Committee Meetings - 01/19/22 

 

 

 DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

INSTITUTIONAL AND PROGRAMMATIC 

ELIGIBILITY COMMITTEE

SESSION 1, DAY 2, AFTERNOON

January 19, 2022

 

 

On the 19th day of January, 2022, the

following meeting was held virtually, from 1:00 p.m.

to 4:30 p.m., before Jamie Young, Shorthand Reporter in

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

1 P R O C E E D I N G S

2 MS. MILLER: Alright, good afternoon, 

3 I hope you had a good lunch. We have a lot to get 

4 through this afternoon. Just some housekeeping, Ashley 

5 Schofield is now in for Beverly Hogan. And David 

6 Peterson is in for Sam Veeder for financial aid. So,

7 they are at the table. Welcome them. And just another 

8 reminder that we have a lot to get through, and if we 

9 can make an effort to not repeat, that's also in the 

10 protocols, and what would be most helpful for the 

11 Department is if you focus on what should or should not 

12 be in, be in the papers. You're always welcome to put 

13 your information in the chat or your proposals in the 

14 chat, then send them to Cindy and she will give them to 

15 the Department for consideration. And finally, there was 

16 a request for a temperature check before we broke for 

17 lunch. So, at this time, we will not be taking a 

18 temperature check on that. And the reason is there's no 

19 regulatory text in that request. And, so, we have to 

20 deny that request at this time. Anything else for 

21 housekeeping before I turn it over to Greg?

22 MR. ADAMS: Yes, ma'am, can I clarify 

23 the temperature check I requested?

24 MS. MILLER: Okay.

25 MR. ADAMS: The Department granted 
Committee Meetings - 01/19/22

1 Anne's request to do a temperature check on whether or 

2 not the committee was comfortable going back to the 2014 

3 GE rules as a baseline. I would like to request a 

4 temperature check on using the 2014 GE rules and apply 

5 it to all institutions by using the Direct Loan 

6 Agreement Quality Assurance Authority in Section 453 of 

7 the Higher Education Act. The Department just allowed 

8 this to go on, and so I believe my request was 

9 consistent with what just took place. Additionally, 

10 there was significant support for the philosophical idea 

11 of using the 2014 GE rule as a baseline. My request is 

12 simply asking whether we should use a different 

13 statutory authority and apply that 2014 gainful 

14 employment rule to all institutions.

15 MS. MILLER: Thank you for that. Greg, 

16 did you want to address that?

17 MR. MARTIN: Yeah, I'll address it and 

18 then I'll see if, I think Steve is still my attorney, 

19 right? If he has anything else he wants to add. The 

20 request for the earlier request for a temperature check 

21 on the on using 2014 as a baseline, you know, was in the 

22 context of regulations that are, that were, that were 

23 promulgated at the time and referred and did 

24 specifically refer to GE. Here we're talking more about 

25 in a sense and here, since there have been and the and 
Committee Meetings - 01/19/22

1 the question was asked in, you know, what metrics should 

2 we impose for for GE? I think we're talking more about 

3 a philosophical statement at this point. Should, the 

4 existing GE, if it's posed this way, should the existing 

5 GE, I'm sorry, the former GE rules from 2014 apply 

6 across the board?

7 MR. ADAMS: [Inaudible] in Section 

8 453, yes. Again-. 

9 MS. JEFFRIES: David.

10 MR. ADAMS: [Inaudible] baseline.

11 MS. JEFFRIES: Adam, Adam, please, let 

12 Greg finish his statement. Thank you.

13 MR. MARTIN: Because we're talking 

14 another thing, too, is that, you know, as it's been 

15 pointed out, that your earlier point about that we would 

16 have to depart from GE in order to do what you suggested 

17 is somewhat at odds with the suggestion that we should 

18 use the 2014 rules to apply to all institutions, since 

19 that is since the statutory authority there is based on 

20 GE and that is solely applicable to programs that 

21 prepare students for gainful employment in a recognized 

22 occupation. So, at this point, we're not amenable to any 

23 more temperature checks regarding that. But I don't know 

24 if Steve has anything to add, but I will give Steve the 

25 opportunity to respond.
Committee Meetings - 01/19/22

1 MR. FINLEY: Just to support what Greg 

2 said, I think that's just outside the scope of the 

3 discussion on this issue. I understand why you would 

4 want to make that point in your introductory comments, 

5 but this is just like a question about the composite 

6 score and financial responsibility that's not going to 

7 be included in the scope of these discussions, and we're 

8 already presented with a very ambitious agenda, you 

9 know, for talking points for the rest of the week.

10 MR. MARTIN: Thank you, Steve.

11 MS. MILLER: I hope that addresses 

12 your question. If you have any more to say, could you 

13 please put it in the chat? We really need to move 

14 forward at this time because it's still on question 

15 number one.

16 MR. ADAMS: And may I just say that 

17 we've, you know, granted temperature checks on 

18 noncodified regulations like misrepresentation and 

19 aggressive recruiting in the last issue paper. This 

20 isn't a philosophical argument. We provided you 

21 statutory language for what we could potentially use. 

22 And the question is using the same general metrics, but 

23 applying it to all institutions, and I'll request one 

24 one final time. But I would really like to do a 

25 temperature check to see what the committee thinks of 
Committee Meetings - 01/19/22

1 this approach as a starting point.

2 MS. JEFFRIES: And let me just address 

3 that. You are free to submit that regulatory text to the 

4 Department for consideration, Brad. The last issue 

5 papers and all issue papers, with the exception of this 

6 one, have regulatory text associated with them, hence 

7 the temperature checks. This one does not. The fact that 

8 there was a temperature check taken on GE regarding the 

9 use of the 2014 reg text as a baseline, again, it had 

10 regulatory text associated with it for the committee to 

11 consider. So please feel free to submit regulatory text 

12 to the Department for their consideration. Those types 

13 of things are helpful and that is what they're looking 

14 for, and they're just trying to get that feedback and 

15 get as much of that text into them so that they can 

16 between sessions go back and draft some regulatory text, 

17 taking all of these ideas into consideration in drafting 

18 that. So, with that, Roz, I'm going to ask you to move 

19 on. I think that we were completed with question one and 

20 ready for question two, if I'm not mistaken.

21 MR. MARTIN: That's correct, Cindy. 

22 What I'd like to do here is to take, you know, you'll 

23 note to question two and question three are somewhat 

24 related. So, I'd like to take them together in the 

25 interest of time, and I think that they're closely 
Committee Meetings - 01/19/22

1 related enough that we can do that. And I would ask 

2 that that the negotiators confine their responses to 

3 addressing the question itself. I know we all that there 

4 are strong feelings about GE in general and 

5 applicability in general, but I'd like to restrict 

6 comments to the to the nature of the questions 

7 themselves. So, question two is how should the 

8 Department address programs with low earnings outcomes, 

9 even when they might already have low median debt 

10 levels? And these would be programs that may have passed 

11 under the 2014 gainful rule. But, because the debt 

12 levels were low, even though the students had relatively 

13 low income or the graduates had low income, they would 

14 have passed. And in conjunction with that, obviously to 

15 do that would require, probably require the use of 

16 additional metrics unless that metric we use by itself, 

17 but so we're asking what are the benefits of using a 

18 combination of metrics versus a single metric and 

19 including whether a program prepares students for

20 gainful employment and a recognized occupation? And the 

21 pros and cons of using these multiple metrics versus a 

22 single metric and just for, you know, a little bit of 

23 historical context. If we go back to 2014 and look at 

24 the metric, the rates metric that we used, it had two 

25 aspects to it. There was a discretionary income rate and 
Committee Meetings - 01/19/22

1 then an annual earnings rate, but they were part of the 

2 same part of the same metric. So, we would be 

3 considering here. This is we're putting it up for 

4 consideration whether or not the Department should look 

5 at other metrics and what should those be. So, I'll 

6 leave it open for discussion at this point.

7 MS. MILLER: Barmak, I see your hand.

8 MR. NASSIRIAN: So, addressing 

9 question number two, I think Adam Looney's suggestion of 

10 having a baseline comparison earnings comparison to high 

11 school graduates is a particularly constructive idea. 

12 And I would suggest that unlike the 2010 GE reg, that 

13 any additional again, we want to preserve the 2014 rule 

14 at the core of what we do here. But any additional 

15 metrics should be additional requirements. They should 

16 be conjunctions, not disjunction. It shouldn't be that 

17 you get to pick which metric you want to pass. It should 

18 be that you should pass all of them because they're 

19 intended as safety nets. This is particularly applicable 

20 to veterans, many of whom end up exhausting their GI 

21 Bill benefits at the institution and then have to take 

22 on additional debt. It is very unfair to simply judge 

23 the performance of that program on the basis of how much 

24 debt they incurred. The fact is they exhausted their GI 

25 Bill benefits, so I think an earnings metric as an 
Committee Meetings - 01/19/22

1 additional requirement to the to the 2014 regs makes a 

2 lot of sense. I want to emphasize the other metrics. We 

3 have to put some things up front to prevent 

4 victimization, only to find out years afterwards that we 

5 made a mistake.

6 MS. MILLER: Okay. Thank you. Johnson.

7 MR. TYLER: Yeah, I just think having 

8 multiple metrics that you're measuring is going to 

9 create, with complexity comes a little more accuracy. 

10 There's just not some bright line that's all up or all 

11 down. And so consequently, having a combination of 

12 factors seems like a more equitable thing, more fair 

13 thing, and more precise thing. And I think the 2014 

14 rules have that in them.

15 MS. MILLER: Okay. Seeing no other 

16 hands. Jamie, I'm sorry, I couldn't see you.

17 MS. STUDLEY: No, it went up toward 

18 the end. Briefly, I wonder if the Department has any 

19 indication of what kinds of programs might be affected. 

20 Some would be programs that where graduates should have 

21 a good income level, but I'd hate to leave us with no 

22 early childhood education teachers or to understand 

23 what the impact would be on fields where the institution 

24 has done its best to keep the debt low. Recognizing that 

25 the field is a relatively low paid one, obviously all of 
Committee Meetings - 01/19/22

1 these can act to misrepresentation and fair promotion 

2 and description to students about what they can expect. 

3 But and I'm not asking for a fancy data request, but I 

4 think to answer that question, it would help to know 

5 what kinds of whether there are entire fields that would 

6 be hard to continue to support and schools are not in a 

7 position to reorient to, this is another one where there 

8 are big social issues involved. We have some fields that 

9 are poorly supported out there in the world. We have 

10 some people who are not paid in equitable ways. Trying 

11 to understand whether these choices would make those 

12 situations better or worse would be important to those 

13 the decisions that we will have to make later in the 

14 process about what additional measures to use and what 

15 consequences we think they might have. So, anything the 

16 Department can do to tell us where that those effects 

17 might lie could help us know when additional measures 

18 would be protective or potentially risky.

19 MR. MARTIN: Thanks, Jamie. We'll take 

20 that back. I'll ask to see what we can provide. So,

21 you're looking for something to do with like how it 

22 would affect, for instance, a profession like early 

23 childhood care like that type of thing?

24 MS. STUDLEY: Yeah, I mean, that was 

25 that was an example that comes to mind where I know that 
Committee Meetings - 01/19/22

1 or at least I believe I know that earnings may not be 

2 strong. And if high school graduates include a wide 

3 range of fields, this one may be called out by a rule. 

4 And I just want us to be able to understand whether 

5 that's something we want to do, need to do, whether 

6 those as often happen with GE, whether it becomes the 

7 responsibility of the programs and the field in general 

8 to reduce costs, reduce debt. This one would not be 

9 debt related, whether we have the ability to have the 

10 institutions adjust to get higher rates or whether we 

11 would have consequences that could be troubling. I see 

12 Anne made a comment that suggested from the community 

13 college perspective, that's something worth 

14 understanding better as we try to make these decisions.

15 MR. MARTIN: I'll take that point 

16 back, I don't know what we have currently as far as any 

17 data that would point to that is. But I will go, I will 

18 certainly find out. Thank you.

19 MS. MILLER: Jamie, if you could put 

20 that in the chat for us. Emmanual, I see your hands is 

21 up.

22 MR. GUILLORY: I just had a question 

23 for the Department and wondering when you say low 

24 earnings outcomes over what time period is that the 2014 

25 rule had a three-year earnings data that began, and I 
Committee Meetings - 01/19/22

1 know for me, three years out, I wasn't making as much as 

2 I am now, obviously, because I've now been working for 

3 13 years since I graduated with my master's. So, I was 

4 curious when we're talking about low earnings outcomes, 

5 is that at a five-year mark, is that at a 10-year mark, 

6 you know, just kind of what's the timeframe there?

7 MR. MARTIN: Well, we haven't 

8 determined that yet. We're still considering what that 

9 ought to be. I think that's a good point you raise that 

10 certainly earnings over a five-year horizon would, if we 

11 look at the five-year horizon at the end of that 

12 earnings, be higher. And of course, the downside to 

13 going with a longer horizon is that it delays the 

14 calculation, obviously, and delays the effectiveness of 

15 it. So, I think there's a lot of things on either side 

16 of that, but we haven't yet proposed a a number of 

17 years.

18 MS. MILLER: Carolyn, and then Anne. 

19 MS. FAST: Yes, I just wanted to echo 

20 Barmak's point that if we were to add a metric on, it 

21 should be an additional metric that institutions would 

22 have to pass rather than sort of an option like either 

23 or like either [inaudible] or because that could 

24 potentially cause some concerns. One of the things that 

25 is nice about the 2014 debt to income ratio metric is 
Committee Meetings - 01/19/22

1 that it also creates an incentive for schools to be 

2 thinking about how they can decrease the debt of 

3 students. And so that's something that I wouldn't want 

4 to be lost in the rule, which could happen if there was 

5 sort of like an option like, well, either satisfy A or 

6 B. On the other hand, I do like the idea. And so that's 

7 so ending the sentence there. I think there should not 

8 be a A or B. It should be A and B if we're going to 

9 layer another metric on top of what already exists in 

10 2014. But that being said, I also would like to say that 

11 I do think that looking at income compared to high 

12 school graduates is a valuable thing to be looking at 

13 because we want to understand, is there value in this 

14 program? And I think that is a good way to determine 

15 that. And I am sensitive to the concerns raised by 

16 others on the committee that certain occupations just 

17 have lower earnings. And that certainly makes sense. But 

18 if, in fact, that there is no gain relative to a high 

19 school student for participating in a program, you do 

20 kind of wonder what is the value of that program? So 

21 certainly that would be, it seems to me, to still be a 

22 valuable metric to be considering.

23 MS. MILLER: I'm going to get this 

24 right one day, sorry. Thank you. Anne.

25 DR. KRESS: So just a couple of points 
Committee Meetings - 01/19/22

1 to go back to Jamie's earlier discussion. I think one of 

2 the challenges and I think to sort of answer one of 

3 Carolyn's questions, what's the value of this program? I 

4 think it's important to recognize that in a number of 

5 these professions, higher ED has no control over the 

6 various licensors and certifications that are required 

7 as a barrier for entry into these professions. Childhood 

8 education is a great example. And, so you know, we 

9 definitely recognize that the wages need to be higher. 

10 But that is not what the marketplace is providing, even 

11 though it's requiring folks to have a certain level of 

12 certification that they can typically only get by 

13 engaging in postsecondary education. So, I mean, there's 

14 a real market mismatch there. The other thing I just 

15 want to go back to is the earnings comparison of a high 

16 school degree to someone getting out of the gainful 

17 employment program. And I just want to caution us that 

18 the devil's always in the details. And so, when you're 

19 looking typically at an average high school graduate’s 

20 wages or earnings annual earnings, you're looking at an 

21 aggregate potentially of years of experience that this 

22 person has accumulated in the marketplace that has 

23 value. Whereas when you're looking at a graduate from a 

24 GE program, it is typically their first wage, not their 

25 wage multiple years out. That's another argument, maybe 
Committee Meetings - 01/19/22

1 for figuring out what's the right apples to apples 

2 comparison here. So, you can really see the delta that's 

3 provided by their participation and postsecondary 

4 education. Those are details that can be worked out as 

5 we go through this, but I just want to flag that for 

6 everyone.

7 MS. MILLER: Thank you, Anne. Okay, 

8 Brad.

9 MR. ADAMS: Thank you. Now, I believe 

10 we should support low-income metrics in combination with 

11 other metrics in evaluating an institution’s program 

12 success versus a single metric or threshold that 

13 suggests a one size fits all approach. It doesn't 

14 account for different standards or different parts of 

15 the country for different types of programs.

16 MS. MILLER: Thank you, Brad. Okay, I 

17 don't see any other hands on this. Are we ready to move 

18 to question three, Greg?

19 MR. MARTIN: We are, I think, actually 

20 on question four because I put two and three together. 

21 So just in talking about, you know, a combination of 

22 metrics which might be necessary if we were going to 

23 look at earnings specifically. So, I move on to question 

24 four, what are the benefits of allowing institutions 

25 multiple consecutive years of failing a metric based on 
Committee Meetings - 01/19/22

1 post-college earnings? What are the risks of allowing 

2 multiple consecutive years? What factors should the 

3 Department consider in specifying how passing and 

4 failing metrics in consecutive years are related to the 

5 trigger of sanctions? I'll open it up.

6 MS. MILLER: Barmak.

7 MR. NASSIRIAN: So, to go back to the 

8 2014 reg and my recollection of that rather painful 

9 experience, post facto, I would characterize the 

10 Department's approach at that time as so overly 

11 cautious, mainly because it had just lost a significant 

12 round in court and hadn't made the political decision to 

13 act decisively. So not only did they really water down 

14 the standards themselves, they then attenuated the 

15 rather sort of weak standards that they did agree on, by 

16 introducing this time element into it. So, the short 

17 answer to the question, obviously, the risks are 

18 entirely on the cohort of students that are plugged into 

19 a program that is given multiple chances, the benefit of 

20 every doubt before a final judgment is rendered about 

21 its inadequate quality. Now you know I can understand 

22 you don't want a sudden death, perhaps, but the idea of 

23 extending it, I think it extended under the 2014 reg to 

24 as long as seven years, which is ridiculous again, 

25 emphasizing that this is a condition of eligibility, not 
Committee Meetings - 01/19/22

1 a post facto sort of weeding out. So, to whatever extent 

2 we can fortify the upfront stuff, a little bit of extra 

3 time on the back end makes sense. But it does require 

4 some significant meaningful metrics on the front end 

5 before programs establish eligibility in the first 

6 place.

7 MS. MILLER: Thank you, Barmak. Brad, 

8 and then Ernest.

9 MR. ADAMS: Thank you. You know, 

10 allowing an institution multiple consecutive years could 

11 help account for abnormal variances and normal market 

12 fluctuations. It would be interesting to do an analysis 

13 on how the COVID-19 pandemic impacted people's ability 

14 to earn an income in 2020. You know, the previous rule 

15 from what I recall was very historical-looking, it was 

16 looking at debt from '08 to '12, depending on how many 

17 people you had in your cohort and then comparing that 

18 debt and call it 2017/2018 to an income in 2016. And it 

19 didn't allow for institutions to make changes, so there 

20 may be deficiencies. So, I think maybe we consider old 

21 institutions accountable if they fail, but maybe still 

22 maintain Title IV eligibility, submit a development or 

23 develop and submit an improvement plan similar to what 

24 we do with accrediting agencies when we have issues so 

25 that would [audio].
Committee Meetings - 01/19/22

1 MS. MILLER: Thank you, Brad. And I 

2 don't know if it's just me, but your sound is coming in 

3 just a little bit muffled. Just wanted to make you aware 

4 of that. Ernest.

5 MR. EZEUGO: Yeah, I would just, kind 

6 of following up on Barmak's comments here, and in many 

7 ways, even in response to some of Brad's comments on 

8 this point, reiterate and kind of take this opportunity 

9 to ask the committee to kind of think about and consider 

10 reframing this, reframing what multiple consecutive 

11 years of failing the metric means here, from a 

12 conversation about numbers to conversation about the 

13 lives of people who are affected. I think it's easy to 

14 and, you know, to have an expression of sympathy towards 

15 [inaudible] points, I think it's easy to consider the 

16 ways in which the numbers may fluctuate over the course 

17 of several years. I think that doesn't change the fact 

18 that, you know, whether it be in kind of in reference to 

19 an event one time, kind of a rare event like this 

20 pandemic, or whether it can just kind of be as a way of 

21 operating and then as a matter of business, each year 

22 that you know, the Department would consider a college 

23 that is failing its students has serious repercussions,

24 for as Barmak mentioned, cohorts of students that go 

25 through a problem, and it's in many ways kind of 
Committee Meetings - 01/19/22

1 unconscionable, unconscionable to think that any number 

2 of years of waiting to see if that changes beyond what 

3 is absolutely necessary and fair would be something that 

4 the Department would consider kind of taking into 

5 consideration here. So again, I just want to really 

6 reframe this conversation around like an understanding 

7 that each year, something like this passes or courts or 

8 students that we are actively failing under the guise of 

9 thinking through, you know, some of these inclinations 

10 of, well, maybe there will be change here or maybe, you 

11 know, we're in a rare event and thinking about the 

12 consequences of that.

13 MS. MILLER: Thank you, Ernest. 

14 Amanda, and then Debbie.

15 MS. AMANDA MARTINEZ: Just trying to 

16 add a different point here, I think students and those 

17 cohorts of students have been waiting for years and 

18 we've seen the impacts of having a longer time period of 

19 really the Education Department not doing anything or 

20 not using its authority or its past authorities to 

21 really regulate in this space what is done. What we have 

22 seen is completely millions of students trying to do 

23 their due diligence and going through the process, and 

24 what do we have? Still, millions of claims of Borrower 

25 Defense claims, you know, still waiting, so we know what 
Committee Meetings - 01/19/22

1 the risks are. The Education Department has seen years 

2 of students being stacked with debt, being trying to 

3 have their claims, finally be waiting for their claims 

4 to finally be administered of the wrongs they've been 

5 done. So really, any risks of trying to extend a time 

6 period, I think there's a reasonable time period, but 

7 any, you know, longer time period or is really going to 

8 end up in this current reality that we are in, in which 

9 students are just going to be stacked with debt for the 

10 rest of their lives. They're going to be, they've been 

11 waiting for the Education Department to actually protect 

12 them. And really, the Education Department has really 

13 not done that and has really been on the side of 

14 institutions in this matter. So, the risks are extremely 

15 high. And I hope that that point is extremely clear 

16 today. There's evidence to back that up and students are 

17 continuously being mistreated currently and are only, 

18 you know, their future does not look any type of, even 

19 given the additional economic crisis that we're in 

20 today. So, the Education Department should really take 

21 those risks at hand. And I just want to make sure 

22 they're hearing that.

