From Beverly Hogan Primary/MSI to Everyone:

2 What are the implications for the institutions?

3 From Johnson (P) Legal Aid to Everyone:

4 For what it’s worth, most of my clients who attended 

5 for profit institutions that would be affected by GE had 

6 higher earnings in 2020 due to covid relief measures.

7 From Johnson (P) Legal Aid to Everyone:

8 https://hechingerreport.org/how-cosmetology-schools9 mire-students-in-debt/

10 From Jaylon Herbin (A) Consumer and Civil Rights to

11 Everyone:

12 @Adam Looney, would you be willing to run this with 

13 perhaps a couple of different thresholds? Interested to see 

14 how different earnings thresholds impact the scope of the 

15 policy.

16 From Brad Adams (P - Proprietary Institutions) to

17 Everyone:

18 I believe Dr. Looney's statement about the rule not 

19 being retroactive (tied to COVID) is incorrect. It clearly 

20 states in 668.402 of the proposed GE rule that the years the 

21 calculation will include the COVID impacted years.

22 From Ernest Ezeugo (P), Students & Loan Borrowers to

23 Everyone:
Committee Meetings - 02/15/22 68

1 +1 Jaylon's comment, would also be interested in 

2 seeing that.

3 From Johnson (P) Legal Aid to Everyone:

4 This link is to an article related to the expensive 

5 cost of cosmetology schools in Iowa 

6 https://hechingerreport.org/how-cosmetology-schools-mire7 students-in-debt/

8 From Laura Rasar King (A) Accrediting Agencies to

9 Everyone:

10 +1 Anne

11 From Johnson (P) Legal Aid to Everyone:

12 did this paper get distributed earlier on? I don't 

13 recall seeing it.

14 From Beverly Hogan Primary/MSI to Everyone:

15 Yes, it was via email

16 From Adam Looney (Advisor) to Everyone:

17 A couple follow ups: regarding small title 4 

18 programs, I believe the intent is to produce data on the 

19 outcomes of those programs, but not loss of title IV 

20 eligibility

21 From Johnson (P) Legal Aid to Everyone:

22 thx found it!

23 From Adam Looney (Advisor) to Everyone:
Committee Meetings - 02/15/22 69

1 Brad--I think the uncertainty regarding the timing 

2 is about whether the Department will be able to collect data 

3 retroactively from institutions who may not have had a legal 

4 requirement to collect or retain that data (or retain it in a 

5 form necessary to perform these calculations).

6 From Emmanual Guillory (A-PNPs) to Everyone:

7 Adam, that is correct based on my reading of the 

8 proposal; however, small program rates can be used to 

9 determine an institutions PPA, which can be problematic.

10 From Brad Adams (P - Proprietary Institutions) to

11 Everyone:

12 +1 to Marvins question

13 From Beverly Hogan Primary/MSI to Everyone:

14 +1 to Johnson's comment

15 From Beverly Hogan Primary/MSI to Everyone:

16 I am leaving the table. Ashley will join the table 

17 at this time.

18 From Brad Adams (P - Proprietary Institutions) to

19 Everyone:

20 Here is the report reference in the chat.

21 https://www.texaspolicy.com/wp-content/uploads/2022/02/2022-

22 02-NGT-LessonsfromGainfulEmployment-AndrewGillen.pdf

23 From Yael Shavit to Everyone:

24 +1 to Barmak
Committee Meetings - 02/15/22 70

1 From Amanda Martinez (P) Civil Rights to Everyone:

2 +1 Barmak

3 From Laura Rasar King (A) Accrediting Agencies to

4 Everyone:

5 +1 to Barmak

6 From Carolyn Fast (P) Consumer advocates/Civil 

7 Rights to Everyone:

8 +1 to Barmak's comment

9 From Ernest Ezeugo (P), Students & Loan Borrowers to

10 Everyone:

11 +1 Barmak.

12 From Barmak Nassirian (A) Servicemembers & Vets to

13 Everyone:

14 I do agree with Brad that more granular disclosures 

15 about programmatic outcomes at all institutions would be 

16 helpful. The issue is how to deal with the additional 

17 reporting burden on institutions and the Department. Given the 

18 high likelihood that the CTA may be enacted into law, the 

19 Department may well be able to produce more detailed data 

20 without much additional burden for institutions. We can 

21 address the issue when we discuss 668.43

22 From Brad Adams (P - Proprietary Institutions) to 

23 Everyone:

24 +1 Barmak.