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Gainful Employment 

Negotiated Rulemaking Committee Meetings 

Opening Remarks of 

Jeff Appel, Deputy Under Secretary, U.S. Department of Education 

November 18, 2013 

1. Good morning. I’m Jeff Appel, Deputy Under Secretary at the U.S. 

Department of Education, and I’d like to welcome the Committee back 

for the second round of negotiated rulemaking on gainful employment. 

2. Welcome also to members of the public, and a special welcome to 

Congresswoman Foxx who is here with us today. 

3. Let me start by extending a sincere thank you to the Committee on 

behalf of Secretary Duncan and Under Secretary Kanter for your 

flexibility and patience as we worked to reschedule this session. 

4. I know we were all supposed to be here in October, but due to a lapse 

in appropriations and the government shut down that lasted 17 days, 

work on GE had to be halted which set us back from our original 

schedule. 

5. I’m really pleased to see that Committee members and alternates were 

able adjust your schedules so that all communities of interest are 

represented here today, and I know everyone here is really ready to digin. 

6. So a lot has happened since the last time this group was altogether. 

7. The Committee held a conference call that was open to the public on 

September 25, 2013, for the purpose of discussing the approval of new 

GE programs. 
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8. The Committee working groups put forward several proposals and ideas 

on a number of the key concepts we discussed at the last session, 

including programmatic repayment rates, programmatic cohort default 

rates, and new program approvals. 

9. We know that was a ton of work for the Committee members and are 

really grateful for your hard work in getting those in and on time. 

10. Department staff have since reflected on the last session and the 

Committee conference call, and have carefully reviewed each working 

group proposal. 

11. Based on your input and additional thought by Department staff, we 

have drafted new regulatory text for your review and consideration. 

12. This new draft is more comprehensive and responds to a number of 

concerns raised by the Committee and further advances a number of 

the Department’s goals that I outlined at the first session. 

13. This was our best attempt at synthesizing the input we received from 

the Committee in the context of our overall objectives and put 

something forward for you to react to. 

14. We’ve made tremendous progress. But I want to emphasize that this is 

not a finished product. 

15. To get there, we need to hear your reactions, we need to understand 

your questions, and most of all we need to hear your ideas for 

improvement. 

16. It’s very important that everyone goes into this negotiation 

understanding that this draft regulatory text is a starting point for this 

week’s discussion. 
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17. We want to hear your critiques and criticisms, but we really need 

constructive suggestions on how to modify the rule. 

18. One of the goals of this process is consensus. 

19. But the primary goal, for all of us, is getting it right and designing the 

best possible gainful employment rule. 

20. So the Department walks into this negotiation with its mind still very 

much open to all aspects of the rule. 

21. As I laid out at the last session, the Department is engaged in this 

rulemaking to help solve a problem. 

22. The educational programs that we are talking about today can only be 

eligible under the law to participate in the federal student aid program if 

they prepare students for gainful employment in a recognized 

occupation. 

23. Participation is not an entitlement under the law; it is conditioned on 

meeting this fundamental requirement. 

24. While many GE programs are providing high-quality education and 

training for their students, far too many are failing to do so. 

25. Without the training to achieve adequate earnings, these former 

students struggle to pay back the debt they took on. 

26. Our guiding principles for this rule have not changed. As I stated at 

the last session, the Department’s objectives for the gainful 

employment rule are as follows: 

a. First, institutions with programs having little or no value, and 

that lead to high indebtedness for students should improve 

them or risk no longer qualifying for taxpayer support. 
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b. Second, institutions should be given time and be motivated to 

improve those programs that are not among the very worst, but 

still do not have outcomes that meet minimum acceptable 

levels of performance. 

c. And third, programs that produce exceptional results for 

students should be recognized and emulated. We remain 

interested in discussing with you ways in which the best 

programs could be identified and rewarded and how best 

practices could be highlighted and shared with others. 

27. As we discussed the draft rule with these principles in mind at the first 

session, your input provided valuable guidance that has informed this 

new draft. 

28. For instance, during the first session, we heard concerns that the initial 

proposal did not account for students who do not complete a 

program. Programs could have passed the metrics despite having high 

numbers of students who don’t complete a program and end up 

unprepared for, and unable to find, employment. 

29. We responded to this concern by adding two metrics to the existing 

debt-to-earnings measures for your consideration: a program cohort 

default rate and a loan portfolio repayment measure. Both of the new 

metrics hold programs accountable for the outcomes of students who 

complete GE programs as well as those who do not complete. 

30. Under this draft, programs must not fail any one of the three metrics 

to maintain eligibility. Each measure serves as a separate indicator of 

program performance and meets a unique goal. 

31. We also tried to address concerns that GE programs on the verge of 

ineligibility leave students vulnerable, students who should be 

protected in the event programs do not improve. 
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32. To address this concern, we designed a provision that provides 

students with some protection if such programs fail to improve, to the 

amount needed to ensure that students’ debt does not exceed the rule’s 

debt thresholds. 

33. Specifically, this proposal would require an institution with a program 

that could become ineligible in an immediately succeeding year to be 

prepared to pay down the debts of students enrolled in the program to 

the extent students’ debts exceed the rule’s thresholds. 

34. We also heard concerns about the interest rate used for the debt-toearnings calculations and that the transition period would not afford 

longer term programs a sufficient opportunity to improve. 

35. To address these concerns, we clarified that the interest rate used will 

be the lowest rate from the four years prior to when the program 

results are measured, and we extended the transition period to 

accommodate programs with longer durations. 

36. These are just a few examples of where we have made changes or 

improvements based on ideas or concerns raised by this Committee. 

37. But we also know there are a number of issues and ideas that were 

raised during the last session and by the working groups that are not 

incorporated into this draft. 

38. For instance, we know there is concern that we did not include a 

placement rate metric in the draft. 

39. We want to use this session to provide you with some feedback on 

those topics, and talk through those issues in more detail. 

40. Finally, I want to address a concern that I anticipate the Committee 

may have, which is that we have not provided an estimate of the 
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number of programs that may be affected under the programmatic 

cohort default rate or loan portfolio repayment measures. 

41. Our data team is working very hard to develop estimates on the 

potential impact of those metrics, and ensure that the data used to do 

this are reliable. We will make available to the public any reliable 

estimates we can produce as soon as we can 

42. But, the absence of this analysis at this moment should not be a 

deterrent from robust discussion on the merits of these proposed 

metrics. We think these measures are very much worth considering in 

response to the concern that the rule might otherwise fail to address 

non-completers. 

43. So I know everyone is anxious to get to work. 

44. I just want to note that I realize reconciling the diverse interests, 

perspectives, and opinions with respect to each aspect of this rule will 

be challenging. 

45. But with all of the expertise at this table, I am optimistic that this 

session will be an extremely productive step forward toward a rule that 

accomplishes the Department’s policy goals in a balanced, reasonable 

and practical manner. 

46. On behalf of Secretary Duncan and Under Secretary Kanter, I thank 

the Committee for your time and for lending your expertise to this 

very important process. 

47. Thank you.