23 MS. MILLER: Thank you, Amanda. 

24 Debbie.

25 MS. COCHRANE: Yeah, this seems to be 
Committee Meetings - 01/19/22

1 an area, I know there are probably many, where some 

2 analysis might be very helpful in informing what the 

3 timeline should be. Certainly, you don't want to delay 

4 consequences for programs that we know are failing the 

5 standards that are set out, but also, you know, 

6 anomalies do happen and occasional shifts happen. And 

7 so, I think it would be very helpful to actually see an 

8 analysis of the constancy of earnings in particular, as 

9 well as that from programs from program graduates or 

10 whatever the whatever the metrics are moving forward and 

11 just looking at the level of stability. I think that 

12 would help inform what the right time period is. And I 

13 know the prior rules had a phase-in period where to kind 

14 of get at some of those issues related to kind of using 

15 older data comparing to new data. My hope and assumption 

16 at this point would be that nothing like that is needed 

17 at this time just because I know you know institutions 

18 and programs did make changes in response to that rule. 

19 And the story goes that those changes have stuck. So, I 

20 think if that is true, then we wouldn't need a phase-in 

21 program. But I thought that was a relevant precedent to 

22 point out.

23 MS. MILLER: Thank you, Debbie. 

24 Emmanual.

25 MR. GUILLORY: I just want to quickly 
Committee Meetings - 01/19/22

1 add that I think that the 2014 rule is fair in the 

2 three-year window where you if you fail two out of three 

3 consecutive years, then you lose Title IV eligibility 

4 for the following three calendar years, which is a 

5 little bit more stronger than the cohort default rate 

6 process, where it's three years for the three-year 

7 cohort default rates. If you are above 30, then you lose 

8 eligibility for the next two fiscal years. So, I just 

9 wanted to reiterate the 2014 rule I think does set a 

10 pretty decent timeframe.

11 MS. MILLER: If you'd like to put that 

12 in the chat, please feel free to do so. The same goes 

13 for you, Debbie. Are there other hands? I don't see any 

14 other hands, so I think we can move to question number 

15 five.

16 MR. MARTIN: Okay, we're going to move 

17 to question number five. Before we do, I just want to 

18 point out as a reference for people that if because so 

19 many of you have brought up the 2014 rule and elements 

20 of it, of course, you could go back and reread the whole 

21 rule. But I will point out that there was an excellent 

22 Dear Colleague done on this. I will remain silent as to 

23 the authorship of that letter that came out in 2015. And 

24 in all fairness, it does, whether it's excellent or not, 

25 is a question for all of you to answer. But it's 15-12 
Committee Meetings - 01/19/22

1 [inaudible] 15-12, so you can get that on our Partner 

2 Connect formally IFAP website, either will work. If you 

3 pull up 15-12, it will walk you through the elements of 

4 the of the ‘14 rule. So, I think if you, for anybody 

5 that doesn't have a background in it, I find it even 

6 helpful now to go back and review things as opposed to 

7 looking at the rule. It's a very compact and I think a 

8 fairly decent overview, so I just point that out. If 

9 people are looking for a reference, well, that was where 

10 the consequences of, you know, the two out of three 

11 years or something if you want to find the reference for 

12 that. Again, that's [inaudible] 15-12. Alright. Moving 

13 on to question five, how should the Department balance 

14 the burden of institutional reporting requirements with 

15 collecting data as detailed as was required under the 

16 2014 gainful employment metric? We have a couple of 

17 examples there. For instance, the cap on median debt at 

18 tuition fees, books and supplies of the student required 

19 institutions to report that figure for each student. 

20 What was the benefit of the inclusion of that cap? We 

21 also asked a reference to the inclusion of institutional 

22 and private debt required institutions to report 

23 additional debt amounts for each student. That would be 

24 that we don't have on NSLDS. What was the benefit of 

25 including those types of loan debt? If the Department 
Committee Meetings - 01/19/22

1 did not include the additional reporting of 

2 institutional and private loan debt, might institutions 

3 have an incentive to increase nonfederal borrowing? And 

4 how might the Department mitigate such concerns? So just 

5 a little bit of context here that we're in looking at 

6 the 2014 rule. For those of you who are reasonably 

7 familiar with it, you know that there was a great deal 

8 of institutional reporting required that was necessary 

9 to calculate the rates. These, this question keys to a 

10 possibility for the Department to maybe move in the 

11 direction of more of an administrative calculation with 

12 information or data we already have and the program 

13 level data we now have on NSLDS is much more robust than 

14 what we had when the previous rule was negotiated. So,

15 we do have some capabilities we didn't have at the time,

16 but these questions are referencing items which we which 

17 we currently don't have the ability to capture, such as 

18 the, you know, to do the cap on median debt and tuition 

19 fees, books and supplies. We'd have to have those 

20 figures for each school, which previously were provided 

21 under the reporting protocols. Likewise, we included 

22 institutional debt, private loan debt as well, and we 

23 had to have schools report that to us via, it was 

24 through NSLDS, but not the normal NSLDS reporting 

25 mechanism. So, we're just asking that question within 
Committee Meetings - 01/19/22

1 the context of if, you know there's administrative ease, 

2 simplicity versus some things you might lose in going in 

3 that direction if that burden were to be eased, so we 

4 are just asking for input as to how we might balance 

5 those things off.

6 MS. MILLER: Thank you, Greg. Okay, 

7 Brad.

8 MR. ADAMS: And before going into A, 

9 B, or C, I would like to request the Department that if 

10 we could automate as much of the processes as possible, 

11 that would be greatly appreciated. I remember going 

12 through the process back in 2016 and getting the first 

13 the spreadsheet of completers and then having a process 

14 to appeal if there were inaccuracies. And then three or 

15 four months later, we got the list of debt tied to those 

16 completers and there was a process to appeal. All of 

17 this was via Excel spreadsheets, by the way. And then 

18 the third step in the process was then getting the 

19 salary information that came from the Social Security 

20 Administration. And all that being said, that, you know, 

21 there was good merit in intent, I believe with the 

22 calculation. But the way it was rolled out was very 

23 burdensome on institutions. It did require a lot of 

24 hours and a lot of money to comply, and I just would 

25 like to look at any way possible of automating as much 
Committee Meetings - 01/19/22

1 as possible. I think [inaudible] had several articles. 

2 It would be interesting to hear from them what their 

3 thoughts are on this, but they've had several articles 

4 about some of the issues that were that occurred back in 

5 that timeframe. So that would just be a general comment 

6 to automate the extent possible. It was a lot of work on 

7 Excel, the previous time.

8 MS. MILLER: Okay. Marvin, I see your 

9 hand up and Yael, I also see your hand up, I just want 

10 to make sure that I'm addressing a request that was in 

11 the chat from Jamie to further explain the figure. How 

12 detailed was the reporting debt to person or debt to 

13 student using the definition or something more? And 

14 Jamie, if you'd like to clarify what you meant in that 

15 take, take a few seconds to do so.

16 MS. STUDLEY: It's really both Greg 

17 and Brad and possibly others may have some experience. 

18 We don't have to make the final judgment today, but just 

19 trying to understand whether median debt, which seems 

20 essential to the calculation, is really hard to do. At 

21 first, I read it wondering whether the school had to 

22 total out books and supplies, and I was prepared to say, 

23 oh, well, maybe that's not needed, but I know that if 

24 you don't have that, you have behaviors that can go, to 

25 avoid the rule, you can have behaviors in raising fees 
Committee Meetings - 01/19/22

1 if they're not reportable to avoid having it in a 

2 tuition number. So, I understand why the Department 

3 needs a total debt per student or a total debt for the 

4 cohort. But I'm just wondering why it's hard? Does it

5 have to be done just for this? Because it does seem like 

6 a necessary element to be required.

7 MR. MARTIN: Well, I wouldn't say, you 

8 know. It's hard for the Department to calculate. There 

9 was a burden on the Department, obviously, as there was 

10 on schools with doing the calculations and receiving the 

11 information from institutions. The cap on median debt, 

12 tuition, fees, books, supplies. I'm going back and 

13 trying to remember the rule. The institutions were 

14 required to report the actual figures for student 

15 tuition and fees. Books and supplies, they just had to 

16 report the allowance because it would have been too 

17 complicated to have that for each student. I think that 

18 was how the old rule was set up. The question here is if 

19 we went to an audit, it's like asking if you go to an 

20 automated system of doing it, it might not be possible. 

21 Well, we can't capture this information with what we 

22 currently have in NSLDS or COD, which are two primary 

23 systems, right? So, I mean, does this cap benefit 

24 schools because we're looking at when you're looking at 

25 the debt where we're capping that debt, at the amount of 
Committee Meetings - 01/19/22

1 tuition fees, books and supplies, which in many cases, 

2 the debt goes beyond that because students borrowed for 

3 things other than those costs, right? So that was a 

4 benefit to the schools as far as the calculation goes. 

5 But this is just recognizing that in automating 

6 something you might not be able to get that. So, we're 

7 asking you know, what was the benefit of that cap I just 

8 gave you? Just kind of gave that answer away, pretty 

9 much. But so, I think there is a question on either 

10 side, what do you give here to get simplicity, to get to 

11 automation, especially with the Department's current 

12 capacity to obtain information? Is it, you know, if you 

13 do the calculation without that cap, what would be the 

14 outcome of that? Or would that be something people would 

15 be willing to have in exchange for simplicity? Now, it 

16 might be in the future, the Department can develop 

17 mechanisms to get the information necessary to do this 

18 through existing systems, but those systems would have 

19 to be modified and that certainly would not be able to 

20 occur overnight, or probably not even at the point where 

21 these regulations would become effective.

22 MS. MILLER: Marvin.

23 MR. SMITH: I'm really glad you're 

24 asking the question, because I do think the burden of 

25 institutional reporting has dissuaded public 
Committee Meetings - 01/19/22

1 institutions from even entering this field, and even if 

2 they are providing short-term certificate programs, 

3 they're not going through the steps of making low-income 

4 students eligible. And so, I agree with Brad that the 

5 burden is enormous on schools and the public 

6 institutions are just not even going through the 

7 process. And I think that ultimately hurts low-income 

8 students who aren't eligible for aid at certificate 

9 programs at the publics. So, I am very interested in, 

10 you know, Adam, I think, just put something in the chat 

11 about this automation options and maybe we lose some,

12 you know, very specific numbers, but do general numbers 

13 do the same thing and is that feasible? And so, I'm 

14 interested in Adam's perspective, but I'm just making 

15 the observation that the burdensome requirements, I 

16 think, are ultimately hurting low-income student access 

17 to certificate programs at large publics.

18 MS. MILLER: Thank you for that. Okay, 

19 Yael, I think you were next.

20 MS. SHAVIT: Thanks. I just wanted to 

21 quickly make a couple of comments on points B and C just 

22 to state that we feel strongly that reporting of private 

23 and institutional debt is critical. Our interactions 

24 with students and many investigations just regularly 

25 demonstrate that private and institutional debt loads 
Committee Meetings - 01/19/22

1 are main contributors to federal loan default. I've 

2 personally spoken with many students who have felt 

3 unable to make IDR payments because of the weight of the 

4 private loans that they also had to repay. So that's one 

5 point and also, you know, institutional debt has been a 

6 big and recurrent problem that we've seen consistently 

7 and I share, I shouldn't say share, but to respond to C, 

8 yes, I think failure to require disclosures of private 

9 loan debt and institutional debt create a serious 

10 incentive for institutions to push private loans.

11 MS. MILLER: Thank you, Yael. And I 

12 see everyone in the queue, but I wonder if this is a

13 good point to call on the advisor, Dave McClintock. I 

14 see some nods. Dave, please. 

15 MR. MCCLINTOCK: Yeah, thank you. I 

16 just wanted to share. You know, obviously, working with 

17 a lot of the financial aid departments that bore the 

18 brunt of this as you put together the metrics, it's 

19 important to understand what schools are already 

20 tracking and the information that they have available. I 

21 think that's what created a lot of the difficulty before 

22 you're using a student information system. And if the 

23 data wasn't recorded in a way that is easily exportable, 

24 that's what created a lot of the additional work for the 

25 Departments. Now I realize that not every school records 
Committee Meetings - 01/19/22

1 things identically. But if you can find common 

2 information that would be expected, I think it would

3 alleviate just some of the difficulties that schools had 

4 in addressing it and submitting the information to the 

5 Department.

6 MS. MILLER: Thank you, Dave. Okay. 

7 Barmak was next.

8 MR. NASSIRIAN: With regard to 

9 complexity, and Lord knows the 2014 reg was quite

10 complicated and did in fact require collection of 

11 significant new data elements that institutions did not 

12 previously track. You know, the fact that an institution 

13 doesn't track something already should not preclude us 

14 from requiring that if it's needed, but it's also 

15 important to recall that a lot of the complexity was the 

16 work of institutions themselves, which sought safeguards 

17 and safe harbors and additional bites of the apple. So,

18 to the extent that some of the mandatory requirements of 

19 2014 say, subsection A, the cap on tuition fees, books 

20 and supplies, was intended as a safe harbor for 

21 institutions to mitigate the amount of median debt that 

22 would be recorded, you could make it. You could make 

23 that discretionary. Just like challenging the average 

24 income through surveys was discretionary. The Department 

25 didn't mandate that you do that. If you wanted to 
Committee Meetings - 01/19/22

1 challenge the reported income, you could. You could 

2 organize a survey based on the parameters that the 

3 Department published. So, some of these can be made 

4 discretionary, and I think the vast majority of 

5 institutions wouldn't have to worry about them. But I 

6 agree with Yael's point that the one thing you cannot 

7 make discretionary is any amount of additional outside 

8 financing, much of it at very high rates without the 

9 protections of Federal Student Aid, that institutions 

10 could then be incentivized to package their students 

11 with. So, I think there may be some room for 

12 simplification and making some things a choice for 

13 institutions, but some of these are unfortunately 

14 required.

15 MS. MILLER: Thank you, Barmak. 

16 Johnson.

17 MR. TYLER: And I'll be very brief. I 

18 have many cases where students are being sued in state 

19 court on private debt on institutional debt. It's a real 

20 problem. It affects people's lives hugely. It needs to 

21 be accounted for in a metric. So [inaudible].

22 MS. MILLER: Thank you, Johnson. 

23 Debbie.

24 MS. COCHRANE: I, too, will be pretty 

25 brief on A. My understanding and my recollection of the 
Committee Meetings - 01/19/22

1 prior rules was that the reporting to institute a cap 

2 was actually voluntary and it would seem like the kind 

3 of thing that the Department might be able to do some 

4 analysis on what who reported, what was the impact in 

5 terms of the actual metrics and outcomes on that. So 

6 that would be helpful to see. I did put that in the

7 chart as well. And then just to echo the point on 

8 private institutional loans, I just did some quick 

9 looking at some numbers and you know back when the 

10 Department first began, all the GE negotiations in 2009-

11 10 private loans or nonfederal loans were 7 percent of 

12 loan volume in a given year, and in 2019, 2019-20 it was 

13 14. So, the share of debt that was private and 

14 institutional debt doubled in the time period that the 

15 Department's been negotiating GE, so really underscore 

16 the inclusion of those figures.

17 MS. MILLER: Thank you, Debbie. Next, 

18 we have David from the FA administrators.

19 DAVID: Yeah, I just wanted to take 

20 the opportunity to speak a little bit to some of the 

21 things that have already been said, specifically some of 

22 the burdens that we in the financial aid community 

23 experience and trying to implement GE has, I truly do 

24 believe, has impacted access to some of these programs 

25 at our institutions. And so, I really strongly encourage 
Committee Meetings - 01/19/22

1 all of us to consider that. The goal of all of the 

2 financial aid programs has always been access in my 

3 mind, and I don't want to lose out on that because of 

4 some burdensome regulations. Having said that, one thing 

5 I would encourage us all to do is really take advantage. 

6 There's a lot of data that institutions have to provide, 

7 whether it be in IPEDS, whether it be state, state ready 

8 [phonetic] formats. Let's try to think about things that 

9 we can do to take advantage of existing systems for this 

10 information and more importantly, whatever we come up 

11 with today in this neg reg, whatever we come up with, we 

12 have to be consistent. I think the biggest challenges 

13 for schools is, okay, we're looking at this data today 

14 and now, two years from now, we're looking at a whole 

15 another set of data. We have to really maintain some 

16 consistency to make it important or to make it valuable 

17 to both us as people who are protecting the federal 

18 dollars, but also make it important to students in 

19 helping them making choices based on this information. 

20 So that's all I had to add. Thank you.

21 MS. MILLER: Thank you, David. Brad.

22 MR. ADAMS: Thank you. On two, on 

23 point A in terms of the cap, kind of alluding to what 

24 Greg mentioned, if it's not capped and includes cost of 

25 living, that's going to be difficult for institutions to 
Committee Meetings - 01/19/22

1 comply with. As you know, we are not allowed to limit 

2 the amount of funds the student borrows to cover just 

3 tuition fees, and I would call it required materials 

4 versus just general supplies. Sometimes students buy 

5 things that aren't required, but I would be comfortable 

6 adding in the required comment to fees and books again. 

7 What's the real cost of obtaining that degree? In terms, 

8 but in terms of folks that end up on the higher stipend 

9 side, it's the folks getting the larger Pell Grants 

10 typically, if they choose to borrow their full Federal 

11 limits within direct loan programs, and it's the grad 

12 PLUS loan that's not capped, it's just subject to cost 

13 of attendance. So those are where your largest stipend 

14 balances occur. In terms of point B, you know, I'm 

15 curious on the Department. And this is maybe a question 

16 for Greg, I'm not sure, does the Department have access 

17 to private loan servicing systems? I believe that was 

18 the issue with it in the prior rule, and I just don't 

19 know enough about that piece of it, but I do think there 

20 may be just in terms of the access to the data on point 

21 B from a partisan point of view, I'm not sure what the 

22 Department would have access to that.

23 MR. MARTIN: Well, what we have access 

24 to is what's in NSLDS, which is only Title IV loan debt. 

25 We don't have and the reason we had to have schools 
Committee Meetings - 01/19/22

1 supply that information to us under the reporting 

2 requirements is that we don't have access to 

3 institutional debt or private debt. We have no mechanism 

4 for obtaining that other than to have it reported to us 

5 by institutions. The only way we could do that would be 

6 through protocols such as similar to what we used in 

7 2014 or the other option would be to include some way to 

8 have that reported under the normal reporting protocols 

9 currently perhaps in what's in NSLDS. You know, what the 

10 usual reporting is in NSLDS. Again, that would take 

11 systems changes. I don't want to for a moment suggest 

12 that could be done quickly or I don't even know the 

13 extent to which it could be done. We could look into 

14 doing it. That's all I could say. But the reality is 

15 currently we would have no other mechanism to collect 

16 institutional debt or private debt other than to have 

17 the schools separately report that to us. So that's why 

18 we did it in that way in 2014, and that hasn't changed. 

19 And while I'm on the topic of institutional and private 

20 loan debt, I know Debbie, you gave us some statistics 

21 and we'd be interested in knowing your sources for that. 

22 If you could give those to us in the chat, please. We'd 

23 be very grateful for that.

24 MS. COCHRANE: I'll send it now.

25 MS. MILLER: Thank you. Johnson.
Committee Meetings - 01/19/22

1 MR. TYLER: You know, just to talk 

2 about the burden of reporting on the private student 

3 loan debt, having defended a lot of these cases, the 

4 process involves a school verifying the person is there 

5 and eligible for a student loan, otherwise you don't get 

6 bankruptcy protection. So, I think the schools just need 

7 to create a field where every time they get pinged by a 

8 bank, if offering a loan, that they record that amount 

9 and have it in their database so they can report it.

10 MS. MILLER: Okay. Thank you, Johnson. 

11 I don't see any more hands. Does Greg, does the 

12 Department have what they need on this question?

13 MR. MARTIN: Yeah, I think so, it was 

14 a good discussion, I heard a lot of interesting points 

15 of view there, so thank you very much.

16 MS. MILLER: Can we feel free to move 

17 on to the next?

18 MR. MARTIN: Yes, I think so. We'll 

19 move on to question six. And this one is how should the 

20 Department address the presence of income that is 

21 unreported to IRS? This is essentially a tipped income. 

22 We did it before by if you'll recall the ‘14 rules, we 

23 had a survey of a state process schools could use or 

24 most schools use a [inaudible] state, state earning 

25 system appeal or schools could use a [inaudible] earning 
Committee Meetings - 01/19/22

1 survey appeal that we had built into the regulations, 

2 whereby they could survey graduates to determine what 

3 their what their earnings were if they believed those 

4 earnings were above what was reported to the IRS. So,

5 we're asking here, how should we address that in 

6 upcoming regulations? That that whole idea of there 

7 being some fields where tipped income might be 

8 significant and might not be recorded.

9 MS. MILLER: Barmak.

10 MR. NASSIRIAN: I have always found 

11 this one of the most ridiculous topics to discuss in a 

12 federal proceeding. How do we accommodate tax cheats? 

13 People who don't want to, I mean, this just blows my 

14 mind that we are actually sitting here attempting to 

15 write regs to accommodate unreported income with a 

16 straight face. Having said that, look, we have the 

17 language we have in the 2014 reg. I tend to see this 

18 candidly as a red herring, increasingly because people 

19 use credit cards. Very few people leave cash tips 

20 anymore. So, I don't know how real this issue is, but 

21 they've made the mountain out of a molehill, and I 

22 wouldn't address it beyond what the 2014 reg already 

23 does.

24 MS. MILLER: Thank you, Barmak. Brad, 

25 you're up next.
Committee Meetings - 01/19/22

1 MR. ADAMS: Thank you. You know, I 

2 know we've been trading some chats back and forth, 

3 Emmanual and I with Adam, you know some of the things I 

4 would like to Department to consider when it comes to 

5 looking at the difference of five years versus three 

6 years post-graduation. In addition to that, I would like 

7 to look at whether or not an average annual salary 

8 should be used over a period of time instead of a 

9 singular year, just to take out any potential impacts. 

