83_FR_40324 83 FR 40167 - Program Integrity: Gainful Employment

83 FR 40167 - Program Integrity: Gainful Employment

DEPARTMENT OF EDUCATION

Federal Register Volume 83, Issue 157 (August 14, 2018)

Page Range40167-40183
FR Document2018-17531

The Secretary proposes to rescind the gainful employment (GE) regulations, which added to the Student Assistance General Provisions requirements for programs that prepare students for gainful employment in a recognized occupation. The Department plans to update the College Scorecard, or a similar web-based tool, to provide program-level outcomes for all higher education programs, at all institutions that participate in the programs authorized by title IV of the Higher Education Act of 1965, which would improve transparency and inform student enrollment decisions through a market-based accountability system.

Federal Register, Volume 83 Issue 157 (Tuesday, August 14, 2018)
[Federal Register Volume 83, Number 157 (Tuesday, August 14, 2018)]
[Proposed Rules]
[Pages 40167-40183]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-17531]


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DEPARTMENT OF EDUCATION

34 CFR Parts 600 and 668

[Docket ID ED-2018-OPE-0042]
RIN 1840-AD31


Program Integrity: Gainful Employment

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Secretary proposes to rescind the gainful employment (GE) 
regulations, which added to the Student Assistance General Provisions

[[Page 40168]]

requirements for programs that prepare students for gainful employment 
in a recognized occupation. The Department plans to update the College 
Scorecard, or a similar web-based tool, to provide program-level 
outcomes for all higher education programs, at all institutions that 
participate in the programs authorized by title IV of the Higher 
Education Act of 1965, which would improve transparency and inform 
student enrollment decisions through a market-based accountability 
system.

DATES: We must receive your comments on or before September 13, 2018.

ADDRESSES: Submit your comments through the Federal eRulemaking Portal 
or via postal mail, commercial delivery, or hand delivery. We will not 
accept comments submitted by fax or by email or those submitted after 
the comment period. To ensure that we do not receive duplicate copies, 
please submit your comments only once. In addition, please include the 
Docket ID at the top of your comments.
     Federal eRulemaking Portal: Go to www.regulations.gov to 
submit your comments electronically. Information on using 
Regulations.gov, including instructions for accessing agency documents, 
submitting comments, and viewing the docket, is available on the site 
under ``Help.''
     Postal Mail, Commercial Delivery, or Hand Delivery: The 
Department strongly encourages commenters to submit their comments 
electronically. However, if you mail or deliver your comments about the 
proposed regulations, address them to Ashley Higgins, U.S. Department 
of Education, 400 Maryland Ave. SW, Mail Stop 294-20, Washington, DC 
20202.

    Privacy Note: The Department's policy is to make all comments 
received from members of the public available for public viewing in 
their entirety on the Federal eRulemaking Portal at 
www.regulations.gov. Therefore, commenters should be careful to 
include in their comments only information that they wish to make 
publicly available.


FOR FURTHER INFORMATION CONTACT: Scott Filter, U.S. Department of 
Education, 400 Maryland Ave. SW, Room 290-42, Washington, DC 20024. 
Telephone: (202) 453-7249. Email: [email protected].
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION: 
    Executive Summary:
    Purpose of This Regulatory Action:
    As discussed in more detail later in this notice of proposed 
rulemaking (NPRM), the proposed regulations would rescind the GE 
regulations and remove them from subpart Q of the Student Assistance 
and General Provisions in 34 CFR part 668.
    We base our proposal to rescind the GE regulations on a number of 
findings, including research results that undermine the validity of 
using the regulations' debt-to-earnings (D/E) rates measure to 
determine continuing eligibility for participation in the programs 
authorized by title IV of the Higher Education Act of 1965, as amended 
(title IV, HEA programs). These findings were not accurately 
interpreted during the development of the 2014 GE regulations, were 
published subsequent to the promulgation of those regulations, or were 
presented by committee members at negotiated rulemaking sessions. The 
Department has also determined that the disclosure requirements 
included in the GE regulations are more burdensome than originally 
anticipated and that a troubling degree of inconsistency and potential 
error exists in job placement rates reported by GE programs that could 
mislead students in making an enrollment decision. Additionally, the 
Department has received consistent feedback from the community that the 
GE regulations were more burdensome than previously anticipated through 
the disclosure and reporting requirements that were promulgated in 
2014.
    Finally, the Department has determined that in order to adequately 
inform student enrollment choices and create a framework that enables 
students, parents, and the public to hold institutions of higher 
education accountable, program-level outcomes data should be made 
available for all title IV-participating programs. The Department plans 
to publish these data using the College Scorecard, or its successor 
site, so that students and parents can compare the institutions and 
programs available to them and make informed enrollment and borrowing 
choices. However, the College Scorecard is not the subject of this 
regulation. For a more detailed discussion, see Significant Proposed 
Regulations.
    Section 410 of the General Education Provisions Act (GEPA) 
authorizes the Secretary to make, promulgate, issue, rescind, and amend 
rules and regulations governing the manner of operations of, and 
governing the applicable programs administered by, the Department (20 
U.S.C. 1221e-3). Additionally, section 414 of the Department of 
Education Organization Act authorizes the Secretary to prescribe such 
rules and regulations as the Secretary determines necessary or 
appropriate to administer and manage the functions of the Secretary or 
the Department (20 U.S.C. 3474).
    Summary of the Major Provisions of This Regulatory Action: As 
discussed under ``Purpose of This Regulatory Action,'' the proposed 
regulations would rescind the GE regulations. Please refer to the 
Summary of Proposed Changes section of this NPRM for more details on 
the major provisions contained in this NPRM.
    Costs and Benefits: As further detailed in the Regulatory Impact 
Analysis, the benefits of the proposed regulations would include a 
reduction in burden for some institutions, costs in the form of 
transfers as a result of more students being able to enroll in a 
postsecondary program, and more educational program choices for 
students where they can use title IV aid.
    Invitation to Comment: We invite you to submit comments regarding 
these proposed regulations.
    To ensure that your comments have maximum effect in developing the 
final regulations, we urge you to identify clearly the specific section 
or sections of the proposed regulations that each of your comments 
addresses, and provide relevant information and data whenever possible, 
even when there is no specific solicitation of data and other 
supporting materials in the request for comment. We also urge you to 
arrange your comments in the same order as the proposed regulations. 
Please do not submit comments that are outside the scope of the 
specific proposals in this NPRM, as we are not required to respond to 
such comments.
    We invite you to assist us in complying with the specific 
requirements of Executive Orders 12866 and 13563 and their overall 
requirement of reducing regulatory burden that might result from these 
proposed regulations. Please let us know of any further ways we could 
reduce potential costs or increase potential benefits while preserving 
the effective and efficient administration of the Department's programs 
and activities.
    During and after the comment period, you may inspect all public 
comments about the proposed regulations by accessing Regulations.gov. 
You may also inspect the comments in person at 400 Maryland Ave. SW, 
Washington, DC, between 8:30 a.m. and 4 p.m., Eastern Time, Monday 
through Friday of each week except Federal holidays. To schedule a time 
to inspect comments, please contact the person listed under FOR FURTHER 
INFORMATION CONTACT.
    Assistance to Individuals with Disabilities in Reviewing the

[[Page 40169]]

Rulemaking Record: On request, we will provide an appropriate 
accommodation or auxiliary aid to an individual with a disability who 
needs assistance to review the comments or other documents in the 
public rulemaking record for the proposed regulations. To schedule an 
appointment for this type of accommodation or auxiliary aid, please 
contact the person listed under FOR FURTHER INFORMATION CONTACT.

Background

    The Secretary proposes to amend parts 600 and 668 of title 34 of 
the Code of Federal Regulations (CFR). The regulations in 34 CFR parts 
600 and 668 pertain to institutional eligibility under the Higher 
Education Act of 1965, as amended (HEA), and participation in title IV, 
HEA programs. We propose these amendments to remove the GE regulations, 
including the D/E rates calculations and the sanctions and alternate 
earnings appeals related to those calculations for GE programs, as well 
as the reporting, disclosure, and certification requirements applicable 
to GE programs.
    The Department seeks public comment on whether the Department 
should amend 34 CFR 668.14 to require, as a condition of the Program 
Participation Agreement, that institutions disclose, on the program 
pages of their websites and in their college catalogues that, if 
applicable, the program meets the requirements for licensure in the 
State in which the institution is located and whether it meets the 
requirements in any other States for which the institution has 
determined whether the program enables graduates to become licensed or 
work in their field; net-price, completion rates, withdrawal rates, 
program size, and/or any other items currently required under the GE 
disclosure regulations. The Department also asks whether it should 
require institutions to provide links from each of its program pages to 
College Scorecard, its successor site, or any other tools managed by 
the Department.

