MEMO

To: Negotiated Rulemaking Committee

From: Barmak Nassirian

AASCU

Subject: Preliminary Thoughts and Request for Clarification

Date: September 5, 2013

I write to offer a preliminary reaction to the preparatory material circulated last week. I thank the 

Department for the thoughtful framework and for the starting point that its draft has provided for the 

committee’s deliberations. As I’m sure is the case with all other negotiators, I found myself in 

agreement with certain features of the proposed regulatory approach, and in disagreement with others. 

In the interest of saving time at the meeting, I thought it might be helpful to outline my immediate 

conceptual concerns and propose alternatives for the group’s consideration. 

On the two specific issues below, I believe that the proposed draft fails to track the underlying statutory 

language. Given the high likelihood of judicial review of whatever regulations emerge at the end of this 

rulemaking, it is particularly important for the committee to faithfully interpret the specific words of the 

underlying statute (“prepare students for gainful employment in a recognized occupation”) as literally as 

possible. We should collectively heed the admonition that in interpreting statutory language, no words 

should be treated as “mere surplusage.” Neither normative policy priorities nor practical 

implementation or compliance concerns should re-write or completely ignore the black letter of the 

statutory authorization.

Issue 1

The “gainful employment” clauses in the sections 101 and 102 of the statute articulate upfront eligibility 

requirements for participation in federal student aid programs. The Department’s approach, in contrast,

focuses almost entirely on developing post-facto metrics for loss of eligibility. Furthermore, the specific 

phraseology of the statutory language (“prepare students for gainful employment in a recognized

occupation”) provides a clear indication that programs seeking to establish eligibility through this 

provision would be subject to a process of Secretarial recognition of the occupations for which such 

programs claim to be preparing students.

While I have no conceptual objections to articulating metrics for loss of eligibility, I do strongly object to 

the absence of formal upfront recognition procedures, and respectfully request the committee’s 

consideration of such a process. Given the vagaries of the economy and varying job market 

circumstances, I would hope that the regulatory articulation of the upfront process would be fairly 

minimal so as to allow the Department to conduct basic due-diligence on the fundamental credibility of 
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institutional claims. Such obvious low-threshold items as ensuring that the occupations listed are real, 

that there is a reasonable market need for them, that they pay wages sufficiently above minimum wage 

to justify the cost and/or length of programs seeking eligibility, and that the programs actually satisfy all 

the necessary requirements for actual employment in the occupation in question, would be the type of 

front-end review through which the Department could approve or deny initial claims of eligibility. 

Not only is such a review required by the plain reading of the statute, it also constitutes good policy in 

that it addresses a fundamental weakness of the Department’s proposed approach, which is its 

indifference to the plight of multiple cohorts of students who end up enrolling in sub-par programs that 

later lose eligibility on the basis of the bad educational and economic outcomes they produced for those 

students. As an additional sub-topic here, I hope that the committee would consider extending relief to 

former students at schools that end up losing eligibility, perhaps by using the false certification 

discharge it has under current law.

Issue 2

In light of the outcome of the litigation around the 2011 final regulations, I accept the Department’s 

decision to limit the tracking of outcomes to Title IV-recipients-only. I also understand the interpretive 

and analytical logic of limiting the two debt-to-earnings tests to students who actually complete the 

various programs, since the inclusion of non-completers would result in a chaotic mixing of apples and 

oranges. Having said this, I believe that algorithmically omitting any and all references to noncompleters, as the proposed draft does, is troublesome on policy and legal grounds. First, in only 

tracking completers, we may unintentionally set up perverse incentives for bad actors to game the 

metrics by enrolling large numbers of non-completers whose aid dollars end-up cross-subsidizing small 

numbers of completers. A school with a cohort of 1,000 students, for example, could have 990 dropouts (with crushing debt and no real occupational benefits to show for it) and only 10 completers on the 

basis of whose aid packaging and post-completion earnings it could retain full eligibility. Second, 

proposed regulations cannot unilaterally edit or amend the statutory language to read “prepare 

graduates” or “prepare students who complete.” The statute clearly references students—whether 

completers or not—and the regulatory scheme must, in some way, factor in post-enrollment

consequences for non-completers in any loss-of-eligibility metrics it devises. I suspect we could have a 

good conversation about different ways in which non-completers can be appropriately factored into any 

final metrics.

Request for Clarification

Finally, I’m having a difficult time understanding the background data provided by the Department, 

specifically why the number of gainful employment programs for which data have been made available 

(in 2011 and 2013) has changed so significantly over time. Here’s a quick, rough count of the number of 

programs with data as far as I see:
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Overall

10+ completers 30+ completers

2011 informational rates 07-08? n/a 5,505

New data for 07-08 2,418 1,548

New data for 08-09 6,845 5,632

I don’t understand why there is such a decrease in the availability of program-level data (~4,000 

programs) between the 2011 informational rates and the new data for 07-08, as I believe they are for 

the same year. (Correct?) Furthermore, the sudden spike between the 07-08 and 08-09 looks too steep, 

and strongly suggests that there’s something wrong with the new numbers released for 07-08.

Looking just at medical assisting programs, it looks like the drop between the 2011 and 2013 data 

releases is concentrated almost exclusively within the for-profit sector. See the counts below for CIP 

510801 only:

Sector # programs in 2011 

information rates

# programs in new data 

for 07-08

# programs in new data 

for 08-09

Pub 4-year 1 4 5

Priv NFP 4-year 3 4 8

Priv FP 4-year 72 28 115

Pub 2-year 33 86 126

Priv NFP 2-year 3 0 3

Priv FP 2-year 210 48 270

Pub <2yr 6 19 22

Priv NFP <2yr 4 1 5

Priv FP <2yr 80 13 99

Total 412 203 653

Can the Department please address whether my reading of the data is correct, and, if so, what might be 

causing the anomaly in the new 07-08 numbers?