10 Could be anything from, you know, unpaid FMLA to 

11 unforeseen national regional economic downturns like we 

12 are just experiencing in COVID. I think when you tie it 

13 all to one calendar year, one singular event within a 

14 cohort of folks, especially for healthcare programs, you 

15 know, I think that can be problematic at times. In terms 

16 of the untipped income, colleges obviously can't control 

17 whether or not students report their tipped income. I 

18 agree with Barmak that that's unfortunate and I think 

19 that's why now they're looking at, the IRS is looking at 

20 Venmo and other payment apps as another mechanism of the 

21 way people get around reporting income. That's not for 

22 me or us to decide on this committee, but it is a 

23 problem and it's not a problem the schools can control, 

24 unfortunately. My thoughts. Thank you.

25 MS. MILLER: Thank you, Brad. Johnson.
Committee Meetings - 01/19/22

1 MR. TYLER: Yeah. I mean, I think it's 

2 a problem for people to remain in the gray economy 

3 because it keeps them out of the middle class. I had a 

4 successful hairdresser who had a very unaffordable 

5 mortgage that he took out because he couldn't document 

6 his income and he became a victim of another scam. And 

7 he couldn't get a modification because he did not have 

8 any tax returns that made any sense, and yet he had a 

9 lot of income. I think we need to support people being 

10 in the real economy because that is how you get 

11 financial stability in America.

12 MS. MILLER: Thank you, Johnson. Okay. 

13 I don't see any other hands.

14 MR. ADAMS: I'm curious if Johnson 

15 would have any thoughts around how [inaudible] get 

16 around that comment on, just curious on picking his 

17 brain on what we as institutions can do to ensure that 

18 folks are paying are filling out the IRS forms 

19 accurately. Just thoughts. 

20 MR. TYLER: I mean, just, you know, 

21 some financial counseling, which is always important. I 

22 did notice, helping my daughter with and my son with 

23 their tax returns, they got tip income reported on their 

24 W-2 from the restaurants they were working at. So, it 

25 seems like there is a lot more automation in these 
Committee Meetings - 01/19/22

1 areas.

2 MS. MILLER: Greg, I don't see any

3 more hands, so are we ready to move on?

4 MR. MARTIN: I think so. Thank you, 

5 everybody, for your comments on that last question. Our 

6 next question is question seven, how should the 

7 Department address programs that are too small or just 

8 have too few students completing the program in a given 

9 year to have their program, debt, or earnings 

10 information disclosed?

11 MS. MILLER: Barmak.

12 MR. NASSIRIAN: Well, the 2014 reg, as 

13 you know, kind of rolled them over until they reached an 

14 adequate end count for purposes of protecting anonymity 

15 with regard to SSA disclosures. That's pretty lousy 

16 statistical practice, one would argue, but that's the 

17 best know anybody could come up with given the singular 

18 reliance on income and discretionary income as metrics. 

19 Again, I believe we ought to preserve that, but there 

20 may be alternatives, for example, you could look at, 

21 people keep talking about the unit record system. The 

22 Department of Education already has the unit record 

23 system in the loan repayment system that FSA runs. You 

24 could always have additional standards that the meeting 

25 of which could satisfy the rule for institutions that 
Committee Meetings - 01/19/22

1 didn't have enough enrollments to go through the regular 

2 rule with no repayment rate.

3 MS. MILLER: Thank you. Johnson.

4 MR. TYLER: Yeah, I don't really have 

5 an answer to this question other than I, I became very 

6 aware of it in the key rulemaking because if the people 

7 drop out, then you're not going to get program 

8 completers and then you're going to get a number that's 

9 below’ I think the magic number was 30, but I don't 

10 remember, of completers. And I think that's really 

11 problematic if a lot of people aren't completing and 

12 then you can't generate the statistics. So, I guess I'm 

13 just saying, you know, to the extent that's a problem, I 

14 think you also should be looking at non-completers and 

15 see if that's a large number. And then maybe, you know, 

16 somehow take that into account.

17 MS. MILLER: Thank you. Brad.

18 MR. ADAMS: Yes, I would I think it'd 

19 be helpful. I'd like to ask the Department, I can put 

20 this in an email to Cindy as well, if they could provide 

21 program level enrollment data at the four to six digit 

22 CIP levels for all gainful employment programs. So, we 

23 see how many institutions and programs would be captured 

24 and would be excluded based on an ‘N’ size. I think it's 

25 tough to discuss whether or not 30 is the right number, 
Committee Meetings - 01/19/22

1 10, I'm not sure, you know, 50, whatever that may be. 

2 But, you know, in order to encapsulate 80 percent or so 

3 of the problem, or I should say problem, about 80 

4 percent of the programs based on some ‘N’ size as a cut 

5 off, I think, would be very helpful for all of us 

6 because I don't know if any of us have the right number 

7 to say we should exclude X under this level.

8 MS. MILLER: Okay, thank you, Brad, 

9 and please put that in the chat [inaudible]. Barmak.

10 MR. NASSIRIAN: The ‘N’ size was not a

11 politically negotiated number; that was a statistically 

12 rigorous number that the Department presented to the to 

13 the committee back then. So, I don't have a problem with 

14 the number 30. My real problem is that if you have 

15 programs that are too small, the attempt to aggregate 

16 multiple cohorts over potentially multiple years could 

17 really prolong the process of post facto judgment, which 

18 is the construct that the 2014 relied on. But I don't 

19 think that we should just look at. I don't think 

20 administrative convenience should be the driver of where 

21 you draw the line. It should be a statistical, it should 

22 be statistical rigor to ensure that whatever number we 

23 do use or the Department does use is statistically 

24 significant. And I believe 30 was very robustly debated 

25 and presented to us as a credible number.
Committee Meetings - 01/19/22

1 MS. MILLER: Thank you. Jamie.

2 MS. STUDLEY: Mine is a general point 

3 on the broad question. In the in the interest of 

4 focusing on where the real risks are, I think it could 

5 be possible to you know at the margin, to look to not 

6 look at very small programs and to look at larger ones, 

7 but the enormous problem is that the responses to that 

8 could include just splitting programs into subcategories 

9 to avoid the rule. So, I think the more important, 

10 another way to come at the question would be, is there a 

11 way to be sure that that the rule covers a sufficient 

12 proportion of the total students at that institution? 

13 And if you could block off the avenue of distortion of 

14 creating tiny programs to avoid the rule, then I think 

15 you could be sympathetic to the fact that very small 

16 programs may have a, you know, it may be hard to get 

17 meaningful numbers in an ‘N’ size that is revealing. 

18 That's not an answer. It's either an additional 

19 complication or a way to understand what the real 

20 mischief is that we'd be trying to get at in being 

21 sympathetic to not looking at programs that are too 

22 small. So, I just ask the Department to think, how can 

23 we get at the universe that would need to be covered to 

24 protect the body of students? And are we looking at the 

25 right question, whether it's is it program size or total 
Committee Meetings - 01/19/22

1 coverage at the institution? I realize the reporting is 

2 by program.

3 MS. MILLER: Thank you, Jamie. I don't 

4 see any other hands. We are catching up. Greg, can we 

5 move on?

6 MR. MARTIN: Yes. So, we're going to 

7 move to a question number eight. So, we're asking here 

8 what metrics are most important to be disclosed to 

9 prospective or enrolled students? What are the best 

10 formats for these disclosures? So, as you'll recall, the 

11 2014 rules, how the number of disclosures institutions 

12 were required to make to students, and we're pretty 

13 prescriptive about how that had to be done. So, we're 

14 asking here what you think are the most important items 

15 to be disclosed and how should that be accomplished?

16 MS. MILLER: Barmak.

17 MR. NASSIRIAN: So, as a general 

18 proposition, the Department has historically 

19 overemphasized the dual roles of a regulator that 

20 consist of disclosure and prudential oversight. The 

21 Department has sort of shirked its responsibility with 

22 regard to oversight by overreliance on disclosures, in 

23 my humble opinion, which this is sort of the way I 

24 describe it, as it would do very little good. Were there 

25 to be toxic material on the shelves at the supermarket 
Committee Meetings - 01/19/22

1 with disclosures under them that consuming them can kill 

2 you, we don't want toxic things on the shelves in the 

3 first place. So, to whatever extent the Department can 

4 again do enough gatekeeping in general, but more 

5 specifically with regard to GE, to ensure that the 

6 programs at least provide some minimum level of 

7 assurance of wholesomeness, then some additional 

8 disclosures may be helpful. In general, I’ve got to tell 

9 you, we do so many disclosures to students that they 

10 have ceased to have any impact. And the more you add, 

11 the less impact any one of them will have because 

12 they'll get lost in the shuffle. I do think that it's 

13 the public disclosures are meaningful for broader 

14 purposes, which is to say, for outside parties to 

15 understand the behavior of some institutions, maybe in 

16 ways that the Department itself doesn't have adequate 

17 resources to focus on. So, some disclosures are 

18 appropriate. But I would not rely on disclosures as a 

19 replacement for the Department doing its job of 

20 safeguarding students because the students can't 

21 safeguard themselves. They are not. You know, this is 

22 not like eating out where you eat multiple times and you 

23 kind of know which restaurant is consistently bad. 

24 People go through these experiences only once, and we 

25 have made it real easy for them to be to be defrauded, 
Committee Meetings - 01/19/22

1 that one shot that they have, and then they're ruined 

2 for life. So, some disclosures are appropriate. I would 

3 not rely on them.

4 MS. MILLER: [Inaudible] so well. 

5 Thank you, Barmak. Johnson.

6 MR. TYLER: Yeah, Barmak said it very 

7 well, I just would say there's lots of social science 

8 evidence out there about disclosures not being paid 

9 attention to and saturation and stuff like that. There 

10 really are no substitutes for, you know, avoiding the 

11 product in the first place by not having it on the 

12 market.

13 MS. MILLER: Thank you. Carolyn.

14 MS. FAST: I agree that disclosures 

15 cannot solve the problem and should not be relied upon 

16 here. That being said, I do think there could be some 

17 usefulness in including a provision that looks toward 

18 giving students the opportunity to get really crucial 

19 information and potentially use it to compare 

20 potentially between schools. So, that means that we 

21 would want you looking for something that was very 

22 uniform and would provide an opportunity to do some 

23 comparison to students.

24 MS. MILLER: Thank you, Carolyn. Yael. 

25 MS. SHAVIT: Sorry. I agree with 
Committee Meetings - 01/19/22

1 everyone saying that disclosures can't take the place of 

2 meaningful regulations. That's of course, the case in 

3 the gatekeeping function is the most important, but 

4 meaningful disclosures are important as well, and I 

5 think those disclosures need to be mandated and not 

6 discretionary. And take form that is readily comparable 

7 for students and easily understood. And again, I think 

8 with the important caveat that a disclosure doesn't 

9 solve the problem, but providing students with complete 

10 and meaningful information, is critical as well.

11 MS. MILLER: Thank you so much. And 

12 thank you to the negotiators, I really appreciate us 

13 sticking to the protocol and giving the Department what 

14 it needs. So, that's great. Amanda.

15 MS. AMANDA MARTINEZ: I also just 

16 wanted to give some information related to Barmak's and 

17 Johnson's kind of take on that. If the Education

18 Department is trying to solve a problem of ensuring 

19 quality of education, I don't think that disclosures 

20 have been found to be or even just simply providing 

21 information. It depends on how you provide that 

22 information. And there's been research showing that a 

23 study found that the college scorecard information on 

24 colleges had really no significant impact specifically 

25 on black and Hispanic students' college choices. So, if 
Committee Meetings - 01/19/22

1 we're going on that route and we're leaning and you know 

2 and we're caring about the students who are most 

3 disproportionately impacted and need the most help in 

4 navigating the higher education sector, information 

5 alone really is not the tool that we should be fighting 

6 for. The Education Department has other tools, 

7 specifically what we're talking about here today, so I'm 

8 hoping we can really lean on those because it's a proven 

9 mechanism that can help students go in other ways or, 

10 you know, ensure the education sectors are being pushed 

11 into are really ones that will thrive and be able to 

12 reach that outcome.

13 MS. MILLER: Thank you, Amanda. 

14 Emmanual and Marvin, I see your hands are up and I have 

15 you in the queue, but Anne put a question in the chat 

16 and I just want to give her that time.

17 DR. KRESS: Sure. Just really quickly, 

18 you know, I think going back to Barmak said, there were 

19 provisions in previous regulations that were really to 

20 protect against a lot of this, and I'm wondering if the 

21 Department has any data that's responsive to how 

22 effective they were. And then I just want to plus one 

23 what Amanda said. I do think there's a whole host of 

24 things we could do with these disclosures, which I think 

25 are incredibly important to students, but to really use 
Committee Meetings - 01/19/22

1 or test them before we roll out frameworks and formats 

2 so that we're putting the information in the hands of 

3 those who need it most in ways that they can use it. And 

4 I do think that's something we still have a long way to 

5 go on.

6 MS. MILLER: Thank you, Anne. 

7 Emmanual.

8 MR. GUILLORY: I was just going to 

9 share that in looking at the 2010 and 2014 regulations 

10 when it comes to disclosure requirements, I do believe 

11 that disclosure requirements are important, but I also 

12 support what people are saying that should be the only 

13 metric, obviously. But I agree with Yael on what she was 

14 sharing that with disclosure requirements that can help 

15 inform a student and their family of the program they're 

16 about to enter into and whether or not it's something 

17 they actually want to do or not. So, I think that 

18 information sharing is important. And at the very least, 

19 I think it should include a list of occupations that the 

20 program prepares a student to enter. It should include 

21 on-time graduation rates, tuition and fees, books, 

22 supplies and room and board with a link to other cost 

23 information for the program. It should also include the

24 placement rate for students completing the program and 

25 the median loan debt incurred by students completing the 
Committee Meetings - 01/19/22

1 program, if we're going to stick with the median debt or 

2 whatever debt information that we agree to. So, at the 

3 very least, I think it should include that. Obviously, 

4 the 2014 rule added 16 pieces of disclosure information, 

5 and the list is rather long. So, I'm obviously not going 

6 to read through those, but I think at the very, very 

7 best base level, we have those five that I articulated.

8 MS. MILLER: Thank you, Emmanual. 

9 Marvin.

10 MR. SMITH: Yeah, I just wanted to 

11 plus one on what Anne and Carolyn are talking about in 

12 terms of disclosures. You know, right now, they're 

13 scattered all over school websites. They're hard to 

14 find. They're difficult to do comparisons. I'm not sure 

15 if we're serving students well with the system we have 

16 right now. I think that a centralized website similar to 

17 the college scorecard makes sense to me. Maybe it's not 

18 exactly what the college scorecard is presenting, but I 

19 really like the idea of centralizing and having a 

20 comparison site for students.

21 MS. MILLER: Thank you, Marvin. Brad. 

22 MR. ADAMS: Yes, I believe we need to 

23 decide on the metrics first, then we can decide how to 

24 best disclose it to students. Students are overwhelmed

25 with the amount of information to be provided to them. I 
Committee Meetings - 01/19/22

1 just want to make sure we prioritize the disclosures to 

2 what's most important and what we deem most essential so 

3 we can get that information to students. And I believe 

4 there are so many disclosures right now, I'm not sure 

5 that they would know where to go find the information. 

6 So, I think college scorecard, I agree, probably makes 

7 the most sense to a college navigator, but you know, 

8 again, we need to prioritize the disclosures first.

9 MS. MILLER: Thank you. And just to 

10 let the Department know that there is a lot in the chat 

11 that could be useful, including some data requests for 

12 [audio] sessions. I just wanted to mention that. Jamie.

13 MS. STUDLEY: As a former FDA lawyer, 

14 I note that there is a precedent for regulations that 

15 specify type, size and location of disclosures and 

16 necessary information, as one of the team that built the 

17 college scorecard. I would mention that the biggest 

18 effect of disclosures, even though they appear to 

19 students and we're not sure how much they are used, the 

20 biggest effect is the incentive for institutions to 

21 either improve what they have to disclose or not need to 

22 make the disclosure by changing the circumstances. And 

23 third, because we could use a moment like this in the 

24 last few weeks, I was trying to think about better 

25 disclosure models, and I made up one that said if the 
Committee Meetings - 01/19/22

1 disclosure was the chances that you would be able to 

2 repay this loan within X years is and the slide was from 

3 rock solid to snowball's chance in hell would we do 

4 better in getting the attention of students? I say that 

5 with humor, but I do think that when we think the 

6 disclosures are right, there is a place for them. How 

7 can we do it in ways that are more, are there ways to do 

8 it that might be more vivid and effective? I think the 

9 test for disclosures would be where the decision should 

10 be for students. It's a creditor's responsibility to 

11 judge quality. The state has specific things that it has 

12 to judge in a yes/no. Should this place be approved by 

13 the state, accredited by an accrediting agency, and that 

14 the Department of Education has to decide, can this 

15 institution participate in gainful is one of those 

16 cannot participate questions. But there's another set of 

17 questions that it is right to let people decide, just 

18 like we let them decide whether to take mortgages that 

19 do pose responsibilities and risks. And I think that's 

20 the dividing point for when a disclosure is appropriate 

21 and when it's up to accountability entities to make a 

22 question of go, no go, in or out, allowable or not.

23 MS. MILLER: Thank you, Jamie. Debbie.

24 MS. COCHRANE: I think given that we 

25 are talking about disclosures in the context of gainful 
Committee Meetings - 01/19/22

1 employment rule, which is about career education 

2 programs, I think it's really important to also think 

3 about job placement rates in terms of the substance of 

4 any disclosures that do happen. I think those are 

5 arguably you know one of the most important figures that 

6 students would want to have as they're considering 

7 whether or where to enroll. The lack of consistency 

8 across existing placement rates is a huge, huge problem. 

9 And of course, some accrediting agencies require them, 

10 some don't. The ones that do require them have different 

11 definitions. But I'm going to put it into the chat also 

12 something that I think it would be great for this 

13 committee to look at again is a proposal that a working 

14 group of negotiators in 2013/14 put forth regarding 

15 coming up with a more standardized approach federally to 

16 job placement rates for the purposes of gainful 

17 employment disclosure. So, I think that might be worth 

18 just another look at again.

19 MS. MILLER: Thank you, Debbie. 

20 Amanda.

21 MS. AMANDA MARTINEZ: Sorry, I just 

22 have one more comment as I'm hearing these other 

23 comments related to disclosure and specifically when it 

24 comes to the GE rule. You know, we've done while this 

25 isn't like rigorous, I can't say that this is like a 
Committee Meetings - 01/19/22

1 generalized statement. This didn't go through a 

2 randomized controlled trial. But however, I'm a part of 

3 an organization that is connected to affiliates. These 

4 are their own separate individual organizations, 

5 nonprofit or health community centers, for instance, or 

6 even schools themselves that are connected to the 

7 community. And so, when we conducted a study where we 

8 went to the community and talked to students and 

9 families, you know, we did come across and when we 

10 talked to the families about their, the question the 

11 central question was how did you decide to go to 

12 college? What was your financial journey and how did you 

13 decide which college go to? You know, we had a range of 

14 questions, and some students didn't realize that they 

15 did enter, students who realized after the fact that 

16 they were at a for-profit institution because they 

17 didn't realize that there were different types of 

18 institutions. Really, the story we heard for those who 

19 did enter these types of programs was they were 

20 motivated by one, the value of education. But and 

21 another was the promise of being able to rapidly go 

22 through the program because maybe they went through 

23 another program, they failed at it. Well didn't fail, 

24 but they have struggles to get through the program. You 

25 know, with this program, they were promised that they 
Committee Meetings - 01/19/22

1 would get out quickly and they would be entering a job 

2 in less than a year or two. And that to them was this 

3 economic promise they were hoping on and being told 

4 about throughout their education system and really was 

5 something they were needing to then continuously survive 

6 in the reality that they were given. So, really they 

7 were motivated, motivated mostly by those promises. I am 

8 not sure we didn't hear stories, at least from the 

9 Latino perspective and this small sample of students 

10 that they were looking at all this information. They 

11 were so motivated by their promise of education, the 

12 promise that they would finally achieve some type of 

13 better job security for themselves and their family. So,

14 I just want to kind of keep that in mind. You know, I 

15 can try to bring other stories to the forefront to help 

16 inform better decision-making on how to help students 

17 make these decisions at these really critical points of 

18 their of their journey and when they are learning about 

19 these programs.

20 MS. MILLER: Thank you, Amanda. Okay. 

21 I don't see any other hands. So, Greg, is it okay to 

22 move on?

23 MR. MARTIN: I think so. Let's move on 

24 to question nine the final, our final question, which is 

25 how should the Department ensure that institutions are 
Committee Meetings - 01/19/22

1 not simply shutting down old programs and starting up 

2 new similar programs to avoid the consequences of the GE 

3 rule? For some context, for context, we did in the 

4 previous rule have some regulations surrounding the 

5 standing up of new programs that had to do with when the 

6 institution was informed of failing for one year, 

7 failing for a second year and finally, if they failed, 

8 how long it would be before they could stay at the 

9 program again. And all that was keyed on the first, I 

10 think the first four digits of the CIP code. So, with 

11 that context, then asking what we what we could, because 

12 there is always the possibility of institutions simply 

13 shutting down a program that they know to be a failing 

14 program in advance of any consequences which accrue to 

15 them and in standing up a program which might not be 

16 appreciably better. So, we throw it out there to the 

17 negotiators. What might we do to prevent that from 

18 happening?

19 MS. MILLER: Okay. Barmak.

20 MR. NASSIRIAN: So, this first of all, 

21 this is a very legitimate concern that that the 

22 Department is expressing here, but it's the price of our 

23 past sins kind of catching up with us. The Department 

24 approaches not only GE, but almost every other facet of 

25 participation in Title IV as essentially a freebie for 
Committee Meetings - 01/19/22

1 institutions. So, to address the GE issue in particular, 

2 we allow institutions to offer risky programs. We give 

3 them multiple years to fail. And when they fail, the 

4 worst we do to them is to shake a stern finger in their 

5 face and tell them not to do it again. Because there are 

6 no actual consequences associated with offering failing 

7 or subpar programs, you really have created no incentive 

8 for institutions not to take the risk. The risk is 

9 entirely on students and on the taxpayers who have to 

10 pick up the pieces after the fact. So, you know that's 

11 just the way this Department has historically regulated 

12 the issues. I don't know what to do about that, but it 

13 brings me back to the broken record. If we were to 

14 impose some upfront metrics that that, you know, that 

15 legitimate institutions absolutely follow. Community 

16 colleges don't just wake up one day and decide to offer 

17 a GE program. They go through a laborious process 

18 internally and with employers and with the Labor 

19 Departments within their regions before a new program is 

20 introduced, there is integrity to the process of program 

21 introduction. Part of our problem is we rely on CIP

22 codes. Well, you know, the uninitiated may ponder, well 

23 what's a new CIP code cost? Well, all it costs is three 

24 institutions offering the same number, and in a setting 

25 where you have multi-campus multi-institutional empires, 
Committee Meetings - 01/19/22

1 creating three fake programs is just a matter of will. 