Public Participation

    On June 16, 2017, we published a notice in the Federal Register (82 
FR 27640) announcing our intent to establish a negotiated rulemaking 
committee under section 492 of the HEA to develop proposed regulations 
to revise the GE regulations published by the Department on October 31, 
2014 (79 FR 64889). We also announced two public hearings at which 
interested parties could comment on the topics suggested by the 
Department and propose additional topics for consideration for action 
by the negotiated rulemaking committee. The hearings were held on--
    July 10, 2017, in Washington, DC; and
    July 12, 2017, in Dallas, TX.
    Transcripts from the public hearings are available at https://www2.ed.gov/policy/highered/reg/hearulemaking/2017/index.html.
    We also invited parties unable to attend a public hearing to submit 
written comments on the proposed topics and to submit other topics for 
consideration. Written comments submitted in response to the June 16, 
2017, Federal Register notice may be viewed through the Federal 
eRulemaking Portal at www.regulations.gov, within docket ID ED-2017-
OPE-0076. Instructions for finding comments are also available on the 
site under ``Help.''

Negotiated Rulemaking

    Section 492 of the HEA, 20 U.S.C. 1098a, requires the Secretary to 
obtain public involvement in the development of proposed regulations 
affecting programs authorized by title IV of the HEA. After obtaining 
extensive input and recommendations from the public, including 
individuals and representatives of groups involved in the title IV, HEA 
programs, the Secretary in most cases must subject the proposed 
regulations to a negotiated rulemaking process. If negotiators reach 
consensus on the proposed regulations, the Department agrees to publish 
without alteration a defined group of regulations on which the 
negotiators reached consensus unless the Secretary reopens the process 
or provides a written explanation to the participants stating why the 
Secretary has decided to depart from the agreement reached during 
negotiations. Further information on the negotiated rulemaking process 
can be found at: www2.ed.gov/policy/highered/reg/hearulemaking/hea08/neg-reg-faq.html.
    On August 30, 2017, the Department published a notice in the 
Federal Register (82 FR 41197) announcing its intention to establish 
two negotiated rulemaking committees and a subcommittee to prepare 
proposed regulations governing the Federal Student Aid programs 
authorized under title IV of the HEA. The notice set forth a schedule 
for the committee meetings and requested nominations for individual 
negotiators to serve on the negotiating committee.
    The Department sought negotiators to represent the following 
groups: Two-year public institutions; four-year public institutions; 
accrediting agencies; business and industry; chief financial officers 
(CFOs) and business officers; consumer advocacy organizations; 
financial aid administrators; general counsels/attorneys and compliance 
officers; legal assistance organizations that represent students; 
minority-serving institutions; private, proprietary institutions with 
an enrollment of 450 students or less; private, proprietary 
institutions with an enrollment of 451 students or more; private, non-
profit institutions; State higher education executive officers; State 
attorneys general and other appropriate State officials; students and 
former students; and groups representing U.S. military service members 
or veteran Federal student loan borrowers. The Department considered 
the nominations submitted by the public and chose negotiators who would 
represent the various constituencies.
    The negotiating committee included the following members:
    Laura Metune, California Community Colleges, and Matthew Moore 
(alternate), Sinclair Community College, representing two-year public 
institutions.
    Pamela Fowler, University of Michigan-Ann Arbor, and Chad Muntz 
(alternate), The University System of Maryland, representing four-year 
public institutions.
    Anthony Mirando, National Accrediting Commission of Career Arts and 
Sciences, and Mark McKenzie (alternate), Accreditation Commission for 
Acupuncture and Oriental Medicine, representing accrediting agencies.
    Roberts Jones, Education & Workforce Policy, and Jordan Matsudaira 
(alternate), Urban Institute and Cornell University, representing 
business and industry.
    Sandy Sarge, SARGE Advisors, and David Silverman (alternate), The 
American Musical and Dramatic Academy, representing CFOs and business 
officers.
    Whitney Barkley-Denney, Center for Responsible Lending, and 
Jennifer Diamond (alternate), Maryland Consumer Rights Coalition, 
representing consumer advocacy organizations.
    Kelly Morrissey, Mount Wachusett Community College, and Andrew 
Hammontree (alternate), Francis Tuttle Technology Center, representing 
financial aid administrators.
    Jennifer Blum, Laureate Education, Inc., and Stephen Chema 
(alternate), Ritzert & Layton, PC, representing general counsels/
attorneys and compliance officers.
    Johnson M. Tyler, Brooklyn Legal Services, and Kirsten Keefe 
(alternate), Empire Justice Center, representing legal

[[Page 40170]]

assistance organizations that represent students.
    Thelma L. Ross, Prince George's Community College, and John K. 
Pierre (alternate), Southern University Law Center, representing 
minority-serving institutions.
    Jessica Barry, School of Advertising Art, and Neal Heller 
(alternate), Hollywood Institute of Beauty Careers, representing 
private, proprietary institutions with an enrollment of 450 students or 
less.
    Jeff Arthur, ECPI University, and Marc Jerome (alternate), Monroe 
College, representing private, proprietary institutions with an 
enrollment of 451 students or more.
    C. Todd Jones, Association of Independent Colleges & Universities 
in Ohio, and Tim Powers (alternate), National Association of 
Independent Colleges and Universities, representing private, non-profit 
institutions.
    Christina Whitfield, State Higher Education Executive Officers 
Association, representing State higher education executive officers.
    Christopher Madaio, Office of the Attorney General of Maryland, and 
Ryan Fisher (alternate), Office of the Attorney General of Texas, 
representing State attorneys general and other appropriate State 
officials.
    Christopher Gannon, United States Student Association, and Ahmad 
Shawwal (alternate), University of Virginia, representing students and 
former students.
    Daniel Elkins, Enlisted Association of the National Guard of the 
United States, and John Kamin (alternate), The American Legion's 
National Veterans Employment & Education Division, representing groups 
representing U.S. military service members or veteran Federal student 
loan borrowers.
    Gregory Martin, U.S. Department of Education, representing the 
Department.
    The negotiated rulemaking committee met to develop proposed 
regulations on December 4-7, 2017, February 5-8, 2018, and March 12-15, 
2018.
    At its first meeting, the negotiating committee reached agreement 
on its protocols and proposed agenda. The protocols provided, among 
other things, that the committee would operate by consensus. Consensus 
means that there must be no dissent by any member in order for the 
committee to have reached agreement. Under the protocols, if the 
committee reached a final consensus on all issues, the Department would 
use the consensus-based language in its proposed regulations. 
Furthermore, the Department would not alter the consensus-based 
language of its proposed regulations unless the Department reopened the 
negotiated rulemaking process or provided a written explanation to the 
committee members regarding why it decided to depart from that 
language.
    During the first meeting, the negotiating committee agreed to 
negotiate an agenda of eight issues related to student financial aid. 
These eight issues were: Scope and purpose, gainful employment metrics 
(later renamed debt-to-earnings metrics), debt calculations, sanctions, 
alternate earnings appeals, program disclosures, reporting 
requirements, and certification requirements. Under the protocols, a 
final consensus would have to include consensus on all eight issues.
    During committee meetings, the committee reviewed and discussed the 
Department's drafts of regulatory language and the committee members' 
alternative language and suggestions. At the final meeting on March 15, 
2018, the committee did not reach consensus on the Department's 
proposed regulations. For this reason, and according to the committee's 
protocols, all parties who participated or were represented in the 
negotiated rulemaking and the organizations that they represent, in 
addition to all members of the public, may comment freely on the 
proposed regulations. For more information on the negotiated rulemaking 
sessions, please visit: https://www2.ed.gov/policy/highered/reg/hearulemaking/2017/gainfulemployment.html.

Data Correction

    During the third meeting of the negotiated rulemaking committee, 
the Department provided negotiators with a number of scatterplots in 
response to a request from several negotiators to compare student loan 
repayment rates between Pell Grant recipients and students who did not 
receive a Pell Grant at individual institutions. The Department 
incorrectly concluded that the repayment rate between Pell Grant 
recipients and Pell Grant non-recipients at all institutions was 1:1. 
While the repayment rates of Pell Grant recipients and non-recipients 
are correlated, there is not a 1:1 relationship between them. The 
Department's analysis shows the difference between the repayment rates 
of Pell Grant recipients and non-recipients is about 20 percentage 
points on average. At institutions with low repayment rates among all 
students, the gap between Pell Grant recipients and non-recipients is 
relatively higher. The gap shrinks among institutions with very high 
overall repayment rates; however, many of these institutions serve 
small proportions of Pell Grant recipients and are highly selective 
institutions (based on mean SAT math scores). The negotiators have been 
informed of the earlier error and the updated scatterplots are 
available on the Department's GE negotiated rulemaking website.

Summary of Proposed Changes

    The proposed regulations would rescind the GE regulations in 
subpart Q of 34 CFR part 668, which establish the eligibility 
requirements for a program that prepares students for gainful 
employment in a recognized occupation, including the D/E rates 
measures, alternate earnings appeals, reporting and disclosure 
requirements, and certifications.

