In September 2023, the Biden administration revealed its new Gainful Employment (GE) and Financial Value Transparency (FVT) rules that are set to take effect in July 2024. It requires some post-secondary institutions to demonstrate that students are prepared to be employable, with manageable amounts of student debt, and that their potential earnings reflect the investment in their education.
After the rules take effect in July 2024 the government will release its first report in 2025. The first time a school could lose funding eligibility would be in 2026.
What Schools Are Impacted
The new regulations will mostly impact for-profit institutions, all of whose programs are subject to the rule. At community colleges, only certificate programs will be required to adhere to the new reporting requirements.
The data collection process will require significant time and resources, especially for schools that manage their student information in spreadsheets or across disparate applications that aren’t integrated.
This post will cover the latest developments in the new GE and FVT rules, what it means for schools going forward, and how to streamline reporting and data management.
Diving Into the Gainful Employment Rule and Financial Value Transparency Framework
The new Biden administration directives have been under consideration for several years. It marks a return to heightened oversight for for-profit trade schools and non-degree programs at private and public institutions that administer Title IV federal financial aid.
The issue has been a political back-and-forth since the Obama administration’s Department of Education issued limited GE rules out of concern that for-profit schools were charging high tuition but not adequately training students to earn a living wage in their chosen field. When President Trump took office, his administration suspended the policy.
New GE Rule Aims to Increase Transparency
The government asserts that some career training programs saddle graduates with unaffordable loans and may not equip them for potential earnings any better than someone in their state who has not attended a post-secondary program.
A school must be able to demonstrate its capability to prepare students for employment in an occupation or their gainful employment opportunities. As part of this requirement, schools must publish detailed data on their graduates’ loans, income and job placement.
The new GE rules include two requirements:
- Qualifying programs in any professional sector must demonstrate that graduates can afford their annual debt payments
- Schools must show their graduates earn more than adults in their state who didn’t pursue a post-secondary education
The Biden administration’s Department of Education says the oversight will protect 700,000 students annually who might enroll in one of the 1,700 low-performing programs.
The government will publish the data collected from schools so students can do their own research to see possible financial outcomes. Additionally, students will be required to sign an acknowledgment that they’ve viewed information about programs whose students have graduated with unaffordable amounts of debt.
If a school or program fails to meet the benchmark for two straight years, it risks losing its eligibility to receive federal financial aid.
Financial Value Transparency (FVT) Framework and Disclosures
For this rule, the Department of Education will collect and publish data on student debt and earnings from all post-secondary programs that receive federal financial aid to assess the value of the programs. Schools will have collect and publish data on the following:
- Student loan amounts for federal, private and institutional aid to show how program graduates have paid for their education
- Information related to tuition and ancillary expenses, such as fees, books and supplies.
This rule also requires students to sign a disclosure to acknowledge they have reviewed the information and are aware of the data. The Department of Education estimates the new transparency reporting requirements will impact approximately 400 programs with about 120,000 students.
New Information for Schools to Track
Because the new GE rules will require schools to report on financial aid and career placement data, it means schools need to stay on top of gathering information from students, graduates and employers.
Under the new GE rules, the DOE will assess schools based on debt-to-earnings ratios and an earnings premium test:
- Programs that pass the DOE’s standards can continue administering Title IV aid to their students
- Programs that come close or fail the standards test risk suspension from federal aid
- A GE program could become ineligible if it fails to meet standards for two or three consecutive years
- A GE program could become ineligible if it fails for four straight years.
- If a school is at risk or failing, it potentially triggers a notification to enrolled students and prospects
The Department of Education created the debt-to-earnings rates to determine if a program prepares its students for gainful employment in their chosen field. It uses typical loan debt and earnings data for graduates to determine the ratios, then publishes the rates for discretionary income and annual earnings.
Put together, the two rates measure a GE program’s annual loan payments as a percentage of their annual earnings. Under the ratio, the amount a program graduate needs to set aside for their student loan payments must equal 8 percent or less of their yearly earnings.
A GE program becomes ineligible if it fails to meet both D/E metrics for two out of three years.
Earnings Premium Test
Schools must show that at least half of their graduates earn more than a typical high school graduate in their state who does not have a post-secondary degree. GE programs that fail to meet this standard for two out of three years become ineligible for Title IV.
Student Information System Solutions for New GE Rules
These additional reporting requirements will undoubtedly create more work for school administrators. If your team isn’t confident in the accuracy of its data – or spends too much time trying to find it – your school could be at risk of losing Title IV funding.
Campus Cafe’s integrated student information system supports the entire student life cycle, from admissions to graduation and beyond, and includes modules for financial aid management and career placement data.
Most importantly, every module in the system is connected and pulls student data from one centralized location. Our staff will train your administrators to extract information quickly and easily using a suite of tools and reports.
A Customizable CRM to Collect Student Data
Campus Cafe’s Customer Relationship Management (CRM) module enables users to track, manage, and support data and interactions. It helps keep real-time information organized and accessible to multiple users.
For the new GE rules, the CRM can track career placement data in several ways:
- Administrators can configure the database to include job placement data in a student’s profile, which staff can update as needed
- Graduates’ job placements can be assigned to a specific company, individual, field or certifying body, making the information accessible to sort and search
To enhance reporting and searches, users – including students and graduates – can add granular details to the CRM database through self-service portals. Below is an example of the fields you can track.
Pre-built Reports to Streamline Information Gathering
Schools that want to stay ahead of the new GE rules will need to keep their data well-organized and accessible. For this task, Campus Cafe’s library of pre-built reports is a valuable and time-saving resource. The user-friendly system is easy to navigate no matter the users’ technical capabilities.
Tools that can help with GE reporting include:
- Dashboards: See key metrics on career placement information and gainful employment data on a visual dashboard
- Customized reports: See GE and career placement reporting based on your school’s programs and student population
- Filters: Sort and drill down into specific data fields
Intuitive Student and Alumni Portals
Students and graduates can easily update their work history, wage information and contact details in Campus Cafe’s student and alumni portals. The cloud-based system lets users log in from any device and location.
Encouraging students and graduates to update their information reduces the workload on your staff and improves the validity of your program’s data.
Responsive Customer Service and Technical Support
As schools approach the new GE realities, they will likely have questions and need technical assistance. Campus Cafe’s U.S.-based technical support team is on hand to assist your staff with answering questions, including specific information related to reports and using the CRM.
Additionally, our extensive online knowledge base contains detailed and regularly updated information, videos and use cases.
The Bottom Line: An Integrated SIS Makes It Easier to Comply With the New GE Requirements
Many schools are likely to face a learning curve and a strain on resources to comply with the new GE rules. Now is the time to determine how your school will manage the data collection process.
Campus Cafe can help your school make the switch from spreadsheets, manual data entry or antiquated student management software to our modern, all-in-one cloud-based SIS. You’ll save time collecting student data, consolidate resources and stay on the right side of the DOE’s new compliance requirements. See more ways Campus Cafe’s integrated student information system can help your team stay ahead of important changes to financial aid reporting.