2 So, I would suggest again, first of all, there ought to 

3 be consequences associated with failing, consequences 

4 that go beyond simply not do it again. Don't do it 

5 again. But beyond that, some upfront metrics. Is the 

6 program properly accredited? Did you please show us the 

7 kind of market research and the kind of consultation 

8 with employers you did before you made up this field and 

9 decided to market the hell out of it? I don't get any 

10 extra time for English as a second language, Brady? No? 

11 Okay.

12 MS. MILLER: Sorry. Okay, Johnson.

13 MR. TYLER: English is my first 

14 language, and I'm not nearly as articulate as Barmak. I 

15 would just say, you know, I've struggled with this, I 

16 saw the other day that a Federal court ordered someone 

17 not to participate in the pharmaceutical industry ever 

18 again. Now, obviously, that's a judge. But I, you know, 

19 people like Yael and others have law enforcement 

20 expertise on this. But this is a problematic thing that 

21 it seems like it's a regulatory question, really. And 

22 there must be something within the statute that doesn't 

23 that allows you to protect students and not be defrauded 

24 again if something's coming on like just repackaging. I 

25 have seen this sort of practice in the world of debt 
Committee Meetings - 01/19/22

1 relief scams, where the people just change their name 

2 and change their address and all this sort of stuff. 

3 And, you know, it seems like it's a very hard thing to 

4 control. So, I think you have to control the money. And 

5 I think you have authority to do that.

6 MS. MILLER: Thank you, Johnson. Okay, 

7 Yael.

8 MS. SHAVIT: Thanks. And, you know, 

9 this is a maybe not the most detailed proposal, but I 

10 think one thing that some regulations include and some 

11 federal regulations include as well are anti-evasion 

12 provisions, right? And I think that it could probably be 

13 fairly simple to include something like that in a reg, 

14 making clear that repackaging that is clearly for the 

15 purpose of evading the bad outcome of GE determinations 

16 is itself grounds for significant consequences with 

17 respect to Title IV. It is, if nothing else, tantamount 

18 to fraud and lying to the Department, which I think 

19 should itself imperil an institution's access to Title 

20 IV funds. So, I think there's probably a language that 

21 can be borrowed from other regs that that would satisfy 

22 this concern.

23 MS. MILLER: Thank you, Yael. Barmak.

24 MR. NASSIRIAN: Johnson's comment 

25 reminds me to strongly recommend to the Department 
Committee Meetings - 01/19/22

1 668.82, which is existing regulations that govern 

2 standards of conduct for institutions and for third 

3 party servicers. It's a little funky because parts of it 

4 apply to institutions and servicers. The really good 

5 parts seem to only apply to third party servicers, which 

6 I don't quite understand. I'd rather regulate the 

7 principle and assume the agent is regulated than just 

8 regulate the agent. But there's really some pretty good 

9 language there that ought to be incorporated, not in GE, 

10 frankly, but out of respect to Brad in standards of 

11 administrative capability so they apply to everybody.

12 MS. MILLER: I do not see any more 

13 hands. Greg, is it okay to close this one out and then 

14 maybe take a break?

15 MR. MARTIN: Yes, and I want to thank 

16 everybody for the excellent conversation on GE. I think 

17 it was the Department got a lot out of it and I really 

18 appreciate all the thought that you put into it. So 

19 yeah, I think it's we'll close this out and take a 

20 break.

21 MS. MILLER: Okay, I have 2:34 on my 

22 clock, so let's see back in 10 minutes. Thank you. Okay. 

23 Welcome back. I hope you had a very good break. Just 

24 wanted to note that Sam Veeder is back as the primary at 

25 the table, and we welcome her. Before we move on, I want 
Committee Meetings - 01/19/22

1 to address public comment. We will have that at four 

2 o'clock. If everyone who has registered for public 

3 comments could log on early, maybe 10 to 15 minutes. And 

4 also, please make sure that you're naming convention 

5 matches the name that you registered with. Otherwise, we 

6 won't be able to let you into the session. With that 

7 said, Greg, are we ready to move to the next issue?

8 MR. MARTIN: As ready as we ever will 

9 be. Yes, let's get started with issue paper number four. 

10 And we're moving into financial responsibility. And 

11 people might find it rather daunting that this issue 

12 paper is considerably thicker than the other ones, but I 

13 would point out that, well, it is, and it is a little 

14 dense, but a lot of it is the rescinded 668.15. So, I 

15 just want to point that out before we before we get into 

16 that. So, basically the redlines are here. So, anything 

17 we rescind, we redline out and that whole section was 

18 removed. So, we'll discuss that. But, that is a 

19 substantial portion of the number of pages you have in 

20 front of you. So,we're going to start with financial 

21 responsibility, then a bit of an introduction first. 

22 Give you the statutory citation of 498C of the HEA. And 

23 we're looking at the regulatory sites, 34 CFR 668.15, 

24 668.23. And then in subpart L, 668.174. So, we'll move 

25 into the summary of issues here. And as you're probably 
Committee Meetings - 01/19/22

1 aware, we are required under the HEA to monitor 

2 institutions financial responsibility in an effort to 

3 protect taxpayers. Institutions that are not financially 

4 viable, and we point out here that the mechanisms for 

5 measuring financial responsibility, namely the composite 

6 score, do not always suffice to accept to assess the 

7 risk or of closure or liabilities that an institution 

8 may face. The Department proposes regulatory changes 

9 that will increase the ability to identify high-risk 

10 events and require financial protections as needed, and 

11 we seek to streamline the regulations by consolidating 

12 the financial responsibility requirements for change of 

13 ownership in Subpart L and revising the existing 

14 regulations at and reserving rather, not revising, 

15 reserving the existing regulations at 34 CFR 668.15. And 

16 as I pointed out earlier, the Department is not 

17 proposing to make any changes in the composite score 

18 calculation at this time. So, looking at some of our 

19 proposals, I already referenced 668.15, Factors of 

20 Financial Responsibility. We're going to remove and 

21 reserve the entirety of 668.15 and instead incorporate 

22 components of that section into the financial 

23 responsibility requirements under a new proposed 668.167 

24 of subpart L of the regulations. This will streamline 

25 the regulations and ensure financial responsibility 
Committee Meetings - 01/19/22

1 requirements are all located under Subpart L because 

2 that has been an area of confusion for a number of 

3 years, maintaining 668.15 while we had Subpart L, which 

4 is financial responsibility. Under 668.23, Compliance 

5 Audits and Audited Financial Statements, we are revising 

6 the date for submission in a timely manner, making it by 

7 the earlier of 30 days after the completion of the 

8 report, or six months after the end of the fiscal year. 

9 By requiring reports to be submitted when they were 

10 available, the Department will be able to evaluate 

11 results far sooner. So, we still have that that deadline 

12 being the absolute deadline being six months after the 

13 end of the fiscal year, which it currently is. But we 

14 would be stipulating that it's 30 days after completion 

15 of the report if it's before that time, so that if the 

16 report is completed, it doesn't sit for a number of 

17 months until being submitted. Moving on to Subpart L 

18 under 668.171(b), the General Standards of Financial 

19 Responsibility, we would be requiring institutions to 

20 demonstrate that they are able to meet their financial 

21 obligations by noting additional cases that constitute a 

22 failure to do so. These include failure to make debt 

23 payments for more than 90 days, failure to make payroll 

24 obligations, or borrowing from employee retirement plans 

25 without authorization. Looking at mandatory triggering 
Committee Meetings - 01/19/22

1 events, the Department proposes to revise the set of 

2 conditions that automatically require posting of 

3 financial protection if the event occurs as prescribed 

4 in the regulations. The triggers are designed to measure 

5 external events or financial circumstances that may not 

6 appear in the institution's regular financial 

7 statements, or that may not yet be reflected in the 

8 composite score. And you can see here the triggers that 

9 we're referencing. The first one is revising triggering 

10 events for debts, liabilities and losses. And I'm not 

11 going to go read through all of that in the interest of 

12 time, but just saying that this includes clarifying the 

13 settlements, final judgments or administrative 

14 procedures will trigger financial protection 

15 requirements and we'll go into that in more detail when 

16 we look at the regs. The second one, there would be 

17 clarified language related to the withdrawal of owner's 

18 equity for proprietary institutions, ensuring that these 

19 withdrawals are captured, restoring and revising a 

20 financial protection trigger for cases where the 

21 institution is required to submit a teach out plan or 

22 agreement, moving a trigger related to major actions by 

23 a state authorizer from discretionary to mandatory. So,

24 this would ensure the protection if an institution may 

25 be subject to a loss of Title IV eligibility and closure 
Committee Meetings - 01/19/22

1 due to actions taken by a state. Next, we'll be refining 

2 the language for financial protection triggers affecting 

3 publicly traded institutions to better reflect early 

4 warning signs that will indicate problems with these 

5 institutions. We're moving triggers we've proposed 

6 rather to move triggers related to the loss of Title IV 

7 eligibility due to failure to meet 90/10, or two years 

8 of a failed cohort default rate that is not successfully 

9 completed. These would be moved from discretionary 

10 triggers to mandatory triggers. And finally, we're going 

11 to add a new or propose rather to add a new trigger 

12 assessing the impact when an institution makes a 

13 contribution to the school in the quarter before the end 

14 of the fiscal year and then makes a distribution in the 

15 first two quarters of the next fiscal year. So, this is 

16 with reference to attempts to manipulate financial 

17 responsibility scores through this practice. So,

18 assessing the effects of these transactions will allow 

19 us to obtain financial protection where we see this as 

20 occurring. Next, we're looking at discretionary triggers 

21 under 668.171(d), and the Department proposes to revise 

22 the set of conditions that may, at the discretion of the 

23 Secretary, require posting of financial protection if 

24 the event occurs as prescribed in the regulations. These 

25 triggers are designed to measure the external events or 
Committee Meetings - 01/19/22

1 financial circumstances that may not appear in the 

2 institution's regular financial statements, or they may 

3 not yet be reflected in the composite score. So again, 

4 these are discretionary triggers, and the first one here 

5 is to refine the language related to accreditor actions,

6 clarifying that probation, show cause, or equivalent 

7 statuses may require financial protection. That is at 

8 the discretion of the Secretary; restoring a trigger 

9 that allows the Department to seek financial protection 

10 in the event that the institution sees significant 

11 fluctuations in Title IV volume. This would allow us to 

12 seek protection if we see large fluctuations across 

13 award years, fluctuations in volume of Title IV funds. 

14 Next is to allow the Secretary to obtain financial 

15 protection on the basis of interim financial data. 

16 Should be submitted to the Department to show 

17 significant concerns with cash flows, liquidity or 

18 withdrawal rates. Next one is to restore the prior 

19 trigger related to pending claims for Borrower Defense 

20 relief, when the Secretary has formed a group process to 

21 consider those claims. And we had two new triggers under 

22 discretionary triggers too, these are related to 

23 indications of possible future closure. And one is the

24 discontinuation of a significant share of academic 

25 programs at the institution, which may be an indication 
Committee Meetings - 01/19/22

1 that the institution is no longer able to provide 

2 education for which the students have enrolled. The 

3 second relates to closure of most of the institution's 

4 locations or closure of ground-based locations, while 

5 continuing to offer programs in an online format. Next, 

6 we'll take a look at changes related to when we would 

7 recalculate a composite score, making technical changes 

8 to adjust cross references to trigger events in C and D, 

9 and more accurately reflect triggering events that are 

10 revised throughout that section. Under 171(f), these are 

11 reporting requirements. We're making some technical 

12 changes to adjust reporting requirements to reflect 

13 changes to the mandatory and discretionary triggers. 

14 Under 171(h), these are audit opinions and disclosures. 

15 We're adjusting the language regarding an auditor's 

16 opinion of doubt about the institution's ability to 

17 continue operations, clarifying that we may 

18 independently assess whether the auditor's concerns have 

19 been addressed or whether the opinion of doubt reflects 

20 a lack of financial responsibility. Under 174, we're 

21 looking at past performance clarifying that the language 

22 related to auditor program review findings that lead to 

23 a liability of at least 5 percent of Title IV volume at 

24 the institution, so that the language will clearly 

25 suggest reports in question where those issued in the 
Committee Meetings - 01/19/22

1 most two recent years were rather those issues in the 

2 most recent two most recent years, rather than reviews 

3 conducted in the two most recent years. Next, under 

4 668.175, Alternate Standards and Requirements, we're 

5 making technical changes to adjust cross-references, 

6 clarify language related to financial surety. And under 

7 176, Change of Ownership, this has to do with

8 consolidation of financial responsibility requirements 

9 for institutions undergoing a change of ownership to 

10 clarify the regulations so that institutions are aware 

11 of the requirements that apply in the event of a change 

12 of ownership. This would include specifying requirements 

13 for a materially completed application, which will 

14 include two years of audited financial statements at the 

15 level of a change of in ownership or a letter of credit 

16 requirement. Proposed 668.176 also specifies conditions 

17 for financial responsibility, including not having 

18 operating losses, requires positive assets and requires 

19 a passing composite score and compliance with other 

20 requirements in Subpart L. And finally, the proposed 

21 language requires institutions to receive a temporary 

22 provisional Program Participation Agreement following a 

23 change of ownership. So, that's a that's an overview of 

24 what we plan to do here. And at this point, we can, 

25 we'll walk through the regs by paragraph and open the 
Committee Meetings - 01/19/22

1 floor for comment, but first, so our first red line that 

2 we're looking at here is, rather relates to, 668.15. And 

3 you can see that that has been removed and reserved. All 

4 of that has been redlined. The current regulations at 

5 668.15 are eliminated and instead incorporated into 

6 Subpart L. The inclusion of 668.15 is a relic of the L 

7 regulations, financial responsibility requirements or 

8 otherwise all included in subpart L under these proposed 

9 rules. So, the requirements related to financial 

10 responsibility for changes in ownership are in 176. So,

11 we won't see those here, but we won't be looking at 

12 those in this part of the paper. Rather, we'll be 

13 looking at those toward the end of the paper. So just 

14 know that we've not taken away the requirements of 

15 financial responsibility, requirements for change of 

16 ownership. We've just eliminated 668.15 and moved them 

17 into Subpart L and we will look at those when we get to 

18 that particular section, so would ask you to turn past 

19 where you see 668.15 has been eliminated. As I said 

20 before, that does account for some number of pages. 

21 MS. MILLER: Okay, we have quite a few 

22 hands up, but I just want to note that Kelli Perry is 

23 back at the table representing nonprofit institutions.

24 MR. MARTIN: Okay.

25 MS. MILLER: And Carolyn, your hand 
Committee Meetings - 01/19/22

1 was up unless you lowered it.

2 MS. FAST: Oh, I didn't mean to.

3 MS. MILLER: Okay. Okay. Well, why 

4 don't you go?

5 MS. FAST: Thank you. I appreciate it. 

6 I appreciate the Department for bringing up this really 

7 critical issue of financial oversight. And I just wanted 

8 to take a minute to kind of put it in context for why it 

9 is so important from the student protection viewpoint. 

10 There's been a real pattern in recent years of sudden 

11 closures of generally large for-profit chains. And when 

12 that happens, students' education is disrupted, and this 

13 is really an enormous issue. There are half a million 

14 students displaced by college closures in just a five15 year period looked at in a Chronicle of Higher Education 

16 report. Over a thousand campuses closed, and every time 

17 that happens, students' education is disrupted and many 

18 are unable to complete their program in other programs 

19 and are left with debt and few job prospects after 

20 putting in a lot of time and effort. So, part of the 

21 reason for the financial oversight rules is to try to 

22 prevent these kinds of closures that happen without 

23 warning to students. And another really important part 

24 of it is to protect taxpayers. And that is because 

25 taxpayers end up paying millions of dollars in these 
Committee Meetings - 01/19/22

1 types of closures because of the need to discharge loans 

2 for students who are unable to complete their program. 

3 And because these programs often have other liabilities 

4 which aren't, you know, which may not be able to be 

5 collected on. So that's, I just wanted to, I have other 

6 comments, too, but I just wanted to start off with why 

7 this is such a crucial thing for students and for 

8 taxpayer protections, and why strengthening these rules 

9 are so important. We think that the Department's 

10 proposals in general are a good step forward, but there 

11 needs to be more done and we're happy to be able to help 

12 with some suggestions as we go through. But I just 

13 wanted to start with that.

14 MS. MILLER: Thank you. Next is Kelli 

15 and then Barmak.

16 MS. PERRY: Thank you. I would echo 

17 Carolyn's comments, I think that this is very important 

18 for all involved being students, taxpayers and 

19 institutions alike. I just want to make some overarching 

20 points before we start on this section. And one thing 

21 that the point of this financial responsibility you know 

22 regulation has to do with the fact that you're looking 

23 for schools that are going to close. And in doing that, 

24 what are the right metrics to do that? The financial 

25 responsibility, the composite score, and now the 
Committee Meetings - 01/19/22

1 additional triggers that have been added specifically, 

2 the composite score hasn't been looked at you know in 

3 great detail in 25 years or close to 25 years. And 

4 schools have changed in those twenty-five years. There 

5 was an effort to try to make some corrections to the 

6 composite score the last time, and I understand we're 

7 not addressing those this time, but we did take some 

8 great steps in clarifying things as it related to 

9 pension and endowments. But in doing so, we also added, 

10 the Department also added some metrics as it related to 

11 long-term debt and trying to stop schools from taking 

12 lines of credit in order to adjust their score. In doing 

13 that, though, it has put potential concern on scores for 

14 institutions as it relates to schools that might be 

15 trying to refinance their debt in this low interest rate 

16 environment and those decisions that schools are making 

17 to do that in order to refinance are things that 

18 ultimately would help their operations and potentially 

19 help students because it would free up additional 

20 monies. So, there is concern about long-term debt. I 

21 would ask that the Department reconsider looking at what 

22 the definition is as it relates to that. The other thing 

23 I'd like to point out too is that I think, before 

24 providing any penalties to schools and in this 

25 situation, I think there needs to be a more holistic 
Committee Meetings - 01/19/22

1 look as far as it relates to providing draft scores like 

2 is done with federal default rate calculations. You 

3 know, for example, once those scores are calculated or 

4 recalculated by the Department, provide a draft of those 

5 scores to schools in order to validate. And if there's 

6 differences between what the Department thinks and what 

7 the school thinks, apply some type of appeals process 

8 where the institution could be looked at holistically, 

9 as opposed to just as it relates to whether or not the 

10 composite score was a passing score or a failing score. 

11 Thank you.

12 MS. MILLER: Thank you, Kelli. Barmak, 

13 then Brad.

14 MR. NASSIRIAN: So, I too want to make 

15 some just overarching general comments here and then end 

16 with the question. The general comment I want to make is 

17 that in light of the more than 1,000 closures, 

18 precipitous closures that we just heard about and the 

19 fact that in the most egregious cases, the Department 

20 ends up basically holding the bag whatever the 

21 composite. And I appreciate the black box that you want 

22 to present us with when it comes to the composite score. 

23 But boy, if it were working, we wouldn't have case after 

24 case of the Department showing up just ahead of the 

25 undertaker to declare decisive action when the school is 
Committee Meetings - 01/19/22

1 already completely broke and there is no money to be 

2 had. So, there's obviously something wrong. You know, 

3 it's easy to condemn Corinthian and ITT and call them 

4 crooks, and they ripped off people. But the Department 

5 has egg on its face. My God, how many more collapses can 

6 happen under your watchful eyes? I mean, there's 

7 something really missing here. And what is missing, to 

8 give you the analogy that means a lot to me, not perhaps 

9 as much to you, I feel like we're in a kind of a pre10 Copernican model of the universe, and we're trying to 

11 sort of correct the observable by drawing more and more 

12 epicycles. So, the Department is now enumerating a whole 

13 bunch of triggers, most of which are set instead at the 

14 barn door like three counties over. But the enumeration 

15 of things that should trigger a review does not 

16 substitute for a dashboard that accurately and in real17 time captures the financial circumstances of entities 

18 that are entrusted with monies that don't belong to them 

19 until they earn it. So, so that's, you know, that 

20 overarching problem is a real challenge here, it seems 

21 to me and it causes all kinds of problems for legitimate 

22 actors that are at no risk of closure. And it ironically 

23 allows the ones that are most at risk of closure to go 

24 scott free. It's really problematic from that point of 

25 view. So, I hope that the Department is open to some 
Committee Meetings - 01/19/22

1 substantive coverage ratios, some reasonably intelligent 

2 ways of at least requiring limitations on the amount of 

3 federal dollars at risk, than just enumerating more and 

4 more triggers, most of which are completely meaningless. 

5 The question I want to ask is would any of these have 

6 stopped Corinthian from collapsing the way it did? And I 

7 really would be hard pressed to believe that they would, 

8 because most of, you know by the time the accrediting 

9 acts, by the time the state acts, by the time there is a 

10 judgment, by the time is bankruptcy, there's nothing 

11 left. So, I'm not sure what we're doing here. But this 

12 is not an effective, financially literate approach to 

13 what the commercial sector does very successfully all 

14 the time. We really do need some help, I think, from the 

15 Treasury Department and from folks who understand the 

16 capital markets as to when to extend credit and when to 

17 be alarmed at the circumstances of a participating 

18 institution.

19 MS. MILLER: Thank you. Brad, and then 

20 Jessica.

21 MR. ADAMS: Thank you. I would like to 

22 second Kelli's comment that it is disappointing that the 

23 Department has decided not to address the composite 

24 score as part of this rulemaking. We keep kicking that 

25 can down the road. One of the biggest accounting 
Committee Meetings - 01/19/22

1 pronouncement changes in my lifetime has just been 

2 recently released and is effective as of 12/15/2021 from 

3 [inaudible] is going to bring all operating leases onto 

4 balance sheets effective in fiscal year 2022. What this 

5 does is it will bring assets and liabilities up. Equity 

6 will stay the same. There's no financial difference on 

7 day one without the operating lease day two with the 

8 operating lease on balance sheet other than equity as a 

9 percentage of assets when the equity ratio goes down. In 

10 addition, it's going to cause schools to enter into 

11 shorter term leases to keep that impact [inaudible], 

12 which will mean expenses will be higher because of the 

13 paying higher rates for these shorter term leases in 

14 order to hit a higher score on an equity ratio. Also, as 

15 Kelli mentioned, refinancing of debt is off the table 

16 because if debt is not used for capital assets on that 

17 date forward, it cannot be counted towards the primary 

18 reserve ratio. So again, schools are making bad 

19 financial decisions because of a composite score that's 

20 out of date, and I would encourage the Department as 

21 kind of Barmak alluded to that. Do we have any evidence 

22 that the schools that have gone out of business would 

23 have failed that composite score? Can the Department 

24 produce anything that says the schools that have failed 

25 had a failing composite score or did they have a passing 
Committee Meetings - 01/19/22

1 composite score and the composite score just wasn't in a 

2 position to actually catch the failure? Thank you.