Significant Proposed Regulations

    We group major issues according to subject. We discuss other 
substantive issues under the sections of the proposed regulations to 
which they pertain. Generally, we do not address proposed regulatory 
provisions that are technical or otherwise minor in effect.

Origin and Purpose of the Gainful Employment Regulations

    The definition of ``gainful employment'' established in the 2014 
regulations created a new metric that established bright-line standards 
for a GE program's continuing participation in title IV, HEA programs.
    The GE regulations establish a methodology for calculating mean D/E 
rates for programs that prepare students for gainful employment in a 
recognized occupation. The GE regulations also establish a range of 
acceptable D/E rates programs must maintain in order to retain 
eligibility to participate in the title IV, HEA programs. GE programs 
include non-degree programs at public and non-profit institutions and 
all programs (including undergraduate, graduate, and professional 
degree programs) at proprietary institutions.
    Under the regulations, GE programs must have a graduate debt-to-
discretionary earnings ratio of less than or equal to 20 percent or 
debt-to-annual earnings ratio of less than or equal to 8 percent to 
receive an overall passing rate. Programs with both a discretionary 
earnings rate greater than 30 percent (or a negative or zero 
denominator) and an annual earnings rate greater than 12 percent (or a 
zero denominator) receive an overall failing rate. Programs that fail 
the D/E rates measure for two out of three consecutive years lose title 
IV eligibility. Non-passing programs that have debt-to-discretionary 
income ratios greater than 20 percent and less than or equal to 30 
percent or debt-to-annual income ratios greater than 8 percent and

[[Page 40171]]

less than or equal to 12 percent are considered to be in the ``zone.'' 
Programs with a combination of zone or failing overall rates for four 
consecutive years lose title IV eligibility.
    The first D/E rates were published in 2017, and the Department's 
analysis of those rates raises concern about the validity of the metric 
and how it affects the opportunities for Americans to prepare for high-
demand occupations in the healthcare, hospitality, and personal 
services industries, among others. At a time when 6 million jobs remain 
unfilled due to the lack of qualified workers,\1\ the Department is re-
evaluating the wisdom of a regulatory regime that creates additional 
burden for, and restricts, programs designed to increase opportunities 
for workforce readiness. We further believe the GE regulations 
reinforce an inaccurate and outdated belief that career and vocational 
programs are less valuable to students and less valued by society, and 
that these programs should be held to a higher degree of accountability 
than traditional two- and four-year degree programs that may have less 
market value.
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    \1\ U.S. Department of Labor--Bureau of Labor Statistics. (July 
10, 2018). Economic News Release: Job Openings and Labor Turnover 
Summary. Available at www.bls.gov/news.release/jolts.nr0.htm.
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Research Findings That Challenge the Accuracy and Validity of the D/E 
Rates Measure

    In promulgating the 2011 and 2014 regulations, the Department cited 
as justification for the 8 percent D/E rates threshold a research paper 
published in 2006 by Baum and Schwartz that described the 8 percent 
threshold as a commonly utilized mortgage eligibility standard.\2\ 
However, the Baum & Schwartz paper makes clear that the 8 percent 
mortgage eligibility standard ``has no particular merit or 
justification'' when proposed as a benchmark for manageable student 
loan debt.\3\ The Department previously dismissed this statement by 
pointing to Baum and Schwartz's acknowledging the ``widespread 
acceptance'' of the 8 percent standard and concluding that it is ``not 
unreasonable.'' 79 FR 64889, 64919. Upon further review, we believe 
that the recognition by Baum and Schwartz that the 8 percent mortgage 
eligibility standard ``has no particular merit or justification'' when 
proposed as a benchmark for manageable student loan debt is more 
significant than the Department previously acknowledged and raises 
questions about the reasonableness of the 8 percent threshold as a 
critical, high-stakes test of purported program performance.
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    \2\ Baum, S. & Schwartz, S. How Much Debt is Too Much? Defining 
Benchmarks for Manageable Student Debt. College Board, 2008. 
Available at https://files.eric.ed.gov/fulltext/ED562688.pdf.
    \3\ Ibid.
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    Research published subsequent to the promulgation of the GE 
regulations adds to the Department's concern about the validity of 
using D/E rates as to determine whether or not a program should be 
allowed to continue to participate in title IV programs. As noted in 
the 2014 proposed rule, the Department believed that an improvement of 
quality would be reflected in the program's D/E rates (79 FR 16444). 
However, the highest quality programs could fail the D/E rates measure 
simply because it costs more to deliver the highest quality program and 
as a result the debt level is higher.
    Importantly, the HEA does not limit title IV aid to those students 
who attend the lowest cost institution or program. On the contrary, 
because the primary purpose of the title IV, HEA programs is to ensure 
that low-income students have the same opportunities and choices in 
pursuing higher education as their higher-income peers, title IV aid is 
awarded based on the institution's actual cost of attendance, rather 
than a fixed tuition rate that limits low-income students to the lowest 
cost institutions.\4\
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    \4\ Gladieux, L. Federal Student Aid Policy: A History and an 
Assessment. Financing Postsecondary Education: The Federal Role. 
October 1995. Available at https://www2.ed.gov/offices/OPE/PPI/FinPostSecEd/gladieux.html.
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    Other research findings suggest that D/E rates-based eligibility 
creates unnecessary barriers for institutions or programs that serve 
larger proportions of women and minority students. Such research 
indicates that even with a college education, women and minorities, on 
average, earn less than white men who also have a college degree, and 
in many cases, less than white men who do not have a college degree.\5\
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    \5\ Ma, J., Pender, M. & Welch, M. Education Pays 2016: The 
Benefits of Higher Education for Individuals and Society, 
CollegeBoard, 2016. Fig. 2.4.
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    Disagreement exists as to whether this is due to differences in 
career choices across subgroups, time out of the workforce for 
childcare responsibilities, barriers to high-paying fields that 
disproportionately impact certain groups, or the interest of females or 
minority students in pursuing careers that pay less but enable them to 
give back to their communities. Regardless of the cause of pay 
disparities, the GE regulations could significantly disadvantage 
institutions or programs that serve larger proportions of women and 
minority students and further reduce the educational options available 
to those students.
    It is also important to highlight the importance of place in 
determining which academic programs are available to students. A 
student may elect to enroll in a program that costs more simply because 
a lower-cost program is too far from home or work or does not offer a 
schedule that aligns with the student's work or household 
responsibilities. The average first-time undergraduate student 
attending a two-year public institution enrolls at an institution 
within eight miles of his or her home. The distance increases to 18 
miles for the average first-time undergraduate student enrolling at a 
four-year public institution.\6\ Accordingly, we believe that while it 
is important for a student to know that a program could result in 
higher debt, it is not appropriate to eliminate the option simply 
because a lower-cost program exists, albeit outside of the student's 
reasonable travel distance. In the same way that title IV programs 
enable traditional students to select the more expensive option simply 
because of the amenities an institution offers, or its location in the 
country, they should similarly enable adult learners to select the more 
expensive program due to its convenience, its more personalized 
environment, or its better learning facilities. We support providing 
more information to students and parents that enables them to compare 
the outcomes achieved by graduates of the programs available to them. 
However, due to a number of concerns with the calculation and relevance 
of the debt level included in the rates we do not believe that the D/E 
rates measure achieves a level of accuracy that it should alone 
determine whether or not a program can participate in title IV 
programs.
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    \6\ Hillman, N. & Weichman, T. Education Deserts: The Continued 
Significance of ``Place'' in the Twenty-First Century, American 
Council on Education, 2016. Available at www.acenet.edunews-room/
Pages/CPRS-Viewpoints-Education-Deserts.aspx.
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    While the Department denied the impact of these other factors in 
the 2014 GE regulations, it now recognizes a number of errors included 
in its prior analysis. For example, in the 2014 final rule (79 FR 
64889, 65041-57), the Department stated that changes in economic 
outlook would not cause a program to fail the D/E rates measure or 
remain in the zone for four years. This conclusion was based on the 
finding that the average recession lasted for 11.1 months, which would 
not be long enough to impact a program's outcomes

