Department's Negotiated Rulemaking Process for Gainful Employment. Final Audit Report.
Author: Office of Inspector General (ED)
Date: 2012-06-00
Type: Reports - Evaluative
Subjects: Student Financial Aid,Eligibility,Federal Programs,Proprietary Schools,Quality of Working Life,Work Environment,Vocational Schools,Postsecondary Education,Employment,Politics of Education,Governance,Conflict of Interest

The Department of Education (Department) is required to use negotiated rulemaking to develop proposed regulations for programs authorized under Title IV of the Higher Education Act of 1965, as amended (HEA). Under negotiated rulemaking, the Department works to develop the proposed regulations in collaboration with representatives of the parties who will be significantly affected by the regulations. The proposed regulations are subsequently published in a document referred to as a Notice of Proposed Rulemaking (NPRM). On May 26, 2009, the Department published a notice in the Federal Register announcing its intention to develop proposed regulations to maintain or improve program integrity in the Title IV HEA programs, including the topic of gainful employment (GE). GE was a requirement for eligibility in the Title IV programs for proprietary schools and certain postsecondary vocational schools, but had never been defined. The Department's goals were to establish measures for determining whether programs lead to GE in recognized occupations and to institute conditions under which these educational programs could remain eligible to participate in student financial assistance programs authorized under the HEA. The proposed rules would seek to protect taxpayers against wasteful spending on educational programs of little or no value that also lead to high indebtedness for students. On September 9, 2009, the Department published a notice in the Federal Register, which stated that defining GE in a recognized occupation would fall under the scope of the committee established to address program integrity issues (&quot;Program Integrity Committee&quot;). The Program Integrity Committee conducted three public negotiated rulemaking sessions beginning in November 2009, all of which included discussions on the topic of GE. By the final meeting in late January 2010, the negotiating committee had not reached agreement on each of the 14 program integrity issues, including GE. Because consensus was not achieved, the Department was under no obligation to adopt any of the draft language discussed in its development of the proposed regulations. Over the next few months, Department officials worked on drafting the Program Integrity NPRM. In May 2010, the Department, in agreement with the Office of Management and Budget (OMB), split the Program Integrity NPRM into two separate NPRMs, with one to be devoted only to GE due to the complexity of the issue. On July 14, 2010, the Department sent the proposed GE regulations to OMB for formal review and comment. OMB cleared the proposed regulations the following day. At 8:45 am on July 23, 2010, the GE NPRM was posted for public inspection on the Federal Register website and published on July 26, 2010, in the Federal Register. The initial objective of the Office of Inspector General's audit was to determine whether the Department had a process for handling embargoed regulations and protocols related to the protection of sensitive information for Department staff involved in the negotiated rulemaking process. This paper presents the findings of the final audit on the Department's negotiated rulemaking process for gainful employment. A list of acronyms/abbreviations used in this report and the Department's response to the draft report are included. (Contains 14 footnotes.