3 MS. MILLER: Thank you. Jessica.

4 MS. RANUCCI: I just wanted to echo 

5 what Carolyn said, but a little bit more from a 

6 perspective on the ground. I hope that most of you have 

7 not seen what the fallout from these precipitous 

8 closures looks like other than in the news, but it's 

9 really bad. And just to give you a sense, you know, a 

10 few years ago we just had a small single campus for11 profit school that was operating in Manhattan. It was in 

12 precarious financial circumstances and had emailed the 

13 students a few times saying it might be acquired and 

14 then it wasn't acquired. It emailed the students in like 

15 August 21st, 23rd something and said, hey, fall semester 

16 is open, register right now, registrar's office is open. 

17 Obviously, the students came, paid money, including some 

18 out of pocket. On September 1st, it locked its doors and 

19 we, our office, was flooded with calls. The school just 

20 disappeared overnight, so students obviously had no 

21 options for the fall. It was already September. There 

22 was no way that they could continue their program right 

23 away. The school had not, my understanding from the 

24 accreditor, had not coordinated with the accreditors, 

25 such that there was an approved teach out. The records 
Committee Meetings - 01/19/22

1 were a mess. We still have trouble getting transcripts. 

2 Theoretically, they're being held at another school. The 

3 actual physical inventory of the school, I think at one 

4 point, was just abandoned by the state. So, any records 

5 that are left, I believe, are just gone now because no 

6 one would pay to house them. We represented a group of 

7 students in Chapter 7 bankruptcy trying to get those out 

8 of pocket payments back. We weren't able to do so. In 

9 the meantime, there were a bunch of faculty there who 

10 hadn't gotten paid and whose health insurance had been 

11 retroactively canceled. So people, like many of you here 

12 who are on university health insurance, if you just have 

13 a routine surgery now, all of a sudden they had to pay 

14 out of pocket for that. And so, I just can't emphasize 

15 enough, you know, from the perspective of students and I 

16 think other people involved, just like how horribly 

17 damaging these were. Students spent years of their lives 

18 and these are almost all low income, almost all students 

19 of color. They were in programs like HVAC or automotive 

20 technology. They weren't going to be high earners 

21 anyway, and it was just extremely disruptive. Many of 

22 them never went back to school to their other programs, 

23 and you know, we helped as many as we could get a closed 

24 school discharge. But obviously that doesn't compensate 

25 them for the years of their lives. So, I just I just say 
Committee Meetings - 01/19/22

1 that because hopefully you guys haven't seen that, and I 

2 just want to really say that I respect the Department's 

3 efforts to try and stop this problem because it's just 

4 it's really terrible and we don't want to see any more 

5 of these in our office. You know, we'd rather spend our 

6 time doing other things.

7 MS. MILLER: Thank you. Carolyn.

8 MS. FAST: Thanks so much to everyone 

9 and Jessica, especially for sharing that really 

10 important information. I just wanted to add to the 

11 conversation about the composite score, which I know 

12 that we're not discussing today, but that we would like 

13 to see the Department consider making changes to. I 

14 believe Brad asked whether there was data on whether the 

15 composite score was actually predictive of school 

16 closures that we've seen in the past, how that all works 

17 out, and I know that there is a GAO report that looked 

18 at the predictability of the composite score and found 

19 that it failed to predict precipitous school closures in 

20 around half the cases.

21 MS. MILLER: Thank you, Yael.

22 MS. SHAVIT: Thanks. I wanted to lend 

23 my voice in support of what the Department is 

24 endeavoring to do here. Regardless of any details that 

25 we talk about, we from the AG perspective view this 
Committee Meetings - 01/19/22

1 issue as a consumer fraud issue. When people make the 

2 decision to go to a school, they do it with expectation 

3 and understanding that they'll be able to get a degree, 

4 and that's a representation that is made to them by the 

5 school. And when a school closes precipitously, you 

6 know, that means that the student was subject to a 

7 significant misrepresentation and one that may very well 

8 be the biggest financial decision or one of the biggest 

9 financial decisions that they're going to make in their 

10 life. So, you know, any efforts to strengthen the 

11 financial requirements here to create meaningful 

12 mandatory triggers, I think are important and we 

13 [inaudible]. 

14 MS. MILLER: Thank you. And I don't 

15 see any other hands. Greg, are we ready to take a 

16 temperature check?

17 MR. MARTIN: Well, before we do that, 

18 a couple of things I want to address, but just, you 

19 know, with respect to the composite score is I, you 

20 know, we understand that there is a considerable 

21 reservoir of thought out there that we need to revisit 

22 these and we're not, we're not disagreeing with that. 

23 What we're maintaining here is that we don't have the 

24 bandwidth to do it at this particular table. When we did 

25 it previously, as I think I pointed out earlier, we had 
Committee Meetings - 01/19/22

1 arranged for a study to be done by a major accounting 

2 firm. It was quite extensive and it was also a very, 

3 very costly survey report that was prepared for us on 

4 which we based the composite scores we did at the time. 

5 We would want to do something similar going forward. So,

6 I don't want to signal that the Department is not 

7 willing to do that or that we're not aware of the 

8 potential need for that, it's just it's rather that we 

9 don't believe it can be done right now at this time, but 

10 so I do want to point that out. As for the predictive, 

11 the predictability of school closures, I want to 

12 reiterate in the strongest terms that we are, we are 

13 always, you know, it's of paramount importance to us to 

14 try to determine as quickly as possible when a school 

15 closure threatens students. And you know we have a lot 

16 at stake with that. And so, you know, it's very 

17 important to us. We understand that in every case, 

18 composite scores haven't been necessarily predictive of 

19 those events. I don't know off the top of my head how 

20 predictive they were or in the case of some of the 

21 institutions that were mentioned, what their composite 

22 scores were. We can probably get that data. But I mean, 

23 one of the reasons for what we're proposing to do here 

24 is because we are cognizant of the fact that composite 

25 scores don't always serve as an indicator of when an 
Committee Meetings - 01/19/22

1 institution is in trouble. So, we are trying to address 

2 some of that through the changes that we see here. As 

3 far as a temperature check, I mean, we could take a 

4 temperature check of the removal of what is the 668.15, 

5 but I don't know if that's effective to do before we've 

6 looked at what replaced it. So, I don't, you know, I 

7 don't know if I want people to. I mean, we could take a 

8 temperature check as far as is, does it make the 

9 regulations? I mean, I think it streamlines the 

10 regulations. It was a good decision to make things a lot 

11 clearer and place everything in Subpart L. Yeah, we can 

12 certainly take a temperature check on whether the 

13 negotiators believe that was the was a good decision or 

14 that's what we ought to do. So, to that extent, yes, we 

15 could take a temperature check.

16 MS. MILLER: Okay, so we're taking a 

17 temperature check on the removal of [inaudible]. Could 

18 you repeat it?

19 MR. MARTIN: Yes, the remove, the 

20 removing and reserving 668.15 moving the relevant parts 

21 of that into subpart L.

22 MR. FINLEY: Greg, if you don't mind, 

23 I would like to add a comment before you take the

24 temperature check.

25 MR. MARTIN: Sure, Steve, go ahead.
Committee Meetings - 01/19/22

1 MR. FINLEY: So just for background 

2 explanation for folks that have not been working on 

3 these regulations for, you know, two and a half decades 

4 or whatever, 668.15 was the old financial responsibility 

5 standards in the regulations before the Department put 

6 in place Part 171 for the composite ratio and the 

7 general financial responsibility standards that used the 

8 ratios for the annual determinations. 668.15 also dealt 

9 with changes of ownership and at the time we did the 

10 original composite score regulations. We didn't have a 

11 good standard to use with that kind of analysis for 

12 changes of ownership. And so it was left in place and it

13 has confused a lot of people in the intervening years as 

14 to why there were all these detailed standards in 

15 668.15, while at the same time we had a financial 

16 responsibility section in Subpart L. So, the goal here 

17 is to make some updates that actually address changes of 

18 ownership, put them into subpart L so it's a general 

19 part of the Financial Responsibility Regulations and 

20 eliminate 668.15 and reserve it for other uses, perhaps. 

21 But that's kind of what's underneath this restructuring 

22 that you're seeing here, and I just wanted to get that 

23 online, but I also want to take this opportunity to say 

24 a number of the changes that you see proposed here are 

25 designed to give the Department additional authority to 
Committee Meetings - 01/19/22

1 make adjustments in a financial responsibility 

2 determination in between getting audited financial 

3 statements from the institution because frankly, that 

4 has been a problem. It's an annual submission. There's a 

5 composite score and a determination of financial 

6 responsibility made on it, and in years past when we've 

7 tried to monitor changes to the institution on an 

8 ongoing basis, we're still left with it having a passing 

9 score, even though we have identified some risky 

10 activity happening. So these changes are designed to get 

11 toward what other people are describing about having a 

12 more reactive ability at the Department to identify and 

13 respond to increased risks that we see. And I'll hold 

14 for now. Thanks.

15 MS. MILLER: Thank you, Steve. Kelli, 

16 your next, but I just wanted to acknowledge that David 

17 Socolow is back at the table for state agencies. Kelli.

18 MS. PERRY: Thank you. I just would 

19 like to follow up on Greg's comment as it relates to the 

20 composite score, and then I won't talk about it anymore, 

21 but in your acknowledgment of the fact that you know 

22 that it needs to be looked at, I guess, and the 

23 statement that it's costly, it was a costly endeavor for 

24 the Department, the way that it currently exists, it's 

25 very costly for institutions, it's very costly for 
Committee Meetings - 01/19/22

1 students, it's very costly for all involved. So I, you 

2 know, I'm hopeful that with what you said that the 

3 Department is committing to looking at this in the near 

4 term because it is not a true reflection of campus 

5 closures.

6 MR. MARTIN: Yeah, in response to I, 

7 you know, we are looking at I don't have the authority 

8 to say I'm not going to do that here, absolutely commit 

9 the Department to looking at this at a specific time or 

10 on a specific table. But I do want to say that we, you 

11 know, we are aware of the of the interest in doing this 

12 and the need to look at this and we are doing that. So,

13 I just wanted to offer some explanation for why we are 

14 taking the position that we're taking at this particular 

15 table and to make clear that it's not because the 

16 Department is steadfastly unwilling to look at the 

17 composite scores. I think anybody would acknowledge that 

18 certainly adding it to this table would be, I think, 

19 untenable given what we have to look at right now and 

20 the lack of preparatory work that exists to look at the 

21 composite scores that would have to be done at a future 

22 time.

23 MS. MILLER: Thank you. Brad.

24 MR. ADAMS: Thank you, this will also 

25 be my last comment on the composite score. I second what 
Committee Meetings - 01/19/22

1 Kelli just said. Maybe it's the CPA in me. It just 

2 really bothers me that when schools make bad financial 

3 decisions because it gives them a better composite 

4 score, it's time to look at the composite score. And 

5 that's what's happening today with this [inaudible] 

6 standard change and when the impact on debt. So, I 

7 understand it's a monumental task to look at it. But if 

8 it's not helping prevent student, I mean from 

9 institutions, from going out of business, frankly, I do 

10 think it's time that we need to look at it in the very 

11 near future.

12 MR. MARTIN: Thank you, I mean, I'll 

13 definitely take that back. I think that it's been made 

14 very clear to us that, not that we weren't aware of it 

15 already, but certainly here that it's something we do 

16 need to take a look at, and I can commit to us taking 

17 that very seriously. So, thank you very much.

18 MS. MILLER: Thank you. Okay, so Greg, 

19 we could either take a temperature check or move on to 

20 the next section.

21 MR. MARTIN: You know, I'm not sure 

22 that a temperature check is really necessary for this 

23 until we look at the, you know, till we get into Subpart 

24 L and see what has replaced those, what was in 668.15.

25 MS. MILLER: Okay.
Committee Meetings - 01/19/22

1 MR. MARTIN: So why don't we move on 

2 to looking at 668.23? So, 668.23 is Compliance Audits 

3 and Audited Financial Statements. Obviously, this is not 

4 Subpart L. This is, I think, Subpart B, standards for 

5 participation, I believe. So, this is dealing with 

6 audits, so in a different subsection. So, you can see 

7 here that the, as we discussed in the overview, the 

8 change to 668.23 is with the submission deadline, and 

9 you can see that much of it remains the same except as 

10 provided by the Single Audit Act, the United States Code 

11 [inaudible] the United States Code. An institution must

12 submit annually to the Secretary its compliance audit 

13 and audited financial statement statements and what's 

14 been added here by the earlier of 30 days following the 

15 date of the auditor's report or six months after the 

16 last date of the institution's fiscal year. So, this is 

17 just again an acknowledgment that currently compliance 

18 audits and audited financial statements must be 

19 submitted within six months of the last day of the 

20 fiscal year, but that the acknowledgment here is that 

21 sometimes they're available sooner, and if they are 

22 available sooner, we would like to get those reports 

23 because it allows us to assess the institution, the 

24 institution's financial situation, far earlier than if 

25 the six months had elapsed. So that's what we're 
Committee Meetings - 01/19/22

1 proposing here, to have it submitted by the earlier of 

2 the 30 days following the date of the auditor's report 

3 and keeping the six-month maximum timeframe. So, I'll 

4 open it up for any discussion or comments anyone might 

5 have on that proposed change.

6 MS. MILLER: Kelli, you're up first.

7 MS. PERRY: Thank you. Two 

8 comments/questions, I guess. So, my understanding is 

9 that the Department uses the easy audit submission to 

10 either recalculate or evaluate the composite score 

11 calculations, currently not the reporting to the 

12 clearinghouse as required by a single audit. And the 

13 current requirement for that is 90 days past [inaudible] 

14 fiscal year. So, is that something that will be changed 

15 as well? And then my second comment/question is that in 

16 your documentation on the front, when you describe this, 

17 you talked about the fact that the Department would be 

18 able to evaluate the results sooner and on a rolling 

19 basis. So currently, those composite scores come out on 

20 you know one list, one date. Can you explain what you're 

21 envisioning as it relates to evaluating results sooner 

22 and on a rolling basis?

23 MR. MARTIN: Well, I'll invite Steve 

24 to come in here. As far as what we proposed, here it is 

25 for FSA audits or financial aid audits. So, that's 
Committee Meetings - 01/19/22

1 except as provided by the Single Audit Act, audits under 

2 that act, which we don't, the Department doesn't 

3 regulate. That does come under the under the Single 

4 Audit Act, and we don't have authority there. So, we do 

5 have authority for other audits to require that they be 

6 submitted after the within 30 days after the audit 

7 report. And I'm not sure I got the gist of the second 

8 part of your question, which was, if I'm not mistaken, 

9 why do we want to10 MS. PERRY: No, so my question is, so 

11 in the on the first page of the issue paper, you talk 

12 when you've documented this by adding the six months you 

13 talked about the fact that the Department will be able 

14 to evaluate the results sooner and on a rolling basis. 

15 So right now, the composite score results are coming out 

16 and one date, one list. And so, can you just kind of 

17 explain what the mechanism or how it would how that 

18 rolling basis of evaluation would be administered, I 

19 guess?

20 MR. MARTIN: I'm going to turn that 

21 one over to Steve because I'm not familiar with the 

22 actual process of audits as he is.

23 MS. MILLER: Steve, you're on mute.

24 MR. FINLEY: Yeah, I thank you very 

25 much. I noticed that when my light wasn't coming on when 
Committee Meetings - 01/19/22

1 I was speaking. A couple of things here. Composite score 

2 list for all institutions may be made available all at 

3 once, but that represents the sum total of the annual 

4 reviews being done by the case teams. And those are done 

5 serially, right? No, it's impossible that every school 

6 could be evaluated on the same day and the list can be 

7 published the next day. So, when we talk about my 

8 understanding of what we're talking about on the ongoing 

9 evaluation are these provisions that talk about getting 

10 additional reports from schools, which was a practice 

11 already done by some case teams for schools that have 

12 been identified as potentially risky, and they do 

13 evaluate cash flow projections. They evaluate the 

14 estimates of the institution's ability to forecast its 

15 own operations over time as additional risk factors, and 

16 that's an ongoing evaluation, separate and apart from 

17 evaluation of the annual audited financial statements. 

18 And just to clarify here, the Department regulations 

19 have always said the audit submissions are due no later 

20 than six months. But what we have seen is we often get 

21 audits coming in at the six-month point where the 

22 completion date on them was substantially earlier. And 

23 we're just going to clarify saying if the audits are 

24 done and they are complete, signed off on, they should 

25 go ahead and be submitted to the Department at that 
Committee Meetings - 01/19/22

1 point, right? Six months was always an outside time 

2 limit. It never prevented an institution from submitting 

3 them earlier and if they're complete, we want them 

4 submitted earlier. That will also enhance our ability to 

5 look at these to do these evaluations sooner.

6 MS. PERRY: And I clearly understand 

7 that, and the 30 days is something that's already added 

8 for the submission to the clearinghouse as it relates to 

9 the completion of those audits. I think my question is 

10 that the Department is using the easy audit submission 

11 to evaluate the financial responsibility calculation. 

12 So, is that timeframe going to change to mirror this 

13 requirement? Because right now it's nine months from the 

14 date of your fiscal year end.

15 MR. FINLEY: Yeah. The way they audit, 

16 the way the regulations are written, audits submitted on 

17 audits prepared and submitted under the Single Audit Act 

18 are accepted as meeting the institution's annual audit 

19 submission requirements. So if they change, if they 

20 adjust the deadlines, those get adjusted automatically 

21 since the Department accepts what is done under those. I 

22 would say the difference is if the audits are complete, 

23 we'll have to resolve whether that means they should be 

24 submitted to the Department sooner if they're already 

25 completed. We'll have to get back to you on that.
Committee Meetings - 01/19/22

1 MS. MILLER: So, I see a Dave 

2 McClintock's hand up and he is an advisor, so I call on 

3 you to give light to this.

4 MR. MCCLINTOCK: Yeah, thank you. I 

5 obviously didn't draft the issue paper, but I think what 

6 is happening here, the single audit guide, it requires 

7 submission already within 30 days after the issuance of 

8 the report. However, the same requirement is not part of 

9 the proprietary audit guide. And so, this was written to 

10 cause those to align with one another, I think it's as 

11 except as provided. So Kelli, the nine-month requirement 

12 seems to still be in place for the single audit with or 

13 issued within 30 days, 30 days of the report being 

14 issued the way that it always has been. It's for other 

15 schools, the 30-day within issuance requirement is being 

16 added. Is that right, Greg? 

17 MS. MILLER: [Inaudible] Okay, Brad 

18 has had his stand up patiently, so, Brad.

19 MR. ADAMS: Thank you. I'm generally 

20 okay and supportive of the language being proposed here, 

21 I just want to call out, and I'm not sure if the 

22 language change is needed or warranted, but the 

23 compliance audit, opinion date and the audited financial 

24 statement opinion date can fall on different days. So, I 

25 just want to make sure it's clear that that's the case 
Committee Meetings - 01/19/22

1 and that there would be 30 days from the actual opinion 

2 date of each separate audit.

3 MR. MARTIN: I'm going to take that 

4 one back for clarification by our staff and as soon as I 

5 get that, I will let you know, thank you.

6 MS. MILLER: Barmak.

7 MR. NASSIRIAN: Just a quick question. 

8 You're not making any changes to subsection three, but 

9 do you, does the Department consider OPMs third party 

10 services?

11 MR. MARTIN: We don't automatically 

12 consider an OPM to be a third-party servicer or if what 

13 an OPM provides, services it provides to the school, 

14 meets our current regulatory definition and what we've 

15 said in subregulatory guidance then then it could. It 

16 could be a third-party servicer. I don't think I could 

17 say that every in every case they are. Currently, if all 

18 an OPM did was offer, for instance, educational 

19 material, it wouldn't be considered a third party 

20 servicer, but OPMs offer all types of services to 

21 institutions, and if it falls under our definition, then 

22 it would be it would be a considered a third-party 

23 servicer. But I can ask Steve to confirm that or add to

24 it.

25 MR. FINLEY: Barmak, I guess at this 
Committee Meetings - 01/19/22

1 point, I would just say they're not categorically 

2 excluded as third-party servicers, how's that?

3 MR. NASSIRIAN: I mean, it's the 

4 language that defining them says include performing any 

5 function required by any statutory provision or 

6 applicable to Title IV of HEA. I'm assuming teaching 

7 students is a required function occasionally under the 

8 Title IV so and increasingly OPMs are not restricting 

9 their activities to administrative stuff. They're 

10 increasingly partnering with institutions to do the 

11 actual delivery of instruction. So, I would certainly 

12 hope that they are clearly included and subject to the 

13 audit requirements.

14 MS. MILLER: Thank you, Barmak, and I 

15 want to acknowledge that Carney King is has joined us 

16 back at the table representing students and student loan 

17 borrowers. I don't think I said that. Okay. Other 

18 comments? I don't see any. Greg, are we okay to move on?

19 MR. MARTIN: Sure. We could take a 

20 temperature check of the, of this, then we can move on.

21 MS. MILLER: So, could you frame the 

22 temperature check?

23 MR. MARTIN: Yeah, just so that the 

24 temperature would be on our revision here requiring the 

25 audit. A requiring that this compliance, audit and 
Committee Meetings - 01/19/22

1 financial statements by the earlier of 30 days following 

2 the day of the auditors report or six months after the 

3 after the last day of the institution's fiscal year. So 

4 basically, the temperature check would be on our 

5 addition of the language by the earlier of 30 days 

6 following the date of the auditor's report.

7 MS. MILLER: Thank you. Oh, Steve, did 

8 you want to go before9 MR. FINLEY: We just need to get back 

10 with clarification on the question of whether that's the 

11 later of the audit report or the financial statement 

12 report, or whether it's two independent dates. But we've 

13 noted the question.

14 MS. MILLER: Thank you. Okay. 

15 Temperature checks, thumbs really high on adding this 

16 language. I don't see any thumbs down. This passed. 

17 [phonetic] Okay, are we ready, Greg, to move on?