[[Page 40172]]

for the number of years required to go from ``zone'' to failing. 
However, the Great Recession lasted for well over two years, and was 
followed by an extended ``jobless'' recovery, which would have 
significantly impacted debt and earnings outcomes for a period of time 
that would have exceeded the zone period, had the GE regulations been 
in place during that period.\7\ The Great Recession had an unusually 
profound impact on recent college graduates, who were underemployed at 
an historic rate, meaning that graduates were working in jobs that 
prior to the Great Recession did not require a college credential.\8\ 
The Department concedes that an extended recession coupled with rampant 
underemployment, could have a significant impact on a program's D/E 
rates for a period of time that would span most or all of the zone 
period. Underemployment during the Great Recession was not limited to 
the graduates of GE programs, but included graduates of all types of 
institutions, including elite private institutions.\9\
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    \7\ www.federalreservehistory.org/essays/great_recession_of_200709.
    \8\ Abel, Jaison & Deitz, Richard. Underemployment in the Early 
Career of College Graduates Following the Great Recession, Working 
Paper No. 22654, National Bureau of Economic Research, September 
2016. Available at www.nber.org/papers/w22654.
    \9\ https://money.cnn.com/2011/05/17/news/economy/recession_lost_generation/index.htm.
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    The GE regulations were intended to address the problem of programs 
that are supposed to provide training that prepares students for 
gainful employment in a recognized occupation, but were leaving 
students with unaffordable levels of loan debt compared to the average 
program earnings (79 FR 16426). However, the Department believes there 
are other tools now available to enable students with lower incomes to 
manage high levels of debt. While the existence of income-driven 
repayment plans does not address the high cost of college--and, in 
fact, could make it even easier for students to borrow more than they 
need and institutions to charge high prices--the Department's plans to 
increase transparency will help address these issues. Furthermore, the 
increased availability of these repayment plans with longer repayment 
timelines is inconsistent with the repayment assumptions reflected in 
the shorter amortization periods used for the D/E rates calculation in 
the GE regulations.
    In addition, a program's D/E rates can be negatively affected by 
the fact that it enrolls a large number of adult students who have 
higher Federal borrowing limits, thus higher debt levels, and may be 
more likely than a traditionally aged student to seek part-time work 
after graduation in order to balance family and work responsibilities. 
The Department recognizes that it is inappropriate to penalize 
institutions simply because the students they serve take advantage of 
the higher borrowing capacity Congress has made available to those 
borrowers. It is also inappropriate to penalize institutions because 
students seek part-time work rather than full-time work, or are 
building their own businesses, which may result in lower earnings early 
on. Regardless of whether students elect to work part-time or full-
time, the cost to the institution of administering the program is the 
same, and it is the cost of administering the program that determines 
the cost of tuition and fees. In general, programs that serve large 
proportions of adult learners may have very different outcomes from 
those that serve large proportions of traditionally aged learners, and 
yet the D/E rates measure fails to take any of these important factors 
into account.
    Most importantly, the first set of D/E rates, published in 2016, 
revealed that D/E rates, and particularly earnings, vary significantly 
from one occupation to the next, and across geographic regions within a 
single occupation. The Department had not predicted such substantial 
differences in earnings due to geography, which may have been 
exacerbated by the Great Recession and the speed with which individual 
States reduced their unemployment rate.
    While the Department intended for D/E rates to serve as a mechanism 
for distinguishing between high- and low-performing programs, data 
discussed during the third session of the most recent negotiated 
rulemaking demonstrated that even a small change in student loan 
interest rates could shift many programs from a ``passing'' status to 
``failing,'' or vice versa, even if nothing changed about the programs' 
content or student outcomes. The Department believes that examples such 
as that illustrated here should be corrected and our justifications in 
the 2014 GE regulation did not adequately take these nuances into 
account sufficiently. Table 1 shows how changes in interest rate would 
affect outcomes under the D/E rates measure. For example, if the 
interest rate is seven percent, 831 programs would fail compared to 
only 716 programs if the interest rate is six percent.
---------------------------------------------------------------------------

    \10\ The count of programs includes programs that had 
preliminary rates calculated, but were not designated with an 
official pass, zone, or fail status due to reaccreditation and 
reinstatements of eligibility during the validation process of 
establishing D/E rates.

            Table 1--Number and Percentage of GE 2015 Programs That Would Pass, Fail, or Fall Into the Zone Using Different Interest Rates 10
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Number of programs                            Percentage of programs
                    Interest rate (%)                    -----------------------------------------------------------------------------------------------
                                                               Pass            Zone            Fail            Pass            Zone            Fail
--------------------------------------------------------------------------------------------------------------------------------------------------------
3.......................................................           7,199             998             440              83              12               5
4.......................................................           7,030           1,085             522              81              13               6
5.......................................................           6,887           1,135             615              80              13               7
6.......................................................           6,720           1,201             716              78              14               8
7.......................................................           6,551           1,255             831              76              15              10
8.......................................................           6,326           1,353             958              73              16              11
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Department analysis of GE 2015 rates.

    The Department agrees with a statement made by a negotiator that 
any metric that could render a program ineligible to participate in 
title IV, HEA programs simply because the economy is strong and 
interest rates rise is faulty. The Department believes that it is 
during these times of economic growth, when demand for skilled workers 
is greatest, that it is most critical that shorter-term career and 
technical programs are not unduly burdened or eliminated.
    In addition, the Department now recognizes that assigning a 10-year 
amortization period to graduates of

[[Page 40173]]

certificate and associate degree programs for the purpose of 
calculating D/E rates creates an unacceptable and unnecessary double 
standard since the REPAYE plan regulations promulgated in 2015 provide 
a 20-year amortization period for these same graduates. The REPAYE plan 
acknowledges that undergraduate completers may well need to extend 
payments over a longer amortization period, and makes it clear that 
extended repayment periods are an acceptable and reasonable way to help 
students manage their repayment obligations. Therefore, it is not 
appropriate to use an amortization period of less than 20 years for any 
undergraduate program D/E rates calculations or of less than 25 years 
for any graduate program D/E rates calculations.

Concerns About Disclosures Required Under the GE Regulations

    As the Department is proposing to rescind the GE regulations in 
total, the disclosures required under the current regulations also 
would be rescinded. Generally, we are concerned that it is not 
appropriate to require these types of disclosures for only one type of 
program when such information would be valuable for all programs and 
institutions that receive title IV, HEA funds. However, we cannot 
expand the GE regulations to include programs that are not GE programs. 
In that regard, as indicated above, we are interested in comments on 
whether the Department should require that all institutions disclose 
information, such as net price, program size, completion rates, and 
accreditation and licensing requirements, on their program web pages, 
or if doing so is overly burdensome for institutions.
    The Department has also discovered a variety of challenges and 
errors associated with the disclosures required under the GE 
regulations. For example, there is significant variation in 
methodologies used by institutions to determine and report in-field job 
placement rates, which could mislead students into choosing a lower 
performing program that simply appears to be higher performing because 
a less rigorous methodology was employed to calculate in-field job 
placement rates.
    In some cases, a program is not required to report job placement 
outcomes because it is not required by its accreditor or State to do 
so. In other cases, GE programs at public institutions in some States 
(such as community colleges in Colorado) define an in-field job 
placement for the purpose of the GE disclosure as any job that pays a 
wage, regardless of the field in which the graduate is working. 
Meanwhile, institutions accredited by the Accrediting Commission of 
Career Schools and Colleges must consider the alignment between the job 
and the majority of the educational and training objectives of the 
program, which can be a difficult standard to meet since educational 
programs are designed to prepare students broadly for the various jobs 
that may be available to them, but jobs are frequently more narrowly 
defined to meet the needs of a specific employer.\11\
---------------------------------------------------------------------------

    \11\ ACCSC Standards of Accreditation, Appendix VII--Guidelines 
for Employment Classification, 2015, Available at www.accsc.org/UploadedDocuments/July%202015/Guidelines%20for%20Employment.pdf.
---------------------------------------------------------------------------

    The original 2011 GE regulations required NCES to ``develop a 
placement rate methodology and the processes necessary for determining 
and documenting student employment.'' \12\ This requirement arose out 
of negotiator concerns about the complexity and subjectivity of the 
many job placement definitions used by States, institutional 
accreditors, programmatic accreditors and institutions themselves to 
evaluate outcomes. The Department convened a Technical Review Panel 
(TRP), but in 2013 the TRP reported that not only were job placement 
determinations ``highly subjective'' in nature, but that the TRP could 
not come to consensus on a single, acceptable definition of a job 
placement that could be used to report this outcome on GE disclosures, 
nor could it identify a reliable data source to enable institutions to 
accurately determine and report job placement outcomes.\13\ In light of 
the failure of the TRP to develop a consistent definition of a job 
placement, and well-known instances of intentional or accidental job 
placement rate misrepresentations, the Department believes it would be 
irresponsible to continue requiring institutions to report job 
placement rates. Instead, the Department believes that program-level 
earnings data that will be provided by the Secretary through the 
College Scorecard or its successor is the more accurate and reliable 
way to report job outcomes in a format that students can use to compare 
the various institutions and programs they are considering.
---------------------------------------------------------------------------

    \12\ https://nces.ed.gov/npec/data/Calculating_Placement_Rates_Background_Paper.pdf.
    \13\ https://www2.ed.gov/policy/highered/reg/hearulemaking/2012/ipeds-summary91013.pdf.
---------------------------------------------------------------------------

    The Department also believes that it underestimated the burden 
associated with distributing the disclosures directly to prospective 
students. In 2018, the Department announced that it was allowing 
institutions additional time to meet the requirement in Sec.  
668.412(e) to directly distribute the disclosure template to 
prospective students, as well as the requirement in Sec.  668.412(d) to 
include the disclosure template or a link thereto in program 
promotional materials, pending negotiated rulemaking (82 FR 30975; 83 
FR 28177). A negotiator representing financial aid officials confirmed 
our concerns, stating that large campuses, such as community colleges 
that serve tens of thousands of students and are in contact with many 
more prospective students, would not be able to, for example, 
distribute paper or electronic disclosures to all the prospective 
students in contact with the institution. Although in decades past, 
institutions may have included these materials in the packets mailed to 
a prospective student's home; many institutions no longer mail paper 
documents, and instead rely on web-based materials and electronic 
enrollment agreements. The Department notes that Sec.  668.412(e) 
requires that disclosures be made only to a prospective student before 
that individual signs an enrollment agreement, completes registration, 
or makes a financial commitment to the institution and that the 
institution may provide the disclosure to the student by hand-
delivering the disclosure template to the prospective student or 
sending the disclosure template to the primary email address used by 
the institution for communicating with the prospective student. 
However, ED recognizes that even this requirement has an associated 
burden, especially since institutions are required to retain 
documentation that each student acknowledges that they have received 
the disclosure. The Department believes that the best way to provide 
disclosures to students is through a data tool that is populated with 
data that comes directly from the Department, and that allows 
prospective students to compare all institutions through a single 
portal, ensuring that important consumer information is available to 
students while minimizing institutional burden.
    Finally, more than a few disclosures exclude outcomes because the 
program had fewer than 10 graduates in the award year covered by the 
disclosure template. Because the Department does not collect data from 
the disclosures through a central portal or tool, it has been unable to 
compare the number of completers reported on the GE disclosures posted 
by programs with the number reported through other survey tools. 
Therefore, it is difficult to know if these reports of less than 10 
graduates are accurate.

[[Page 40174]]

Covered Institutions and Programs

    Under its general authority to publish data related to title IV 
program outcomes, and in light of changes to the National Student Loan 
Data System related to the 150% subsidized loan rules requiring 
institutions to report program CIP codes, the Department believes that 
it is important and necessary to publish program-level student outcomes 
to inform consumer choice and enable researchers and policy makers to 
analyze program outcomes. The Department does not believe that GE data 
can adequately meet this goal or inform consumer choice since only a 
small proportion of postsecondary programs are required to report 
program-level outcomes data and, even among GE programs, many programs 
graduate fewer than 10 students per year and are not required to 
provide student outcome information on the GE disclosure. In addition, 
the Department does not believe it is appropriate to attach punitive 
actions to program-level outcomes published by some programs but not 
others. In addition, the Department believes that it is more useful to 
students and parents to publish actual median earnings and debt data 
rather than to utilize a complicated equation to calculate D/E rates 
that students and parents may not understand and that cannot be 
directly compared with the debt and earnings outcomes published by non-
GE programs. For all the reasons set forth in this NPRM, the Department 
believes it would be unwise policy to continue using the D/E rates for 
reporting or eligibility purposes.
    In addition, the GE regulations targeted proprietary institutions, 
aiming to eliminate poor performers and ``bad actors'' in the sector. 
While bad actors do exist in the proprietary sector, the Department 
believes that there are good and bad actors in all sectors and that the 
Department, States, and accreditors have distinct roles and 
responsibilities in holding all bad actors accountable. Prior to 2015, 
when the Department started collecting program-level data for all 
completers, the GE regulations provided a unique opportunity for the 
Department to calculate program-level outcomes. Now that the Department 
collects program information for all completers, it can easily expand 
program-level outcomes reporting for all institutions. Therefore, not 
only does the Department believe that the D/E rates calculation is not 
an appropriate measure for determining title IV eligibility, the 
availability of program-level data for all completers makes it possible 
to provide median earnings and debt data for all programs, thereby 
providing a more accurate mechanism for providing useful information to 
consumers.
    Further, the Department has reviewed additional research findings, 
including those published by the Department in follow-up to the 
Beginning Postsecondary Survey of 1994, and determined that student 
demographics and socioeconomic status play a significant role in 
determining student outcomes.\14\ The GE regulations failed to take 
into account the abundance of research that links student outcomes with 
a variety of socioeconomic and demographic risk factors, and similarly 
failed to acknowledge that institutions serving an older student 
population will likely have higher median debt since Congress has 
provided higher borrowing limits for older students who are less likely 
than traditional students to receive financial support from parents.
---------------------------------------------------------------------------

    \14\ https://nces.ed.gov/pubs/web/97578g.asp.
---------------------------------------------------------------------------

    Students select institutions and college majors for a wide variety 
of reasons, with cost and future earnings serving as only two data 
points within a more complex decision-making process. For the reasons 
cited throughout this document, the Department has reconsidered its 
position.
    Well-publicized incidents of non-profit institutions 
misrepresenting their selectivity levels, inflating the job placement 
rates of their law school graduates, and even awarding credit for 
classes that never existed demonstrate that bad acts occur among 
institutions regardless of their tax status.15 16 17 18
---------------------------------------------------------------------------

    \15\ www.forbes.com/sites/stevecohen/2012/09/29/the-three-biggest-lies-in-college-admission/#9ed5ccc1754f.
    \16\ www.nytimes.com/2012/02/01/education/gaming-the-college-rankings.html.
    \17\ www.cnn.com/2014/10/22/us/unc-report-academic-fraud/index.html.
    \18\ www.wsj.com/articles/temple-university-fires-a-dean-over-falsified-rankings-data-1531498822.
---------------------------------------------------------------------------

    The GE regulations underestimated the cost of delivering a program 
and practices within occupations that may skew reported earnings. 
According to Delisle and Cooper, because public institutions receive 
State and local taxpayer subsidies, ``even if a for-profit institution 
and a public institution have similar overall expenditures (costs) and 
graduate earnings (returns on investment), the for-profit institution 
will be more likely to fail the GE rule, since more of its costs are 
reflected in student debt.'' \19\ Non-profit, private institutions 
also, in general, charge higher tuition and have students who take on 
additional debt, including enrolling in majors that yield societal 
benefits, but not wages commensurate with the cost of the institution.
---------------------------------------------------------------------------

    \19\ Delisle, J. and Cooper, P. (2017). Measuring Quality or 
Subsidy? How State Appropriations Rig the Federal Gainful Employment 
Test. Do state subsidies for public universities favor the affluent? 
Brookings Institute. Available at www.aei.org/publication/measuring-quality-or-subsidy-how-state-appropriations-rig-the-federal-gainful-employment-test/.
---------------------------------------------------------------------------

    Challenges have been brought alleging cosmetology and hospitality 
programs have felt a significant impact due to the GE regulations. In 
the case of cosmetology programs, State licensure requirements and the 
high costs of delivering programs that require specialized facilities 
and expensive consumable supplies may make these programs expensive to 
operate, which may be why many public institutions do not offer them. 
In addition, graduates of cosmetology programs generally must build up 
their businesses over time, even if they rent a chair or are hired to 
work in a busy salon.
    Finally, since a great deal of cosmetology income comes from tips, 
which many individuals fail to accurately report to the Internal 
Revenue Service, mean and median earnings figures produced by the 
Internal Revenue Service under-represent the true earnings of many 
workers in this field in a way that institutions cannot control.\20\ 
Litigation filed by the American Association of Cosmetology Schools 
(AACS) asserting similar claims highlighted the importance of the 
alternate earnings appeal to allow institutions to account for those 
earnings.
---------------------------------------------------------------------------

    \20\ https://www.irs.gov/newsroom/irs-releases-new-tax-gap-estimates-compliance-rates-remain-statistically-unchanged-from-previous-study.
---------------------------------------------------------------------------

    While the GE regulations include an alternate earnings appeals 
process for programs to collect data directly from graduates, the 
process for developing such an appeal has proven to be more difficult 
to navigate than the Department originally planned. The Department has 
reviewed earnings appeal submissions for completeness and considered 
response rates on a case-by-case basis since the response rate 
threshold requirements were set aside in the AACS litigation. Through 
this process, the Department has corroborated claims from institutions 
that the survey response requirements of the earnings appeals 
methodology are burdensome given that program graduates are not 
required to report their earnings to their institution or to the 
Department, and there is no mechanism in place for institutions to 
track students after they complete the program. The process of 
Departmental review of individual appeals has been time-