18 MR. MARTIN: I think so. Thank you 

19 very much and thank you everybody for that discussion. 

20 So, we're ready to move on to looking at Subpart L, 

21 Financial Responsibility, and we'll begin in 668.171. 

22 [Inaudible] on the screen. Okay, so looking at B, 

23 General Standards of Financial Responsibility and except 

24 as provided in paragraph H of this section the Secretary 

25 considers an institution to be financially responsible 
Committee Meetings - 01/19/22

1 if the Secretary determines that the institution's 

2 equity primary reserve and the income ratios yield a 

3 composite score of at least 1.5 under 668.172 and 

4 references the appropriate appendices there. The 

5 institution has sufficient cash reserves to make the 

6 required returns on earned Title IV HEA program funds 

7 under 668.173. And now we're looking at some changes in 

8 three. The institution is able to meet all of its 

9 financial obligations and provide administrative 

10 resources necessary to comply with the Title IV HEA 

11 program requirements. An institution is not deemed able 

12 to meet its financial or administrative obligations if 

13 it fails to make refunds under its refund policy or 

14 return of Title IV HEA program funds for which it is 

15 responsible under 668.22. And here we have added or pay 

16 Title IV credit balances as required under 668.164(h) 

17 romanette 2. Or it fails to make repayments to the 

18 Secretary for any debt or liability arising from the 

19 institution's participation in the Title IV HEA 

20 programs, and we've added it fails to make a payment in 

21 accordance with existing undisputed financial 

22 obligations for more than 90 days. It fails to make 

23 payroll obligations per its published payroll schedule. 

24 It borrows funds from retirement plans or restricted 

25 funds without authorization. Or subject to an action or 
Committee Meetings - 01/19/22

1 event described in paragraph C of this section, those 

2 are mandatory triggering events, or an action the 

3 Secretary determines likely to have a material effect on 

4 the financial obligations or financial conditions of the 

5 institution rather under Paragraph D, which is the 

6 discretionary trigger events. So, I'll open the door for 

7 discussion on that.

8 MS. MILLER: Barmak.

9 MR. NASSIRIAN: So again, focusing on 

10 the timing of and efficacy of these new additions, 

11 romanette three strikes me as the only one that might 

12 serve as an early warning system candidly by the time an 

13 institution’s failing to meet payroll or has to borrow 

14 from retirement funds again, the Department is too late. 

15 I mean, those are good triggers to our articulate 

16 [phonetic]. There's lots of others too, right? Fail to 

17 pay the payroll taxes that it has collected. That's 

18 another marker of somebody in deep trouble. So, 90 days 

19 delinquency does strike me as a meaningful early warning 

20 system, which should be preserved, but I also worry 

21 about ways in which institutions may game this. So, what 

22 happens if they take on, I don't know whether the 

23 Department has debt covenants restricting the ability to 

24 borrow, but what happens if an institution manages to 

25 basically in a Ponzi scheme, just borrow short-term in 
Committee Meetings - 01/19/22

1 order to make payments on existing debts? That's only my 

2 understanding is that only gets captured at the next 

3 audit, right? Not in real time. Am I correct? And isn't 

4 that in some ways the way to loot the corporation and to 

5 evade, leaving anything for the Department to pick up 

6 after the fact?

7 MR. MARTIN: I mean, I'll take that 

8 one back, Barmak. I'd like to talk to our financial 

9 analyst about that one, unless Steve has a comment on 

10 it. I think, yes, there is the possibility institutions 

11 could borrow to make to do these things. I would, you 

12 know, in some cases where schools are beginning to not 

13 be able to make these obligations, I would imagine that 

14 they might have difficulty borrowing at that point. But 

15 I will take that back and get a get a better answer for 

16 you regarding that. As concerns of the other elements 

17 here, I, having done compliance myself and been involved 

18 with the issue of Title IV credit balances, I feel that 

19 that the failure to make Title IV credit balances is a 

20 fairly good indicator of schools that are in trouble,

21 when schools begin to experience financial difficulties. 

22 One of the first things they start to do that they do is 

23 to find ways not to not to make those credit balances 

24 payments to students either, not at all or in other 

25 cases, simply delay them. So, I find that to be a very 
Committee Meetings - 01/19/22

1 important indicator as well.

2 MS. MILLER: Steve, do you want to 

3 weigh in? I'm sorry.

4 MR. MARTIN: Go ahead, Steve, I'm 

5 sorry.

6 MR. FINLEY: Any suggestions for 

7 additional triggers that folks would like to submit in 

8 writing, we would be happy to see and talk about. 

9 Barmak, I do appreciate what you're suggesting that some 

10 of these are much better early indicators than others, 

11 but lists like this are kind of like disclaimers that 

12 you have to sign when you're making a purchase or 

13 something. Anything that's listed in there is something 

14 that happened somewhere, and I'm sure that these come 

15 from a lot of experience over time at the Department of 

16 things that happened at schools that were strapped for 

17 cash at the time. Some are better than others at being 

18 early indicators, certainly.

19 MS. MILLER: Thank you, Steve. Brad.

20 MR. ADAMS: Yes. To add to Barmak's 

21 comment, romanette three through five, I just want to 

22 say there's a concept in accounting called materiality, 

23 and we'll never capture every single component of what 

24 may mean materially financially to a school. We're 

25 trying. We're adding these three things here, but there 
Committee Meetings - 01/19/22

1 could be many others. I think we'd be much better off 

2 with the materiality definition instead of trying to 

3 guess or assume all the different things that could end 

4 up being a material financial impact to a school. Again, 

5 these three things when they occur may or may not be 

6 material to that school, and accounting does a very good 

7 job explaining this definition. So, I'm not sure why 

8 we're trying to come up with language for every single 

9 instance of what we think could be material to a 

10 school's financial position. And we'd be much better off 

11 defining materiality and what that means than trying to 

12 come up with 30 different romanettes.

13 MS. MILLER: Thank you, Brad. David.

14 MR. SOCOLOW: Yeah, picking up on 

15 something Barmak said about romanette three and 90-day 

16 financial obligations for payroll taxes collected from 

17 their employees, state payroll taxes are due every 90 

18 days in almost every state for unemployment insurance, 

19 among other things. And you know, I don't know if the 

20 Department considers that to be included, but I would 

21 just say for the perspective of getting an early warning 

22 from a cooperative state agency that might have noticed 

23 an entity was delinquent on its obligations to the state 

24 government. That might be a source of referrals of some 

25 early warning notices, and I don't know if it would be 
Committee Meetings - 01/19/22

1 possible to. Well, first of all, do you believe that 

2 counts as a financial obligation and should we be making 

3 it explicit in this romanette? Thank you.

4 MS. MILLER: Thank you. Well, I don't 

5 see any other hands on this Greg. Would, where would you 

6 like to go next?

7 MR. MARTIN: We could take a 

8 temperature check on that because we're moving on to a 

9 new subparagraph so we could do a quick temperature 

10 check on this one.

11 MS. MILLER: Okay, so, we're taking a 

12 temperature check, thumbs high for 668.171.

13 MR. MARTIN: B. 

14 MS. MILLER: B, I'm sorry. Thumbs 

15 high. I don't see everyone's thumbs. Okay. No thumbs 

16 down on that one.

17 MR. MARTIN: Okay, we'll move on to a 

18 discussion of19 MR. FINLEY: Greg, we did20 MS. MILLER: Oh, okay.

21 MR. ADAMS: Again, back to my 

22 materiality comment. These may not be material to the 

23 individual institution [inaudible] warranted. I think a 

24 better comment would be you need to look at a 

25 materiality definition, maybe Dave could even help 
Committee Meetings - 01/19/22

1 present one to the Department.

2 MR. MARTIN: Okay. So, we're going to 

3 move on to 171(c), this is the mandatory triggering 

4 event and an institution is not able to meet its 

5 financial or administrative obligations under paragraph 

6 (b)(3) romanette five of this section, if one or more of 

7 the following occurs. So, the first one we deal with 

8 here is debts, liabilities and losses at the end of the 

9 fiscal year, for which the Secretary has most recently 

10 calculated an institution's composite score. The 

11 institution is required to pay any debt or incurs any 

12 liability from a settlement, final judgment in a 

13 judicial proceeding or determination arising from an 

14 administrative proceeding and as a result of the debts, 

15 liabilities or losses that have stemmed from those 

16 actions or events, the institution’s recalculated 

17 composite score is less than one as determined by the 

18 Secretary at the end of this section. And pointing out 

19 here that we have made a number of revisions to the 

20 mandatory triggering events and these are events that 

21 occur if they occur, will necessarily require the 

22 institution to post financial protection, such as a 

23 letter of credit. And we've adjusted this trigger to 

24 relate to a requirement to pay any debt or incur any 

25 liability from a settlement, financial judgment or 
Committee Meetings - 01/19/22

1 administrative determination. This will only require 

2 financial protection if the losses from that judgment or 

3 determination would cause the institution's composite 

4 score to fall. So, while the trigger previous referred 

5 only to post appeal determinations, we are concerned 

6 that such a significant event would be too late. The 

7 institution may already be in severe financial distress 

8 by the time the appeals are exhausted. Thus, we're 

9 proposing here to eliminate that language regarding the 

10 post hearing determination, so points out the difference 

11 between the existing language and what we are proposing 

12 here. Moving on to some other indicators, the 

13 institution is being sued for financial relief in an 

14 action brought on or after July 1, 2023 by a federal or 

15 state authority or through a qui tam lawsuit in which 

16 the federal government has intervened and the suit has 

17 been pending for 120 days or the Secretary has 

18 adjudicated claims in favor of borrowers under the loan 

19 discharge provisions in 34 CFR Part 685 and the total 

20 amount of loans discharged since July 1, 2023 is equal 

21 to or greater than five percent of the total Title IV 

22 HEA program funds received by the institution during the 

23 most recently completed fiscal year. And I will yeah, 

24 then we'll go on to, so the next one is this was debts, 

25 liabilities and losses. Next one relates to, and this is 
Committee Meetings - 01/19/22

1 still under under paragraph C. Looking at romanette two, 

2 withdraw of owner's equity for proprietary institutions 

3 whose composite score is less than 1.5. There is a 

4 withdrawal of owner's equity from the institution by any 

5 means unless the withdrawal is a transfer to an entity 

6 included in the Affiliated Entity Group on whose behalf 

7 the institution's composite score was calculated or the 

8 equivalent of wages in a sole proprietor, proprietorship 

9 or partnership or required dividend or return of 

10 capital. So, I think I'll stop there, because that's a 

11 lot and I know that we haven't covered a full paragraph, 

12 but I don't want to get too far ahead of myself because 

13 what we're covering here is fairly dense, so I'll stop 

14 there and open the floor for comments.

15 MS. MILLER: Okay, Carolyn.

16 MS. FAST: Thank you. Just in general, 

17 I'm supportive of the idea of creating these triggers, 

18 and I think this is overall a good idea. A couple of 

19 comments about how to strengthen them or make them look 

20 a little bit better, potentially. Looking at the trigger 

21 that would result in recalculation of a composite score 

22 based on the amount from a settlement, that raised some 

23 questions for me because of the concerns about the 

24 composite score itself being flawed, that perhaps just 

25 recalculating the composite score is not necessarily the 
Committee Meetings - 01/19/22

1 best approach there, perhaps and sort of like 

2 independent expert analysis would be useful to sort of 

3 review whether or not that is something that would 

4 create a financial significant financial issue. And 

5 other concern that I had with that provision was that it 

6 would only result in a consequence if the composite 

7 score was under one, which seems to be weaker than it 

8 could be because ordinarily, if a composite score was 

9 under 1.5, there would be, if I understand correctly, a 

10 consequence of financial protection. So, I was wondering 

11 why the protection would be lesser here than if I'm 

12 understanding correctly that it would be otherwise. So 

13 those are two quick points about that.

14 MR. MARTIN: So, you're suggesting 

15 that it'd be not one, it'd be at one point, you said at 

16 1.5?

17 MS. FAST: Right. And also asking 

18 whether there's a reason why it wouldn't be because it 

19 seems to me that if it's under 1.5, ordinarily that 

20 would be enough to trigger some action or consequences 

21 or however you want to look at it in terms of protecting 

22 funds.

23 MR. MARTIN: I think currently it's 

24 keyed to outright failure, but we'll take that back. 

25 I'll discuss it with our group and I [interposing] if 
Committee Meetings - 01/19/22

1 anybody else has comments on that particular aspect, 

2 you're welcome, I would welcome those as well.

3 MR. FINLEY: Let me just answer the 

4 question that she's asking, which is generally 1.5 is a 

5 passing score. But institutions that score between 1.1 

6 and 1.4 have up to three years to be in the zone, where 

7 they're not necessarily required to provide a letter of 

8 credit. They're under some heightened reporting, but 

9 they're not providing financial protection and anything 

10 a score of below 1.0 is always a failing score that 

11 requires financial protection. So, I know, the 

12 suggestion can be made that the trigger should be 

13 higher, but I'm just trying to explain why it's where it 

14 is in the proposal.

15 MS. FAST: If I may, I'd like to 

16 suggest that it be a 1.5 trigger rather than a 1.

17 MS. MILLER: Thank you. So, we have 

18 Brad, Yael, Kelli and Barmak, and we do want to cap it 

19 there because we want to move to a public comment. So, 

20 Brad.

21 MR. ADAMS: Yes, this comment relates 

22 to Section B. I'll withhold the owner's equity comment 

23 for tomorrow. The trigger, so this is about being sued 

24 by a state or federal agency. The triggering event 

25 should be things that have actually happened and had an 
Committee Meetings - 01/19/22

1 actual financial impact that can be measured. For 

2 example, I agree that if the school is paid out of 

3 material settlement, it makes sense to determine whether 

4 that settlement is material to the school's bottom line. 

5 The mere fact that the institution is being sued by an 

6 agency, well it should not. There is no way to know 

7 whether that suit will result in a liability or that it 

8 would be material to the school's finances. It's 

9 important to note here that the judicial branch, not the 

10 executive branch, hears cases and controversies in this 

11 country. Here, the Department is proposing essentially 

12 to penalize institutions if they are sued, 

13 notwithstanding the merits of the case brought by the 

14 government. Implicit in the Department's argument here 

15 is that whenever a government entity brings the 

16 complaint in court, it should be an indication that the 

17 government may succeed on its merits. But to the 

18 contrary, the government frequently loses in court. I 

19 think we should all be skeptical of the idea that 

20 institutions should be punished by the Department of 

21 education before they've had their day in court. Adding 

22 this mandatory trigger will create significant problems 

23 for institutions and will undoubtedly be over-inclusive 

24 as it as it will punish institutions that will 

25 ultimately have their name cleared in court.
Committee Meetings - 01/19/22

1 MS. MILLER: Thank you, Brad. So, we 

2 only have two minutes left before public comment, so if 

3 we can make it brief. Yael. Okay, Kelli.

4 MS. SHAVIT: Do you mind if I respond 

5 to that? I think I might have been next and my response 

6 is directly pertinent.

7 MS. MILLER: Okay.

8 MS. SHAVIT: I just want to ground 

9 this discussion in reality. This is not about punishing 

10 institutions, it's about what is an indicator of a 

11 likely precipitous closure that is going to be 

12 incredibly harmful to borrowers. And I would now like to 

13 reiterate what I said before, that access to Title IV 

14 funds is not an entitlement, but a privilege. It's our 

15 experience time and time again that by the time an 

16 institution is sued by a state agency or by a federal 

17 agency, it might already be too late. And it's a pretty 

18 good indicator of precipitous closure, and we've seen 

19 that in many examples in the actions that we've brought 

20 [phonetic]. I'd like to also note that by the time that 

21 we bring a lawsuit as agencies, we've had access to a 

22 lot of information. We have subpoena power, we have 

23 investigatory power. We don't bring lawsuits on hunches 

24 or assumptions. We bring them based on hard data. And 

25 that hard data is regularly related to the financial 
Committee Meetings - 01/19/22

1 health of the institution. I commend the Department for 

2 reincluding this mandatory trigger that was already part 

3 of previous regulations. I think it's critical for 

4 protecting borrowers.

5 MS. MILLER: Okay, thank you. We are 

6 at time because we have to get to public comments, I'm 

7 sorry, Kelli and Barmak, but you can always put it in 

8 the chat. Steve. 

9 MS. JEFFRIES: I will say this, Kelli 

10 and Barmak, we can keep note that you in that order and 

11 pick up with you first thing in the morning when we open 

12 this topic, if that's okay with you. Alright, so we'll 

13 go first with Kelli and then with Barmak and any 

14 subsequent comments.

15 MS. MILLER: Thank you for that. Okay, 

16 now it's time for public comment.

17 MR. ROBERTS: Roz, I'm admitting Kyle 

18 Southern, who's here on behalf of the Institute for 

19 College Access and Success.

20 MS. MILLER: Thank you. Hello, Kyle. 

21 How are you?

22 MR. SOUTHERN: Hi, good afternoon.

23 MS. MILLER: You have three minutes to 

24 comment, starting whenever you speak.

25 MR. SOUTHERN: Thank you. Good 
Committee Meetings - 01/19/22

1 afternoon. I'm Dr. Kyle Southern, Director of 

2 Accountability at the Institute for College Access and 

3 Success, a nonprofit, nonpartisan organization dedicated 

4 to advancing affordability, accountability and equity in 

5 higher education. At TICAS, we're encouraged by the 

6 Department's intention to reinstate the gainful 

7 employment rule because, in short, when it was in place, 

8 the GE rule worked. According to one analysis, 500 of 

9 the 767 programs identified as failing in 2017 had 

10 closed by 2018, including nearly two-thirds of for11 profit programs that failed to meet the rules' baseline 

12 standards. The performance of many for-profit career 

13 education programs demonstrates the need for the GE 

14 rule. Community colleges and other public institutions 

15 offered 61 percent of the programs covered by the 2014 

16 rule. Not-for-profit institutions offered only one-third 

17 of covered programs. Yet for-profit colleges offered 98 

18 percent of the programs that failed. Moreover, black and 

19 Latino students enrolled in a for-profit two-year 

20 program pay more than twice the cost that would pay to 

21 attend a program at a public college, and they leave 

22 with $10,000 more debt on average. Students at two and 

23 four-year for-profit colleges combined earn [phonetic] 

24 on average 83 percent more than their peers at public 

25 and nonprofit private institutions. A GE rule that 
Committee Meetings - 01/19/22

1 builds from the 2014 rule will serve as a needed 

2 backstop to prevent high cost, low-quality programs from 

3 perpetuating cycles of exploitation too often seen in 

4 this sector. Separately, this committee must resist 

5 calls to create carve-outs that would weaken what 

6 Congress intended when a bipartisan majority agreed to 

7 close the 90/10 loophole. G.I. Bill benefits are a debt 

8 we collectively owe to our neighbors who serve, not a 

9 boon to corporate bottom lines. And federal dollars are 

10 federal dollars, no matter the Department or program 

11 from which they come. Members of this committee should 

12 also all insist in the strongest possible rules to 

13 ensure the financial strength of colleges that they have 

14 the administrative capability to serve students 

15 effectively, and that profit centers for unscrupulous 

16 actors cannot masquerade as nonprofit institutions of 

17 higher education. Together with the ability to benefit 

18 and Title IV certification regulations, each of these 

19 issues represents an error on the Department of 

20 Education's [inaudible] to protect taxpayers investments 

21 in our nation students and protect students from 

22 educational harm. Thank you for your consideration of 

23 these comments and thank you all for your service.

24 MS. MILLER: Thank you, Kyle.

25 MR. ROBERTS: Okay, Roz, I am now 
Committee Meetings - 01/19/22

1 admitting Bob Shireman, who's here representing the 

2 Century Foundation.

3 MS. MILLER: Hi, Bob.

4 MR. ROBERTS: He's all connected with 

5 sound if you want to6 MS. MILLER: Hi, Bob, welcome,

7 MR. SHIREMAN: Thank you so much. 

8 Really appreciate it.

9 MS. MILLER: I'm sorry. You have three 

10 minutes for comment, starting when you speak.

11 MR. SHIREMAN: Thank you to the 

12 Department staff and to the negotiators for all of your 

13 thoughtful proposals and discussions. I would like to 

14 address the mantra that we have started to hear from the 

15 for-profit college industry with regard to this neg reg. 

16 The slogan that they have adopted is all students, all 

17 institutions, all sectors. The slogan is clearly 

18 intended to create the impression that the for-profit 

19 institutions are somehow being unfairly targeted with 

20 regulations. That is a deception. Tomorrow as part of 

21 the discussion of the change of ownership regulations, 

22 you'll be discussing the definition of a nonprofit 

23 institution of higher education institution that had 

24 generally not exhibited predatory behavior because of 

25 the restrictions on their finances and their control. 
Committee Meetings - 01/19/22

1 The original Higher Education Act excluded for-profit 

2 institutions because of the scandals that had occurred 

3 with the GI Bill in the 1940s and 50s. When for-profit 

4 institutions were added, the protection they inserted in 

5 lieu of the nonprofit requirements was the requirement 

6 that programs provide for gainful employment in a 

7 recognized occupation. Later, after the scandals of the 

8 1980s, again largely for-profits, the 85/15 requirement 

9 later changed to 90/10 was added. GE and 90/10 

10 requirements are part of a deal that an institution 

11 signs up for when it decides it wants federal 

12 entitlement funds. You can forgo the nonprofit 

13 prohibition on owners or anyone extracting profit from 

14 the institution, which changes the incentives behind 

15 every management decision that an institution makes. You 

16 can ignore the requirement that all of the revenue must 

17 return to the institution and to its educational 

18 mission. You can place control of the institution in the 

19 hands of people who personally profit, even though even 

20 though it is more effective to rely on trustees who have 

21 no such financial conflict of interest, you can refuse 

22 to comply with those regulations, but instead you must 

23 comply with the other rules that attempt to take their 

24 place. Helping to assure that students and taxpayers get 

25 value given the incentive at a for-profit institution to 
Committee Meetings - 01/19/22

1 spend less on education and incentive that nonprofit 

2 institutions do not have because of the regulations that 

3 apply to them. These substitute regulations, I must 

4 emphasize [audio] often as effective at preventing 

5 consumer abuses, has half the public and nonprofit 

6 requirements. If those rules that apply to all 

7 institutions, we would have avoided most of the fraud 

8 and abuse scandals of the past. I urge the for-profit 

9 industry to abandon its deceptive all fall all slogan. 

10 It is disingenuous. It is a misrepresentation. It is 

11 misleading in the same way that predatory colleges try 

12 to trick students into enrolling in programs that are 

13 not really right for them. Thank you so much.