[[Page 40175]]

consuming and resource-intensive, with great variations in the format 
and completeness of appeals packages. The contents of some of these 
review packages would suggest continued confusion about requirements on 
the part of schools that would be problematic if those earnings were 
still tied to any kind of eligibility threshold.
    Executive Order 13777 instructs agencies to reduce unnecessary 
burden on regulated entities, while at the same time emphasizing the 
need for greater transparency. The Department believes that its 
proposed rescission of the GE regulations is consistent with Executive 
Order 13777 because the GE regulations place tremendous burden upon 
certain programs and institutions, as evidenced by comments from 
negotiators representing institutions not currently covered by the GE 
regulations that extending the regulations to include their institution 
would impose tremendous and costly burden. As noted by various 
associations and institutions in response to the Department's request 
for public feedback on which regulations should be repealed, modified, 
or replaced, a large number of community colleges whose GE programs 
have not been in danger of failing the D/E rates measure have 
complained about the cost of complying with the GE regulations, which 
has been viewed as far out of proportion with the corresponding student 
benefits. For example, the American Association of Community Colleges 
pointed to the regulations' extensive reporting and disclosure 
requirements.\21\ Despite this additional burden to GE programs, the GE 
regulations provide only limited transparency since the regulations 
apply to a small subset of title IV-eligible programs. Instead, the 
Department believes that its efforts to expand the College Scorecard, 
which includes all programs that participate in the title IV, HEA 
programs, to include program-level earnings, debt, and other data, will 
better accomplish our goal of increasing transparency.
---------------------------------------------------------------------------

    \21\ American Association of Community College. (September 20, 
2017). Comments of the American Association of Community Colleges. 
Docket ID: ED-2017-OS-0074. Available at https://www.regulations.gov/document?D=ED-2017-OS-0074-15336.
---------------------------------------------------------------------------

    The GE regulations include, among other things, a complicated 
formula for calculating a program's D/E rates, a set of thresholds that 
are used to determine whether a program's D/E rates are passing, 
failing, or in the zone, and a number of disclosure requirements. The 
D/E rates measure compares median student loan debt (including 
institutional, private, and Federal loan debt), as reported by 
institutions and the National Student Loan Data System, to the higher 
of mean and median earnings obtained from the Social Security 
Administration.
    Further, we believe that the analysis and assumptions with respect 
to earnings underlying the GE regulations are flawed. In 2014, upon the 
introduction of the GE regulations, the Department claimed that 
graduates of many GE programs had earnings less than those of the 
average high school dropout.\22\ The Washington Post highlighted 
several errors in this comparison including that the Department failed 
to explain that the three-year post-graduation GE earnings compared the 
earnings of recent graduates with the earnings of a population of high 
school graduates that could include those who are nearing the end of 
40-year careers or who own successful long-existing businesses.\23\ 
Further comparisons to non-college graduates need to be contextualized, 
given that the average person who completes a registered apprenticeship 
earns a starting salary of more than $60,000 per year, and some college 
graduates who pursue careers in allied health, education, or human 
services--regardless of what college they attended--earn less than non-
college graduates who complete an apprenticeship program.\24\
---------------------------------------------------------------------------

    \22\ www.ed.gov/news/press-releases/obama-administration-takes-action-protect-americans-predatory-poor-performing-ca/.
    \23\ www.washingtonpost.com/news/fact-checker/wp/2014/04/11/the-obama-administrations-claim-that-72-percent-of-for-profits-programs-have-graduates-making-less-than-high-school-dropouts/
    \24\ Ibid.
---------------------------------------------------------------------------

    The Census Bureau, in its landmark 2002 report, The Big Payoff, was 
careful to explain that individual earnings may differ significantly 
due to a variety of factors, including an individual's work history, 
college major, personal ambition, and lifestyle choices.\25\ The report 
also pointed out that even some individuals with graduate degrees, such 
as those in social work or education, may fail to earn as much as a 
high school graduate who works in the skilled trades. In other words, 
both debt and earnings outcomes depend on a number of factors other 
than program quality or institutional performance. There are tremendous 
complexities involved in comparing earnings, especially since 
prevailing wages differ significantly from one occupation to the next 
and one geographic region to the next.\26\ Therefore, a bright-line D/E 
rates measure ignores the many research findings that were either not 
taken into account in publishing the GE regulations or that were 
published since the GE regulations were promulgated, that have 
demonstrated over and over again that gender, socioeconomic status, 
race, geographic location, and many other factors affect earnings.\27\ 
\28\ \29\ Even among the graduates of the Nation's most prestigious 
colleges, earnings vary considerably depending upon the graduate's 
gender, the field the graduate pursued, whether or not the graduate 
pursued full-time work, and the importance of work-life balance to the 
individual.\30\ And yet, the Department has never contended that the 
majors completed by the lower-earning graduates were lower performing 
or lower quality than those that result in the highest wages.
---------------------------------------------------------------------------

    \25\ Cheeseman Day, J. & Newburger, E. The Big Payoff: 
Educational Attainment and Synthetic Estimates of Work-Life 
Earnings, Current Population Reports, U.S. Department of Commerce, 
Economics and Statistics Administration, U.S. Census Bureau, 2002. 
Available at www.census.gov/content/dam/Census/ibrary/publications/2002/demo/p23-210.pdf.
    \26\ nces.ed.gov/pubs2006/2006321.pdf.
    \27\ www.brookings.edu/wp-content/uploads/2016/07/Deconstructing-and-Reconstructing-the-College-Scorecard.pdf.
    \28\ trends.collegeboard.org/sites/default/files/education-pays-2016-full-report.pdf.
    \29\ nces.ed.gov/pubs/web/97578g.asp.
    \30\ Witteveen, D. & Attewell, P. The earnings payoff from 
attending a selective college. Social Science Research 66 (2017) 
154-169. Available at www.sciencedirect.com/science/article/pii/S0049089X16301430.
---------------------------------------------------------------------------

Additional Disclosures

    The Department published in the Federal Register on November 1, 
2016, regulations known as the Borrower Defenses to Repayment (BD) 
regulations (81 FR 75926). The effective date of the BD regulations was 
most recently delayed until July 1, 2019 (83 FR 6458) to allow for 
additional negotiated rulemaking to reconsider those regulations. 
Following the conclusion of the negotiated rulemaking process, on July 
31, 2018, the Department published in the Federal Register a notice of 
proposed rulemaking in which the Department proposes, among other 
things, to withdraw (i.e., rescind) specified provisions of the BD 
regulations already published but not yet effective.
    Among these BD regulations are two disclosures that were included 
among the topics for negotiation by the GE negotiating committee, as 
part of the larger discussion about the disclosure requirements in the 
GE regulations. One of these provisions would have required proprietary 
institutions to provide a warning to students if the loan repayment 
rate for the institution did not meet a specified bright-line

[[Page 40176]]

standard. The other provision would have required institutions to 
notify students if the institution was required under other provisions 
of the BD regulations to provide the Department with financial 
protection, such as a letter of credit.
    In response to the 2016 Borrower Defense proposed regulations, the 
Department received many comments contending that the regulations 
unfairly targeted proprietary institutions (81 FR 75934). Others 
commented that the loan repayment rate disclosure reflected financial 
circumstances and not educational quality. The Department believes that 
these comments are in line with how the Department views GE and the 
reasons provided for rescinding it. As such, the Department also 
proposes to remove the requirement for institutions to disclose 
information related to student loan repayment rates. With respect to 
the financial protection disclosure, the Department believes that 
matters such as the calculation of an institution's composite score and 
requirements regarding letters of credit are complex and beyond the 
level of understanding of a typical high school graduate considering 
enrollment in a postsecondary education program. Therefore, a student 
may misjudge the meaning of such a disclosure to indicate the imminent 
closure of the institution, which is not necessarily the case. While in 
certain instances, a letter of credit may serve as an indicator of 
financial risk to taxpayers, there are other instances where this may 
not be the case. Therefore, the Department proposes to remove the 
requirement for institutions to disclose that they are required to post 
a letter of credit and the related circumstances.
    In discussion with the negotiators, those representing attorneys 
general, legal organizations, and student advocacy groups opposed 
eliminating these disclosures because they believed the disclosures 
would benefit students. However, the Department believes that these 
disclosures will not provide meaningful or clear information to 
students, and will increase cost and burden to institutions that would 
have to disclose this information.
    Although these two disclosures were discussed by the negotiated 
rulemaking committee convened to consider the GE regulations, because 
they are formally associated with the borrower defense regulations, 
their proposed withdrawal is addressed through the proposed regulatory 
text in the 2018 notice of proposed rulemaking relating to the BD 
regulations.
    In summary, the Department proposes to rescind the GE regulations 
for a number of reasons, including:
     Research findings published subsequent to the promulgation 
of the regulation confirm that the D/E rates measure is inappropriate 
for determining an institution's continuing eligibility for title IV 
participation;
     A review of GE disclosures posted by institutions over the 
last two years has revealed troubling inconsistencies in the way that 
job placement rates are determined and reported;
     The use of a standardized disclosure template and the 
physical distribution of disclosures to students is more burdensome 
than originally predicted; and
     GE outcomes data reveal the disparate impact that the GE 
regulation has on some academic programs.
    In July 2018, the Department published a notice of proposed 
rulemaking that more appropriately addresses concerns about 
institutional misrepresentation by providing direct remedies to 
students harmed by such misrepresentations (83 FR 37242). In addition, 
the Department believes that by publishing outcomes data through the 
College Scorecard for all title IV participating programs, it will be 
more difficult for institutions to misrepresent likely program 
outcomes, including earnings or job placement rates, which should not 
be determined or published until such time that a reliable data source 
is identified to validate such data. For the reasons cited above, the 
Department proposes to amend or rescind the GE regulations.