14 MS. JEFFRIES: Thank you, Bob.

15 MR. ROBERTS: Alright, Roz, I just 

16 admitted Mr. Dan Mahoney, who is representing himself.

17 MS. MILLER: Hi, Dan.

18 MR. MAHONEY: Hello.

19 MS. MILLER: You have three minutes to 

20 comment, starting when you speak.

21 MR. MAHONEY: Great. Thank you. 

22 Thanks, everybody. I want to speak in defense of 

23 protecting borrowers from institutions. In 2003, it was 

24 both the best year of my life and the worst. The best 

25 year of my life because my wife gave birth to our first 
Committee Meetings - 01/19/22

1 child, the worst because my wife and I consolidated our 

2 student loans into FFEL spousal consolidation loans. 

3 Maybe the worst mistake of our lives. Spousal 

4 consolidation because both of us had graduate degrees in 

5 the arts. We decided that having one payment would be 

6 probably a good idea for a while until we earned more 

7 money to be able to pay larger sums on our loans. It had 

8 been, the consolidation program had been in existence 

9 since 1993. In 2006, the Department of Education decided 

10 to do away with the program. They had 13 years of 

11 numbers of data and decided that these were these loans 

12 were bad bets. They were going into default. There was 

13 divorce happening. They were unable to collect what they 

14 needed to collect. So, the Department of Education 

15 stopped the program. But for those of us who were 

16 already in the program and had these loans, we were just 

17 left swinging in the wind. So, the institution I need 

18 protection from, it seems, is the Department of 

19 Education. This is an untenable position to admit that 

20 something didn't work, but then leave the people who are 

21 already in this, in these loans, in them. It was always 

22 too risky. It was always a bad bet. And my guess is that 

23 there's the information to prove that if you just look. 

24 In 2011, both my wife and I started working for a 

25 nonprofit institution here in Maine. We found out about 
Committee Meetings - 01/19/22

1 Public Service Loan Forgiveness. We contacted our 

2 student loan servicer, Navient. They said we qualified. 

3 Every year, I called back. Every year, I got, well, 

4 three years in a row. I got, yes, you qualified, 

5 everything is great. You're in Income Based Repayment. 

6 It's all working out. On the fourth year, someone said, 

7 no, you have the wrong type of loan; spousal 

8 consolidations do not count. They suggested I call 

9 Studentaid.gov. [Audio] So we went to studentaid.gov who 

10 said, yeah, all you have to do is contact Navient and 

11 they can switch the loans to direct loans. Navient then 

12 said, no, we can't do that. You got to talk to 

13 studentaid.gov, they can help you. Then studentaid.gov 

14 referred us back to Navient. It's this endless cycle 

15 that we can't get out of. We've even had a lawyer 

16 suggest we get a divorce, and maybe that could help.

17 MS. JEFFRIES: I'm sorry, Daniel, your 

18 time is up.

19 MR. MAHONEY: Okay, thank you so much.

20 MR. MAHONEY: Thank you.

21 MR. ROBERTS: Roz, I'm admitting 

22 Jonelle Daughtry, who's a veteran representing 

23 themselves. It looks like they might be stuck joining, 

24 so I'm going to admit the next speaker and then I'll 

25 message a message them, so I'm now admitting Joe Louis 
Committee Meetings - 01/19/22

1 Martinez, who is representing himself.

2 MS. MILLER: Hi, Joe, welcome. 

3 [Inaudible] connect to the audio there.

4 MR. ROBERTS: Why don't I admit the 

5 next speaker and I'll also, wait, he should be able to 

6 hear us now.

7 MS. MILLER: Okay, welcome Joe. You 

8 have three minutes, beginning when you speak.

9 MR. ROBERTS: Now, I think he's still, 

10 I'll message him. I think he's having some audio issues, 

11 but I will now admit Mr. Joe Gent, who is the director 

12 of Alternative Distance Adult and pre-K education for 

13 the Nye County School District.

14 MS. MILLER: Okay, welcome Joe Gent. 

15 You have three minutes to comment, starting when you 

16 speak. Are we on mute?

17 MR. GENT: Better.

18 MS. MILLER: Yes.

19 MR. GENT: Okay. I apologize for that. 

20 Thank you for your public service. My name is Joe Gent. 

21 I'm a Marine Corps officer, combat veteran of the global 

22 war on terrorism. I'm also a three-time graduate of all 

23 nine universities and a practicing educator. I currently 

24 serve as the director of Alternative Distance Adult and 

25 pre-K education in Nye County School District in Nevada. 
Committee Meetings - 01/19/22

1 I have experienced distance learning from both a 

2 personal and professional perspective. So, after I left 

3 to the Marine Corps, I decided to go back to school to 

4 advance my career, but I had to work full-time to 

5 support my family. So, a brick and mortar university was 

6 not an option for me. After completing three degrees 

7 online in a virtual environment, I can say with 

8 confidence that my fellow classmates chose this platform 

9 because they were in a similar position as I was. They 

10 simply couldn't manage a career while attending a 

11 traditional brick and mortar university. That model is 

12 frankly not suited for everyone, especially veterans who 

13 entered their education as working adults after years of 

14 serving in the military and transitioning to civilian 

15 life. In my opinion, veterans already have enough 

16 barriers to education, and the 90/10 rule is one of 

17 them. While I was at the University of Phoenix, I 

18 personally was honored to receive a full ride 

19 scholarship to complete my doctorate. But I know that's 

20 not the case for all veterans. Some have to use their 

21 Montgomery GI Bill to afford their education. That's why 

22 I think it's crucial you consider the true impact the 

23 90/10 rule would have on veteran students. The Marines 

24 and sailors who served in a combat zone with me risking 

25 their life and limb numerous times, these same service 
Committee Meetings - 01/19/22

1 members who we entrust to care for the lives of each 

2 other and maintain millions of dollars worth of 

3 equipment, we, my fellow veterans and I should be 

4 allowed, we should be entrusted to use our hard earned 

5 and well-deserved education benefits where we choose. I 

6 ask you to create regulations fairly for all students, 

7 especially for my fellow brother and sister veterans 

8 transitioning to civilian life and consider the impact 

9 the 90/10 rule will have on them. Thank you again for 

10 the opportunity to address you today.

11 MS. MILLER: Thank you, Joe. Okay.

12 MR. ROBERTS: I think Jonelle is on 

13 and should be able to come off of mute and address the 

14 committee.

15 MS. JEFFRIES: Okay, thank you.

16 MS. DAUGHTRY: I can hear you. Good 

17 afternoon. I'm good. Good afternoon, my name is Jonelle 

18 Daughtry [phonetic] and I'm a veteran. I started 

19 pursuing a Ph.D. in Sports and Performance Psychology in 

20 2014 at University of the Rockies. In 2018, University 

21 of the Rockies became part of Ashford University, which 

22 recently became University of Arizona Global Campus. I 

23 told the recruiter that I already used most of my GI 

24 bill for my bachelor's and master's degree. With that 

25 knowledge, the school promised me that they would 
Committee Meetings - 01/19/22

1 provide yellow ribbon and other funding to make up for 

2 any shortfall after my GI Bill was used. This promise 

3 plays a significant role in my decision to go to 

4 University of the Rockies because I was concerned about 

5 financing my Ph.D. As it turned out, my GI Bill only 

6 covered two classes. Contrary to their initial promise, 

7 the school has refused to provide the additional funding 

8 and I had to take out student loans to continue my 

9 education. Although the school told me they would 

10 provide all necessary resources for my dissertation, 

11 they have fallen short in every possible way. My school 

12 has not provided feedback on my writing and instead told 

13 me to hire a professional editor to review my work. 

14 Besides having access to the school library, I am 

15 practically left on my own to work on my dissertation. 

16 My program requires me to fly to Colorado for in17 residence programs every year. I have attended the 

18 program three times so far, and each trip costs a 

19 thousand dollars, which I paid out of pocket. Since the 

20 Colorado program is necessary for my degree, I had 

21 naturally believed it would be covered by whatever 

22 funding the school initially promised me. My ability to 

23 make progress towards my degree is also thwarted by a 

24 constant change of dissertation advisors. Each time my 

25 advisor has changed, I was instructed to start my 
Committee Meetings - 01/19/22

1 dissertation completely from scratch. I have been in the 

2 Ph.D. Program for almost eight years with no progress to 

3 show for it. Nevertheless, the school has always pushed 

4 me to keep up with the program, despite providing me 

5 none of the resources I need. I was also promised a 

6 military discount, which I never saw. The school kept 

7 adding charges to my account, and no one would give me 

8 an explanation because there is a constant turnover in 

9 staff at the school. I currently have about $200,000 in 

10 PLUS and graduate PLUS loans because of Ashford and 

11 University AGC. I feel like the school is keeping me in 

12 the program just to continue changing charging [audio] 

13 even though my school. I have one more sentence sorry.

14 MS. JEFFRIES: Okay, that's okay, go 

15 ahead. 

16 MS. DAUGHTRY: So sorry. Even though 

17 my school has changed names and corporate ownership 

18 twice since I started, the quality of instruction and 

19 disregard of student interest has never improved. I hope 

20 the Education Department will develop new rules to 

21 ensure that only schools with high quality instructional 

22 practices are entitled to receive federal student aid 

23 funding. Thank you very much for hearing my comments and 

24 my situation.

25 MS. MILLER: Thank you, Jonelle. 
Committee Meetings - 01/19/22

1 Brady, who's up next?

2 MR. ROBERTS: I am re-admitting Mr. 

3 Joe Martinez, who was having some audio issues when he 

4 first joined and should be and should be okay to speak 

5 once he's on now. Looks like he's on. His video might 

6 still be having some issues, but audio might improve.

7 MS. MILLER: Joe, welcome. You have-. 

8 MR. ROBERTS: He's still connecting. 

9 He's still connecting to the audio. I'm going to message 

10 him again and see if I can work it out, but in the 

11 meantime, I'm going to admit Liz King, who's the senior 

12 director at the Leadership Conference on Civil and Human 

13 Rights.

14 MS. MILLER: Sorry about that. You 

15 have three minutes to comment, starting when you speak.

16 MR. ROBERTS: Oh, Ms. King, I think 

17 that you're muted right now.

18 MS. KING: Oh, sorry, is it my turn?

19 MR. ROBERTS: Yes.

20 MS. KING: Oh, sorry, my name is Liz 

21 King and I'm the senior director of the Education Equity 

22 Program at the Leadership Conference on Civil and Human 

23 Rights in Washington, DC. We are a coalition charged by 

24 our diverse membership of more than 230 national 

25 organizations to promote and protect the civil and human 
Committee Meetings - 01/19/22

1 rights of all persons in the United States. I wanted to 

2 first thank the committee for accepting the nomination 

3 of Amanda Martinez, UnidosUS to serve as a negotiator on 

4 behalf of the civil rights community and to acknowledge 

5 Jaylon and Herbin and the Center for Responsible Lending 

6 for their long-standing commitment to racial justice, 

7 equal opportunity and consumer protection. I must also 

8 share profound disappointment that the Department did 

9 not include a dedicated civil rights community 

10 negotiator when the committee was originally created. 

11 The primary measure of the success of this committee, 

12 and if any regulation or policy to implement and enforce 

13 the Higher Education Act is whether the actions advance 

14 equity and higher education and protect students from 

15 discrimination. At its core, the purpose of the HEA is 

16 to expand access and opportunity in higher education. 

17 This law was created in the height of the civil rights 

18 movement and at the demands of those communities, black, 

19 Latino, Native American, Asian American and LGBTQ 

20 people, women, religious minorities and people with 

21 disabilities who were shut out of higher education and 

22 the pathway it created to full participation in the 

23 social, political and economic life of the country. The 

24 very issues before this committee, whether students will 

25 be protected from high cost, low quality institutions, 
Committee Meetings - 01/19/22

1 whether institutions will have to prove their value 

2 before participating in federal aid programs and whether 

3 the federal government will meaningfully exercise its 

4 oversight responsibilities, are fundamentally urgent 

5 questions of racial and gender justice. Black and Latino 

6 students are overrepresented in for-profit colleges 

7 where all students are much less likely to graduate and 

8 far more likely to default on their student loans than 

9 students at public and private nonprofit schools. Black 

10 and Latino for profit students leave with $10,000 more 

11 debt on average than their peers attending a public two12 year program. The civil rights community has repeatedly 

13 raised the alarm about the need for aggressive 

14 regulation in this area. I am happy to share with this 

15 committee our policy brief, gainful employment, a civil 

16 rights perspective, as well as our civil rights 

17 principles. [Audio] As this committee continues its 

18 important work, I urge you in the strongest of terms to 

19 see the stakes of these decisions for what they are. We 

20 have an obligation to ensure that the determination to 

21 pursue an education at any cost does not, in fact, cost 

22 them everything. Thank you.

23 MS. MILLER: Thank you, Liz. Joe, are 

24 you with us?

25 MR. MARTINEZ: Yes. Can you hear me?
Committee Meetings - 01/19/22

1 MS. MILLER: Yes. You have three 

2 minutes to comment, starting when you speak.

3 MR. MARTINEZ: Okay, thank you. I'm 

4 sorry for the technical difficulties, but so, first off, 

5 my name is Joe Louis Martinez, and I thank you guys for 

6 the opportunity to share my story and point of view of 

7 higher education today, more specifically on the 90/10 

8 rule. I'm a veteran, and I served in the military for 11 

9 years. Eventually, I earned my GI Bill and decided to 

10 use these benefits to go back to school. At that time, 

11 my daughter had just moved in with me in the night when 

12 she was in the ninth grade. I'm not knowing anything 

13 about this, so I wanted to set a good example for her, 

14 not only her, but for my family. So, in doing so, the 

15 typical university was not an option for me. I was 

16 working full-time at the Veterans Hospital here in 

17 Albuquerque, New Mexico. On top of that, I was taking 

18 care of my mother full-time and then my daughter moved 

19 in so that that really puts a lot of pressure on a young 

20 man when going through that. Therefore, the University 

21 of Phoenix was the best fix for my situation, it allowed 

22 me, gave me the best option. The university created a 

23 flexibility and an inclusive environment for me and 

24 other students from all types of lifestyles. And it was 

25 especially supportive of a veteran student. There needs 
Committee Meetings - 01/19/22

1 to be more policies that support universities like the 

2 Phoenix that create accessibility environments for 

3 veteran students like myself. Eventually, I graduated in 

4 2015 and got my MBA. It was, this wouldn't have been 

5 possible at a typical brick and mortar university that 

6 only offers in-person classes or classes during the day. 

7 I deserve the opportunity to set myself and my family up 

8 for success. And with the master's degree under my belt 

9 and having it entirely paid off and advanced my career 

10 in IT. And I worked in the industry for many years now. 

11 Please consider my story as a veteran who benefited from 

12 the GI Bill and consider the 90/10 rule and how it will 

13 impact veterans like myself. I know that I'm not the 

14 only one. And again, I want to thank you for your time. 

15 That's all I got.

16 MS. MILLER: Thank you, Joe. Brady, do 

17 we have any more?

18 MR. ROBERTS: We do, I'm now admitting 

19 Joseph Sharpe, who's here speaking on behalf of the 

20 American Legion. He should be able to hear you. He has 

21 his video turned off, but.

22 MR. SHARPE: Hello.

23 MS. MILLER: Welcome, Joseph. You have 

24 three minutes, starting when you speak.

25 MR. SHARPE: Okay, thank you. On 
Committee Meetings - 01/19/22

1 behalf of the national commander Paul Diller and the 

2 nearly two million members of the American Legion. We 

3 thank the Department of Education for inviting us to 

4 speak on 90/10 and gainful employment at this public 

5 hearing today, ensuring that service members obtain 

6 quality education during and after their time in 

7 uniform. It's a top priority for the American Legion. 

8 Every veteran deserves the right to an education that 

9 provides them with the skills and experience needed to 

10 find gainful employment in the 21st century labor 

11 market. Many veterans have successfully utilize the GI 

12 Bill benefits to seek gainful employment in their 

13 desired industries. However, others have unfortunately 

14 fallen victim to unscrupulous actors who have taken 

15 advantage of the old 90/10 interpretation of the U.S. 

16 education law, whereby GI Bill education benefits 

17 counted as private dollars outside of Title IV Federal 

18 Student Aid programs. Given that taxpayers spent more 

19 than 150 billion on federal financial aid and 11 billion 

20 on GI Bill benefits annually, the American Legion is 

21 concerned with safeguarding federal taxpayer stewardship 

22 and ensuring public funds are supporting reputable 

23 institutions of higher learning. Numerous laws passed in 

24 recent years, including the Harry W. Colmery Act of 2017 

25 and the Isakson Roe Act of 2020, seek to combat the 
Committee Meetings - 01/19/22

1 ability of these malicious institutions to swindle the 

2 nation's veterans into overpriced and underperforming 

3 programs that fail to provide the necessary training and 

4 skills needed to succeed in today's job market. The 

5 American Legion stresses the need for risk-based systems 

6 to ensure students do not graduate from institutions of 

7 higher learning facing diminished or negative job market

8 returns. While serving on the Advisory Council for the 

9 Risk Based Survey RBS model, The American Legion pushed 

10 for its development, advocating tirelessly to ensure 

11 that it becomes the standard practice when evaluating 

12 higher education institutions that use the GI Bill. The 

13 American Legion's commitment to supporting the model is 

14 codified in our Resolution Number 11 GI Bill risk-based 

15 survey whereby the American Legion requests the federal 

16 government promptly adopt [Audio] the RBS program to 

17 protect our veterans, servicemembers, and the GI Bill. 

18 And finally, the American Legion looks forward to the 

19 implementation upscaling of the RBS model later this 

20 year and request that the U.S. Department of Education 

21 upholds its current interpretation of 9/10 and enforce 

22 accordingly. We thank the U.S. Department of Education 

23 for their diligence in this matter and for their efforts 

24 to provide quality [Audio] opportunities for our service 

25 members and veterans. Thank you.
Committee Meetings - 01/19/22

1 MS. JEFFRIES: Your three minutes are 

2 up. Thank you.

3 MR. ROBERTS: I'm admitting Matthew 

4 Feehan, who is representing himself.

5 MS. MILLER: Hi Matthew. 

6 MR. FEEHAN: Hi there, can you hear me 

7 alright? 

8 MS. MILLER: Yes, you have three 

9 minutes starting when you speak.

10 MR. FEEHAN: Beautiful, thank you for 

11 your time. Good afternoon, honorable members of this 

12 committee, it is my distinct pleasure to offer feedback 

13 towards these proposed rules that in all likelihood will 

14 affect student veterans and student service members. My 

15 name is Matthew Feehan. I'm a disabled U.S. military 

16 veteran, a graduate of Western New England School of 

17 Law, a graduate student at the University of Texas Rio 

18 Grande Valley, go Vaqueros. A former honors law clerk 

19 for the U.S. Department of Justice and committee member 

20 of the Academic Research and Education Technology 

21 Committee at UTRGV. And finally principal at Feehan and 

22 Associates. First, I'd like to start off by 

23 acknowledging the ongoing outstanding work of our 

24 primary representative Iraq and Veterans of America and 

25 of our secondary representative Veterans Education 
Committee Meetings - 01/19/22

1 Success, both organizations have done an outstanding job 

2 for student veterans and student service members. Next 

3 on some of the regulatory issues raised thus far and 

4 will likely come up this week, IAVA and VES in this 

5 particular area do not speak for me and my interest. 

6 This agreement is all but natural. However, I'm 

7 concerned that my fellow brothers and sisters in uniform 

8 may not be best represented here today, and I encourage 

9 this committee to increase its student veteran 

10 representation, particularly because the GI Bill is a 

11 benefit garnered by all sectors of the postsecondary 

12 education system that includes for-profit, nonprofit and 

13 public institutions. My general feedback pertains to the 

14 90/10 rule, Ability to Benefit certificate, 

15 certification procedures, change of ownership and change 

16 control, financial responsibility, gainful employment 

17 and standards of administrative capability. Contrary to 

18 Partisan lobbyists and think tanks misrepresentations, 

19 many of the aforementioned regulations do not solely 

20 address for-profits. In fact, financial responsibility 

21 cited by statute Section 498 of the HEA and 34 CFR 668 

22 addresses both for-profits, non-profits and public 

23 educational institutions, and ironically, they're 

24 delineated by subpart. If the Massachusetts Attorney 

25 General's Office is office's argument is correct, that 
Committee Meetings - 01/19/22

1 filing a lawsuit essentially means that won the lawsuit, 

2 and that's an indicator for a triggering event, then 

3 following that same logic, I would offer to this 

4 committee that we should add GI Bill school feedback 

5 tool complaint to triggering events. The triggering 

6 events I would suggest would be five or more student 

7 veteran complaints raised at the tool should be a 

8 triggering event. In addition, a teach out plan is not a 

9 plan. It is far from stable, as many lobbyists think 

10 tanks argue. For educational institutions near to 

11 implementation of a teach out plan, we should change the 

12 word from submit to publish. Currently, the language 

13 says to submit the teach out plan14 MS. JEFFRIES: Matthew, your time is 

15 up.

16 MR. FEEHAN: Thank you, ma'am. Thank 

17 you for your time. 

18 MR. ROBERTS: Alright, Roz, our final 

19 speaker for the day is Ashlynne Hancock or Haycock, 

20 excuse me, who was the deputy director for policy and 

21 legislation at the Tragedy Assistance Program for 

22 Survivors.

23 MS. MILLER: Hi Ashlynne.

24 MR. HAYCOCK: Thank you.

25 MS. MILLER: You have three minutes 
Committee Meetings - 01/19/22

1 starting when you speak.