Scope of the Proposed Regulations

1. Removal of GE Regulations
    The Department proposes to rescind the GE regulations because, 
among other things, they are based on a D/E metric that has proven to 
not be an appropriate proxy for use in determining continuing 
eligibility for title IV participation; they incorporate a threshold 
that the researchers whose work gave rise to the standard questioned 
the relevance of to student loan borrowing levels; and they rely on a 
job placement rate reporting requirement that the Department was unable 
to define consistently or provide a data source to ensure its 
reliability and accuracy and that has since been determined is 
unreliable and vulnerable to accidental or intentional misreporting. In 
addition, because the GE regulations require only a small portion of 
higher education programs to report outcomes, they do not adequately 
inform consumer choice or help borrowers compare all of their available 
options.
    Therefore, the Department proposes to rescind the GE regulations. 
Removal of the GE regulations would include removing the provisions in 
Sec.  668.401 through Sec.  668.415, including the provisions regarding 
the scope and purpose of those regulations (Sec.  668.401), the gainful 
employment framework (Sec.  668.403), calculating D/E rates, issuing 
and challenging those rates, and providing for a D/E rates alternate 
earnings appeal (Sec.  668.404-Sec.  668.406). Consequently, by 
removing the provisions pertaining to the D/E rates measure, the 
consequences of the D/E rates measure would also be removed from the 
regulations (Sec.  668.410), as well as the required certifications 
(Sec.  668.414). In addition, current sections that condition title IV 
eligibility on outcomes under the D/E rates measure, the methodology 
for calculating the D/E rates, the reporting requirements necessary to 
calculate D/E rates and certain other certifications and disclosures, 
and subpart R pertaining to program cohort default rates, a potential 
disclosure item, would no longer be required, and the Department 
proposes to remove those sections, as well (Sec. Sec.  668.411-668.413; 
subpart R).
2. Technical and Conforming Changes
    Proposed Sec.  600.10(c)(1) would remove current paragraph (i) and 
redesignate the remaining paragraphs. Current Sec.  600.10(c)(1)(i) 
establishes title IV eligibility for GE programs. The Department's 
proposed regulations would remove the GE regulations referenced in this 
paragraph, and therefore we are proposing to remove this paragraph and 
renumber this section. This technical correction was proposed during 
the negotiations because the Department proposed removing the GE 
regulations and moving to a disclosure-only framework. Discussion 
related to the removal of sanctions and the disclosure framework is 
summarized above, but there were no additional comments made solely on 
this technical change. Additionally, proposed Sec.  600.10(c)(1)(iii) 
would require programs that are at least 300 clock hours but less than 
600 clock hours and do not admit as regular students only persons who 
have completed the equivalent of an associate's degree to obtain the 
Secretary's approval to be eligible for title IV aid student loans. 
This is consistent with Sec.  668.8(d) where programs of at least 300 
clock hours are referenced and is consistent with the statute. This 
proposal was also made during the negotiations, but the

[[Page 40177]]

committee did not have comments related to this aspect of the 
proposals.
    The Department also proposes to remove references to subpart Q in 
Sec.  600.21(a)(11) as part of its proposed removal of the GE 
regulations. Likewise, we propose technical edits to Sec.  668.8(d) to 
remove references to subpart Q. The Department also proposes to remove 
and reserve current Sec.  668.6, which lists disclosure requirements 
for GE programs that ceased to have effect upon the effective date of 
the disclosure requirements under the 2014 GE regulations.

Executive Orders 12866, 13563, and 13771

    Under Executive Order 12866, it must be determined whether this 
regulatory action is ``significant'' and, therefore, subject to the 
requirements of the Executive order and subject to review by the Office 
of Management and Budget (OMB). Section 3(f) of Executive Order 12866 
defines a ``significant regulatory action'' as an action likely to 
result in a rule that may--
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or State, local, or 
Tribal governments or communities in a material way (also referred to 
as an ``economically significant'' rule);
    (2) Create serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts of entitlement grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles stated in the 
Executive order.
    This proposed regulatory action is an economically significant 
regulatory action subject to review by OMB under section 3(f) of 
Executive Order 12866 because it would have an annual effect on the 
economy of over $100 million.
    Under Executive Order 13771, for each new regulation that the 
Department proposes for notice and comment or otherwise promulgates 
that is a significant regulatory action under Executive Order 12866 and 
that imposes total costs greater than zero, it must identify two 
deregulatory actions. For FY 2018, any new incremental costs associated 
with a new regulation must be fully offset by the elimination of 
existing costs through deregulatory actions, unless required by law or 
approved in writing by the Director of the OMB. Because these proposed 
regulations do not impose total costs greater than zero, the 
requirement to offset new regulations in Executive Order 13771 would 
not apply.
    We have also reviewed these regulations under Executive Order 
13563, which supplements and explicitly reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, Executive Order 
13563 requires that an agency--
    (1) Propose or adopt regulations only on a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor its regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives and taking into 
account--among other things, and to the extent practicable--the costs 
of cumulative regulations;
    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than the behavior or manner of compliance a regulated entity must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including economic incentives--such as user fees or 
marketable permits--to encourage the desired behavior, or provide 
information that enables the public to make choices.
    Executive Order 13563 also requires an agency ``to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible.'' The Office of 
Information and Regulatory Affairs of OMB has emphasized that these 
techniques may include ``identifying changing future compliance costs 
that might result from technological innovation or anticipated 
behavioral changes.''
    We are issuing this proposed regulatory action only on a reasoned 
determination that its benefits justify its costs. In choosing among 
alternative regulatory approaches, we selected those approaches that 
would maximize net benefits. Based on the analysis that follows, the 
Department believes that these proposed regulations are consistent with 
the principles in Executive Order 13563.
    We also have determined that this regulatory action would not 
unduly interfere with State, local, and Tribal governments in the 
exercise of their governmental functions.

Regulatory Impact Analysis

    In accordance with the Executive orders, the Department has 
assessed the potential costs and benefits, both quantitative and 
qualitative, of this regulatory action. This proposed regulatory action 
would have an annual economic benefit of approximately $209 million in 
reduced paperwork burden and increased transfers to Pell Grant 
recipients and student loan borrowers and subsequently institutions of 
about $518 million annually at the 7 percent discount rate, as further 
explained in the Analysis of Costs and Benefits section.

A. Need for Regulatory Action

    This regulatory action is necessary to comply with Executive Order 
13777, whereby the President instructed agencies to reduce unnecessary 
burden on regulated entities and to increase transparency. Because the 
GE regulations significantly burden certain programs and institutions 
but provide limited transparency at only a small subset of title IV-
eligible programs, the Department proposes to rescind them.
    Furthermore, when developing the GE regulations, the Department, as 
noted in feedback received from multiple institutions, underestimated 
the burden on institutions associated with the use of a standardized 
disclosure template in publishing program outcomes and distributing 
notifications directly to prospective and current students. For 
example, the estimate did not include an assessment of burden on the 
government to support the development of an approved disclosure 
template and the distribution of the template populated with the 
appropriate data. The Department has determined that it would be more 
efficient to publish data using the College Scorecard, not only to 
reduce reporting burden but to enable students to more readily review 
the data and compare institutions.

B. Analysis of Costs and Benefits

    These proposed regulations would affect prospective and current 
students; institutions with GE programs participating in the title IV, 
HEA programs; and the Federal government. The Department expects 
institutions and the Federal government would benefit as the action 
would remove highly burdensome reporting, administrative costs, and 
sanctions. The Department has also analyzed the costs of this 
regulatory action and has determined that it would impose no additional 
costs ($0). As detailed earlier,

[[Page 40178]]

pursuant to this proposed regulatory action, the Department would 
remove the GE regulations and adopt no new ones.
1. Students
    The proposed removal of the GE regulations may result in both costs 
and benefits to students, including the costs and benefits associated 
with continued enrollment in zone and failing GE programs and the 
benefit of reduced information collections. Students may see costs from 
continued enrollment in programs that may have, if the GE regulations 
were in effect, lost title IV eligibility and the student would have 
discontinued enrollment. Students may also see benefits from not having 
to transfer to another institution in cases where their program would 
have lost title IV eligibility. Burden on students will be reduced by 
not having to respond to schools to acknowledge receipt of disclosures.
    There are student costs and benefits associated with enrollment in 
a program that would have otherwise lost eligibility to participate in 
the title IV, HEA programs under the GE regulations; however, the 
actual outcome for students enrolled in failing or zone programs under 
the GE regulations is unknown. Under the GE regulations, if a GE 
program becomes ineligible to participate in the title IV, HEA 
programs, students would not be able to receive title IV aid to enroll 
in it. Because D/E rates have been calculated under the GE regulations 
for only one year, no programs have lost title IV, HEA eligibility. 
However, 2,050 programs were identified as failing programs or programs 
in the zone based on their 2015 GE rates and are at risk of losing 
eligibility under the GE regulations. In 2015-16, 329,250 students were 
enrolled in zone GE programs and 189,920 students were enrolled in 
failing programs.
    Under the proposed regulations, the Department would discontinue 
certain GE information collections, which is detailed further in the 
Paperwork Reduction Act of 1995 section of this preamble. Two of these 
information collections impact students--OMB control number 1845-0123 
and OMB control number 1845-0107. By removing these collections, the 
proposed regulations would reduce burden on students by 2,167,129 hours 
annually. The burden associated with these information collections is 
attributed to students being required to read the warning notices and 
certify that they received them. Therefore, using the individual hourly 
rate of $16.30, the benefit due to reduced burden for students is 
$35,324,203 annually (2,167,129 hours per year * $16.30 per hour).
2. Institutions
    The proposed regulations would also benefit institutions 
administering GE programs. These institutions would have a reduced 
paperwork burden and no longer be subject to a potential loss of title 
IV eligibility. The table below shows the distribution of institutions 
administering GE programs by sector.