2 MR. HAYCOCK: Thank you. Good 

3 afternoon. My name is Ashlynne Haycock and I serve as 

4 the deputy director of policy at the Tragedy Assistance 

5 Program for Survivors. I come to you today to stand up 

6 for the over 100,000 families of fallen heroes that TAPS 

7 represents, many of whom have or will use education 

8 benefits from the Department of Veterans Affairs. We 

9 stand here today to call on the Department of Education 

10 to ensure strong implementation of the new law to close 

11 the 90/10 loophole. As you know, the 90/10 loophole 

12 resulted in targeting of our community by aggressive and 

13 deceptive marketing. Countless veterans, families, 

14 caregivers and survivors are seen as nothing more than 

15 dollars signs in uniform and have had their lives 

16 financially ruined because of this loophole. We thank 

17 bipartisan members of Congress for listening to us and 

18 finally closing the 90/10 loophole. At TAPS, we are 

19 especially concerned with the discussion that funds paid 

20 directly to the students will not be included in the 

21 final calculation. While most people generally just 

22 think of the [inaudible] portion of the post-9/11 GI 

23 Bill, when discussing it, they forget that Chapter 35 

24 benefits are paid the same way. This proposal will take 

25 the target off of the backs of veterans and place it on 
Committee Meetings - 01/19/22

1 a much more vulnerable population than of caregivers and 

2 survivors. Between a significantly lower payment rate of 

3 Chapter 35 benefits and the responsibilities of a 

4 veteran caregiver have, they generally have 

5 significantly less options for institutions of higher 

6 learning than this as most choose an online program with 

7 flexibility around the needs of their families. The same 

8 goes for surviving spouses, who tend to also choose 

9 online programs with flexibility, as many of them are 

10 single parents and online programs tend to fit better 

11 with limited childcare needs. This makes them prime 

12 targets for predatory for-profit programs that market on 

13 flexibility. Closing the loophole was supposed to help 

14 protect them. Not including funds paid directly to 

15 students will instead put an even larger target on their 

16 backs. We strongly encourage the Department of Education 

17 to include both Chapter 35 and Montgomery GI Bill 

18 benefits in the final calculation for 90/10. At TAPS, we 

19 have not come to these positions lightly, and we stand 

20 unwavering in our commitment as it has a significant 

21 impact on those we serve. Thank you for the time to 

22 present our views and please reach out to us if you have 

23 any clarifying questions. Thank you.

24 MS. MILLER: Thank you, Ashley. Brady, 

25 does that conclude our public commenters for the day?
Committee Meetings - 01/19/22

1 MR. ROBERTS: That does. Thank you, 

2 everyone.

3 MS. MILLER: Okay. Greg, do you have 

4 any final comments?

5 MR. MARTIN: No, no other than just to 

6 thank everybody for what I felt was a very productive 

7 day and say how much we appreciate all the, everything 

8 we've heard and I look forward to seeing everybody 

9 tomorrow. Thank you very much.

10 MS. MILLER: Alright. Thank you, 

11 everyone. We'll pick up where we left off tomorrow.

12 MS. JEFFRIES: See you in the morning, 

13 everyone.

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Committee Meetings - 01/19/22

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Committee Meetings - 01/19/22

1 Appendix

2 

3 Department of Education, Office of Postsecondary Education 

4 Zoom Chat Transcript 

5 Institutional and Programmatic Eligibility Committee 

6 Session 1, Day 2, Afternoon, January 19, 2021 

7 

8 

9 From Ashley Schofield (A) - MSIs to Everyone: 

10 I am at the table for Beverly. 

11 From Sam (P) Fin Aid Admin to Everyone: 

12 David Peterson is in for Sam Veeder for Financial Aid 

13 Professionals 

14 From Jamie Studley (P) Accrediting 

15 Agencies to Everyone: 

16 The question Brad proposed be subject to a temp check 

17 not only has no text or reference to authority, and also 

18 has not been directly discussed by negotiators. 

19 From Brad Adams (P - Proprietary 

20 Institutions) to Everyone: 

21 Thank you Iwill submit the question to Cindy via 

22 email. My request is simply asking whether we should or 

23 could use a different statutory authority in Direct Loan 

24 agreement quality assurance authority in Sec. 453 of the 

25 HEA, and apply that 2014 GE debt to earnings metrics in the 

26 prior rule to all institutions 

27 From Yael Shavit to Everyone: 

28 +1 to Barmak 

29 From Ernest Ezeugo (P), Students/Student Loan 

30 Borrowers to Everyone: 

31 +1 Barmak, especially on preventing victimization. 

32 From Anne Kress (P) Comm Colleges to Everyone: 
Committee Meetings - 01/19/22

1 +1 to Jamie’s point about positions where higher ed 

2 has no impact over wages and employment requirements—so our 

3 only strategy is to keep costs low

4 From Brad Adams (P - Proprietary 

5 Institutions) to Everyone:

6 I support measures on addressing programs with low7 income outcomes

8 From Debbie Cochrane (P), State agencies to Everyone:

9 +1 with Jamie on the need to look at the data for the 

10 various options are we discussing and be mindful of 

11 impacts.

12 From Laura Rasar King (A) Accrediting 

13 Agencies to Everyone:

14 +1 to Jamie re: low-income occupations that serve 

15 critical public needs. This has a disproportionate impact 

16 on community colleges.

17 From Jamie Studley (P) Accrediting 

18 Agencies to Everyone:

19 Other negotiators have captured my question: what 

20 might be the effect if the rules were to have consequences 

21 for low-income when the debt-to-income ratio is not 

22 problematic? Can we address the risks for programs in low23 income fields by the allowable level we set (maybe 

24 comparisons to peers in the field--consequences for the 

25 lowest outliers in that field?).

26 From Brad Adams (P - Proprietary 

27 Institutions) to Everyone:

28 Did my voice sound muffled to anyone else? I am not 

29 sure what changed on my end.

30 From Barmak Nassirian (A) Servicemembers & 

31 Vets to Everyone:
Committee Meetings - 01/19/22

1 Brad, I could hear you fine

2 From Jamie Studley (P) Accrediting 

3 Agencies to Everyone:

4 Brad, you did seem a little muffled to me, perhaps you 

5 were sitting back away from your mic.

6 From Johnson Tyler, Brooklyn Legal 

7 Services to Everyone:

8 +1 on Barmak and Ernest on a short corrective period 

9 for schools who fail GE.

10 From Carolyn Fast (P), Consumer Advocates/Civil Rights 

11 Organizations to Everyone:

12 +1 to Ernest's comment that it is important to think 

13 about how delays in consequences for failures harms 

14 students

15 From Brad Adams (P - Proprietary 

16 Institutions) to Everyone:

17 Thank you all for your feedback

18 From Jamie Studley (P) Accrediting 

19 Agencies to Everyone:

20 Using more than one year is often reasonable, but 

21 these time horizons may be longer than needed. + 1 to 

22 Debbie's suggestion about looking at the patterns in 

23 setting that timing.

24 From Adam Looney (Advisor) to Everyone:

25 Earnings (and student loan repayment rates) three 

26 years after leaving school have been shown to be broadly 

27 representative of such outcomes over the longer run. (I 

28 could provide some citations to that effect.) Obviously, 

29 earnings continue to rise over time, but after three years 

30 you have a good sense of the relative performance of 
Committee Meetings - 01/19/22

1 students from different programs and earnings that are 

2 stable thereafter.

3 From Johnson (P) Legal Aid to Everyone:

4 I think there was an appeal process on GE findings in 

5 early regs that addressed due process concerns on metrics 

6 accuracy

7 From Emmanual Guillory (A)-PNPs to Everyone:

8 The 2014 rule will prohibit Title IV eligibility for 

9 programs if they failed the debt-to-earnings metrics for 2 

10 out of 3 consecutive years and cannot reapply for 

11 reinstatement for three calendar years.

12 From Jamie Studley (P) Accrediting 

13 Agencies to Everyone:

14 Greg, could you briefly explain "that figure" in (a) -

15 - how detailed was the reporting, debt per student using 

16 that definition or something more?

17 From Emmanual Guillory (A)-PNPs to Everyone:

18 There was also an ability to appeal draft debt-to19 earnings rates

20 From Emmanual Guillory (A)-PNPs to Everyone:

21 And there was an ability to appeal the completers 

22 list

23 From Barmak Nassirian (A) Servicemembers & 

24 Vets to Everyone:

25 +1 on Brad's point about automating the process as 

26 much as possible

27 From Emmanual Guillory (A)-PNPs to Everyone:

28 Adam, can you share data comparing 5 years of earnings 

29 to 3 years of earnings? It seems as though 5 years would be 
Committee Meetings - 01/19/22

1 a better representation, but I do understand wanting to 

2 administer the debt-to-earnings ratio as soon as possible.

3 From Debbie Cochrane (P), State agencies to Everyone:

4 On (a), I believe reporting of those figures (to use 

5 the cap) was voluntary. Does the Department have 

6 information on (1) how many institutions/programs made use 

7 of the cap and (2) whether use of the cap impacted outcomes 

8 under the established metrics?

9 From Anne Kress (P) Comm Colleges to Everyone:

10 +1 to Brad’s call for automation. I’d add that These 

11 accountability issues are really an argument for the 

12 College Transparency Act or a unit record data system—a 

13 long term solution. But one unrelated to our current 

14 negotiations.

15 From Brad Adams (P - Proprietary 

16 Institutions) to Everyone:

17 +1 to Emmanual's salary request difference of 5 vs 3 

18 years. I would also like to add if using an average annual 

19 salary over multiple years would be better than 1 year.

20 From Adam Looney (Advisor) to Everyone:

21 Regarding concerns about "low-earning" professions, I 

22 can help find some data to that effect, but I think as it 

23 regards earnings itself, those concerns are likely 

24 misplaced. Based on the data used to inform the original 

25 2014 rulemaking, the programs whose students earned less 

26 than a high school graduate are overwhelmingly 

27 undergraduate certificate programs and AA programs in 

28 fields like cosmetology, massage therapy, or office 

29 assistant programs. Moreover, in the vast majority of these 

30 fields there are alternative programs that would pass the 

31 rule and thus be available to students. For debt-to32 earnings, I would have to pull more data.
Committee Meetings - 01/19/22

1 From Jamie Studley (P) Accrediting 

2 Agencies to Everyone:

3 Adam: that would be helpful, and it would be 

4 reassuring if what you speculate is the case.

5 From Jamie Studley (P) Accrediting 

6 Agencies to Everyone:

7 + 1 Yael about including instit and private debt

8 From Carolyn Fast (P), Consumer Advocates/Civil Rights 

9 Organizations to Everyone:

10 +1 w/Yael the inclusion of institutional and private 

11 loan debt

12 From Ernest Ezeugo (P), Students/Student Loan 

13 Borrowers to Everyone:

14 Adding this late, but also giving a +1 to Yael re: 

15 including institutional and private loan debt.

16 From Adam Looney (Advisor) to Everyone:

17 On the 3 versus 5 year, some data points. One 

18 observation is that with a 5-year delay, the timeline 

19 between enrolling a student, having them complete the 

20 program, having the student spend 5 years in the labor 

21 market, observing their earnings administratively (which 

22 occurs with a lag), and then potentially sanctioning the 

23 program, it would take close to a decade between when a 

24 student enrolled and when the Department could determine 

25 their program had failed them.

26 From Jamie Studley (P) Accrediting 

27 Agencies to Everyone:

28 +1 to David's broad point about trying to use the same 

29 metrics when possible, to allow for data quality (easier to 

30 get the definition and data right if there are fewer 

31 different ones), and also comparability as well as burden 

32 issues
Committee Meetings - 01/19/22

1 From Adam Looney (Advisor) to Everyone:

2 Regarding the stability of metrics between 3 and 5 

3 years after enrollment, this paper 

4 (https://www.brookings.edu/wp5 content/uploads/2020/11/20210603-Mats-Turner.pdf) 

6 summarizes the evidence as follows:

7 From Adam Looney (Advisor) to Everyone:

8 "Both of the metrics we propose involve outcomes 

9 measured three years after students have left a program, a 

10 point in time when earnings and loan repayment outcomes 

11 have been shown to be broadly representative of such 

12 outcomes over the longer run (Chetty et al. 2017; Chou, 

13 Looney, and Watson 2017)."

14 From Adam Looney (Advisor) to Everyone:

15 "Among a cohort of students enrolled in two-year 

16 colleges and “non-elite” four-year colleges, Chetty et al. 

17 (2017) find that students’ rank in the earnings 

18 distribution stays is relatively constant between the ages 

19 of 25 and 36. Students at more elite colleges experience 

20 steep increases in earnings ranks between 25 and 30, and 

21 then stabilize. The data are not perfectly comparable to 

22 those that would be used in the proposed accountability 

23 metrics but provide some evidence that for non-elite 

24 institutions measuring earnings 3 years after program exit, 

25 when most students will be near or over the age of 25, will 

26 provide an accurate ranking of students’ labor market 

27 outcomes across programs over the longer-run. The Chetty et 

28 al. (2017) data are based on older cohorts of students 

29 enrolled between 1999 and 2000 while near the age of 20. By 

30 construction this omits older, independent students, who 

31 comprise a larger share of “non-elite” colleges."

32 From Adam Looney (Advisor) to Everyone:

33 "It is not clear whether these patterns are 

34 representative of all students at such institutions. With 
Committee Meetings - 01/19/22

1 respect to loan repayment, institutional 3-year loan 

2 repayment rates are highly correlated with long-run 

3 repayment outcomes (Chou, Looney, and Watson 2017). Using 

4 supplemental data from the 2009 and 2010 repayment cohorts 

5 (provided by the Senate HELP Committee to the authors, upon 

6 request), we estimate that over 95 percent of institutions 

7 would have the same repayment rate status (e.g., pass or 

8 fail) at 5 years after repayment entry as they would at 3 

9 years and, when weighted by cohort balances at repayment 

10 entry, more than 99 percent of institutions would have the 

11 same status at 3 and at 5 years post-repayment entry."

12 From Adam Looney (Advisor) to Everyone:

13 Sorry for the long cut and paste; I could circulate as 

14 a document.

15 From Debbie Cochrane (P), State agencies to Everyone:

16 Re. private loan figures cited: The College Board's 

17 Trends in Student Aid is the best source I am aware of on 

18 total (federal and nonfederal debt). Their full data set 

19 can be downloaded here: 

20 https://research.collegeboard.org/trends/student-aid. I 

21 used Table 2, rows 18 (total federal loans) and row 29 

22 (nonfederal loans), for the relevant years.

23 From David Socolow (A) State Agencies to Everyone:

24 +1 to Johnson's point. For many private student loans, 

25 schools must "certify" Total Cost of Attendance minus the 

26 amount of student aid for which the student is eligible 

27 prior to the origination of the loan, (so that the lender 

28 can verify that the loan amount doesn't exceed TCOA minus 

29 available student aid). So, schools should have data on 

30 every private student loan they have certified.

31 From Adam Looney (Advisor) to Everyone:

32 Cellini and Blanchard have a recent paper that 

33 specifically addresses the question of how much 

34 underreported income there is in programs that might be 
Committee Meetings - 01/19/22

1 subject to GE rules. 

2 https://drive.google.com/file/d/1dAhIMzeVF7pYSJSU2ovwhFapJb

3 eBOy_d/view Their conclusion is that in cosmetology 

4 programs specifically "underreporting of tipped income is 

5 likely to constitute just 8% of earnings."

6 From Brad Adams (P - Proprietary 

7 Institutions) to Everyone:

8 Sent this request to Cindy:

9 From Brad Adams (P - Proprietary 

10 Institutions) to Everyone:

11 I would like to ask the Department if it can provide 

12 program-level enrollment data at the four and six-digit CIP 

13 levels for all gainful employment programs so we can see 

14 how many institutions and programs would be captured and 

15 fall through based on the n-sizes we discuss. Many 

16 community colleges were able to avoid the 2014 debt-to17 earnings metric because of small program sizes.

18 From Debbie Cochrane (P), State agencies to Everyone:

19 +1 to Barmak on how to make decisions re program size

20 From Johnson (P) Legal Aid to Everyone:

21 1+ to Jamie on combining N numbers in different small 

22 programs per institution when N is too small

23 From Anne Kress (P) Comm Colleges to Everyone:

24 +1 to Jamie’s point is seeking to get the signal out 

25 of the noise so that we are focusing our efforts on 

26 protecting at-risk students.

27 From Barmak Nassirian (A) Servicemembers & 

28 Vets to Everyone:

29 +1 on Jamie's comments

30 From Brad Adams (P - Proprietary 

31 Institutions) to Everyone:
Committee Meetings - 01/19/22

1 I will put a 2018 Treasury report into the chat that 

2 may help to generate some discussion and ideas.

3 https://www.treasury.gov/tigta/auditreports/2018report

4 s/201830081fr.pdf

5 In this report, the IRS states that “From the 

6 estimated individual income tax underreporting Tax Gap 

7 estimate of $235 billion for Tax Year (TY) 2006, the IRS 

8 estimates there were unreported tips by employees of $23 

9 billion (10 percent). The $23 billion in unreported tips 

10 accounts for 52 percent of the estimated individual tip 

11 income in TY 2006 of $44 billion.”

12 From Amanda Martinez to Everyone:

13 +1 Barmak

14 From Anne Kress (P) Comm Colleges to Everyone:

15 +1 @Barmak — Provisions in the earlier regulations 

16 were designed to guard against this; to what extent were 

17 they successful?

18 From Anne Kress (P) Comm Colleges to Everyone:

19 Does the Dept have any responsive data on this 

20 question?

21 From Barmak Nassirian (A) Servicemembers & 

22 Vets to Everyone:

23 +1 on Emmanual's view

24 From Ernest Ezeugo (P), Students/Student Loan 

25 Borrowers to Everyone:

26 How has the Department historically landed on what 

27 disclosures it ends up using? To what extent, like Anne 

28 mentioned, are the options tested against student/family 

29 opinions on what disclosures would be most useful to them?

30 From Ashley Schofield (A) - MSIs to Everyone:
Committee Meetings - 01/19/22

1 +1 @ Emmanual

2 From Barmak Nassirian (A) Servicemembers & 

3 Vets to Everyone:

4 Great points by Jamie

5 From Anne Kress (P) Comm Colleges to Everyone:

6 +1 @Jaime!

7 From Emmanual Guillory (A)-PNPs to Everyone:

8 +1 Jamie

9 From Ernest Ezeugo (P), Students/Student Loan 

10 Borrowers to Everyone:

11 +1 Jamie

12 From Adam Looney (Advisor) to Everyone:

13 Here is a paper examining college-related disclosures 

14 and how to improve their efficacy: 

15 https://www.brookings.edu/research/information-disclosure16 and-college-choice/

17 From Ashley Schofield (A) - MSIs to Everyone:

18 +1 @Jamie

19 From Debbie Cochrane (P), State agencies to Everyone:

20 Related to job placement rate proposals from a working

21 group on the topic in 2013-14, there are two memos. One is 

22 on the use of job placement rates as a disclosure and 

23 reporting requirement: 

24 https://www2.ed.gov/policy/highered/reg/hearulemaking/2012/

25 21jobplacement-rate-as-disclosure93013.pdf. The second 

26 relates to consideration of a job placement rate as a 

27 metric in a GE rule: 

28 https://www2.ed.gov/policy/highered/reg/hearulemaking/2012/

29 21jobplacement-rate-as-metric93013.pdf
Committee Meetings - 01/19/22

1 From Anne Kress (P) Comm Colleges to Everyone:

2 +1 @Barmak — accurate description of CC program 

3 pathway; documenting the prep work and planning should be 

4 part of the process

5 From Brad Adams (P - Proprietary 

6 Institutions) to Everyone:

7 I am supportive of the Department’s efforts to remove 

8 668.15 and to consolidate the financial responsibility 

9 regulations all into Subpart L. I agree that the current 

10 structure can create confusion.

11 From Brad Adams (P - Proprietary 

12 Institutions) to Everyone:

13 +1 to Kelli's comment

14 From Brad Adams (P - Proprietary 

15 Institutions) to Everyone:

16 Would the department be open to David doing an 

17 analysis of the leasing standard change to composite 

18 scores? Again this is an accounting change that has no 

19 financial bearing on the schools' financial strength.

20 From Brad Adams (P - Proprietary 

21 Institutions) to Everyone:

22 +1 to Carolyn's comment

23 From Debbie Cochrane (P), State agencies to Everyone:

24 David Socolow is coming to the table for state 

25 agencies for a bit.

26 From Ernest Ezeugo (P), Students/Student Loan 

27 Borrowers to Everyone:

28 Carney King is replacing me at the table for 

29 students/student loan borrowers.
Committee Meetings - 01/19/22

1 From Kelli Perry (P) - Private, Nonprofit Institutions of 

2 Higher Ed to Everyone:

3 I said 90 days and I meant 9 months relating to e-z 

4 audit.

5 From Yael Shavit (A) -- State AGs to Everyone:

6 +1 to Barmak

7 From Brad Adams (P - Proprietary 

8 Institutions) to Everyone:

9 My yes vote on this matter is tied to confirmation 

10 that the 30 day question I posed

11 From Barmak Nassirian (A) Servicemembers & 

12 Vets to Everyone:

13 +! on Brad's comment on materiality: "Suffers any 

14 material adverse events" at the end of the list as a 

15 catchall

16 From Dave McClintock (Advisor) Auditor to Everyone:

17 Happy to assist

18 From Barmak Nassirian (A) Servicemembers & 

19 Vets to Everyone:

20 +1 on Carolyn's point

21 From Yael Shavit (A) -- State AGs to Everyone:

22 +1 on Carolyn

23 From Anne Kress (P) Comm Colleges to Everyone:

24 +1 on Carolyn

25 From Jamie Studley (P) Accrediting 

26 Agencies to Everyone:

27 The provision doesn't say sued - it says judgment has 

28 been rendered after day in court.
Committee Meetings - 01/19/22

1 From Barmak Nassirian (A) Servicemembers & 

2 Vets to Everyone:

3 +1 on Yael's point

4 From Anne Kress (P) Comm Colleges to Everyone:

5 +1 @Yael, these are indicators that lead to action to 

6 protect students; we need to center that

7 From Jessica Ranucci (A)- Legal Aid to Everyone:

8 +1 to Yael

9 From Carolyn Fast (P), Consumer Advocates/Civil Rights 

10 Organizations to Everyone:

11 +1 to Yael

12 From Ashley Schofield (A) - MSIs to Everyone:

13 + 1 to Yael

14 From Jamie Studley (P) Accrediting 

15 Agencies to Everyone:

16 Ah sorry -- if you mean (B) it is a very high bar for 

17 a significant financial risk, + 1 to Yael

18 From Sam (P) Fin Aid Admin to Everyone:

19 +1 to Yae

20 From Ernest Ezeugo (P), Students/Student Loan 

21 Borrowers to Everyone:

22 +1 Yael's point.

23 From Brad Adams (P - Proprietary 

24 Institutions) to Everyone:

25 Where will we pick up tomorrow? Will we stay on B?

26 The institution is being sued for financial relief in an 

27 action brought on or after July 1, 2023, by a Federal or 

28 State authority, or through a qui tam lawsuit in which the 
Committee Meetings - 01/19/22

1 Federal government has intervened and the suit has been 

2 pending for 120 days;?

3 From Sam (P) Fin Aid Admin to Everyone:

4 *Yael