            Table 2--Institutions With 2015 GE programs \31\
------------------------------------------------------------------------
                  Type                     Institutions      Programs
------------------------------------------------------------------------
Public..................................             865           2,493
Private.................................             206             476
Proprietary.............................           1,546           5,681
    Total...............................           2,617           8,650
------------------------------------------------------------------------

    All 2,617 institutions with GE programs would see savings from 
reduced reporting requirements due to removal of the GE regulations. As 
discussed further in the Paperwork Reduction Act of 1995 section of 
this preamble, reduction in burden associated with removing the GE 
regulatory information collections for institutions is 4,758,499 hours. 
Institutions would benefit from these proposed changes, which would 
reduce their costs by $173,923,138 annually using the hourly rate of 
$36.55.
    Under the proposed regulations, programs that had or have D/E rates 
that are failing or in the zone could see benefits because they would 
no longer be subject to sanctions, incur the cost of appealing failing 
or zone D/E rates, or be at risk of losing their title IV eligibility. 
Specifically, 778 institutions administering 2,050 zone or failing GE 
programs would receive these benefits, which represents 24 percent of 
the 8,650 2015 GE programs. Disaggregation of these program counts and 
counts by institutional type are provided in the table below.

                        Table 3--Institutions With 2015 GE zone or Failing Programs \32\
----------------------------------------------------------------------------------------------------------------
                                                                                                      Zone or
                     Type                         Institutions     Zone programs      Failing         failing
                                                                                     programs        programs
----------------------------------------------------------------------------------------------------------------
Public.......................................                  9               9  ..............               9
Private......................................                 34              68              21              89
Proprietary..................................                735           1,165             787           1,952
                                              ------------------------------------------------------------------
    Total....................................                778           1,242             808           2,050
----------------------------------------------------------------------------------------------------------------

    Cosmetology undergraduate certificate programs are the most common 
type of program in the zone or failing categories. Among the 895 
cosmetology undergraduate certificate programs with
---------------------------------------------------------------------------

    \31\ The count of programs includes programs that had 
preliminary rates calculated, but were not designated with an 
official pass, zone, or fail status due to reaccreditation and 
reinstatements of eligibility during the validation process of 
establishing D/E rates.
    \32\ The count of programs includes programs that had 
preliminary rates calculated, but were not designated with an 
official pass, zone, or fail status due to reaccreditation and 
reinstatements of eligibility during the validation process of 
establishing D/E rates.
---------------------------------------------------------------------------

a 2015 GE rate, 91 failed the D/E rates measure and 270 fell into the 
zone. Table 4 shows the most frequent types of programs with failing or 
zone D/E rates. These programs and their institutions would be most 
significantly affected by the proposed removal of GE sanctions as they 
would continue to be eligible to participate in title IV, HEA programs. 
As indicated in the Accounting Statement, the money received by these 
institutions is a transfer from the taxpayers through students who 
choose to attend the institutions' programs.

[[Page 40179]]



                  Table 4--Zone or Failing 2015 GE Programs by Frequency of Program Types \33\
----------------------------------------------------------------------------------------------------------------
                CIP                     Credential level       Zone       Fail     Zone or Fail    All programs
----------------------------------------------------------------------------------------------------------------
Cosmetology/Cosmetologist, General.  Undergraduate                270         91             361             895
                                      Certificate.
Medical/Clinical Assistant.........  Associates Degree....         35         56              91             119
Medical/Clinical Assistant.........  Undergraduate                 78         12              90             424
                                      Certificate.
Massage Therapy/Therapeutic          Undergraduate                 43          4              47             270
 Massage..                            Certificate.
Business Administration and          Associates Degree....         24         22              46              74
 Management, General..
Legal Assistant/Paralegal..........  Associates Degree....         20         25              45              58
Barbering/Barber...................  Undergraduate                 22         16              38              96
                                      Certificate.
Graphic Design.....................  Associates Degree....         16         17              33              45
Criminal Justice/Safety Studies....  Associates Degree....         20         11              31              41
Massage Therapy/Therapeutic          Associates Degree....          8         19              27              33
 Massage..
All other programs.................  .....................        706        535           1,241           6,595
                                    ----------------------------------------------------------------------------
    Total..........................  .....................      1,242        808           2,050           8,650
----------------------------------------------------------------------------------------------------------------

3. Federal Government
    Under the proposed regulations, the Federal government would 
benefit from reduced administrative burden associated with removing 
provisions in the GE regulations and from discontinuing information 
collections. The Federal government would incur annual costs to fund 
more Pell Grants and title IV loans, as discussed in the Net Budget 
Impact section.
---------------------------------------------------------------------------

    \33\ The count of programs includes programs that had 
preliminary rates calculated, but were not designated with an 
official pass, zone, or fail status due to reaccreditation and 
reinstatements of eligibility during the validation process of 
establishing D/E rates.
---------------------------------------------------------------------------

    Reduced administrative burden due to the proposed regulatory 
changes would result from removing the provisions in the GE regulations 
regarding sending completer lists to institutions, adjudicating 
completer list corrections, adjudicating challenges, and adjudicating 
alternate earnings appeals. Under the GE regulations, the Department 
expects to receive about 500 earnings appeals annually and estimates 
that it would take Department staff 10 hours per appeal to evaluate the 
information submitted. Using the hourly rate of a GS-13 Step 1 in the 
Washington, DC area of $46.46,\34\ the estimated benefit due to reduced 
costs from eliminating earnings appeals is $232,300 annually (500 
earnings appeals * 10 hours per appeal * $46.46 per hour). Similarly, 
the Department sends out 31,018 program completer lists to institutions 
annually and estimates that it takes about 40 hours total to complete. 
Using the hourly rate of a GS-14 Step 1 in the Washington, DC area of 
$54.91,\35\ the estimated benefit due to reduced costs from eliminating 
sending completer lists is $2,196 annually (40*54.91). Institutions can 
correct and challenge the lists, and for the 2015 D/E rates the 
Department processed 90,318 completer list corrections and adjudicated 
2,894 challenges. The Department estimates it took Department staff 
1,420 hours total to make completer list corrections. Similarly, the 
Department estimates it took $1,500,000 in contractor support and 1,400 
hours of Federal staff time total to adjudicate the challenges. Using 
the hourly rate of a GS-13 step 1 in the Washington, DC area of $46.46, 
the estimated benefit due to reduced costs from eliminating completer 
lists, corrections, and challenges is $1,631,017 ($1,500,000 contractor 
support + (1420 + 1400) staff hours * $46.46 per hour).
---------------------------------------------------------------------------

    \34\ Salary Table 2018-DCB effective January 2018. Available at 
www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2018/DCB_h.pdf.
    \35\ Ibid.
---------------------------------------------------------------------------

    Finally, under the proposed regulations, the Department would 
rescind information collections with OMB control numbers 1845-0121, 
1845-1022, and 1845-0123. This would result in a Federal government 
benefit due to reduced contractor costs of $23,099,946 annually. 
Therefore, the Department estimates an annual benefit due to reduced 
administrative costs under the proposed regulations of $24,965,459 
($232,300 + $2,196 + $1,631,017 + $23,099,946).
    The Department would also incur increased budget costs due to 
increased transfers of Pell Grants and title IV loans, as discussed 
further in the Net Budget Impacts section. The estimated annualized 
costs of increased Pell Grants and title IV loans from eliminating the 
GE regulations is approximately $518 to $527 million at 7 percent and 3 
percent discount rates, respectively. The Department recognizes that 
this may be offset by student and institutional response to 
institutional and program level disclosures in the College Scorecard 
and other resources, but, as discussed in the Net Budget Impact 
section, the Department does not specifically quantify those impacts.

C. Net Budget Impacts

    The Department proposes to remove the GE regulations, which include 
provisions for GE programs' loss of title IV, HEA program eligibility 
based on performance on the D/E rates measure. In estimating the impact 
of the GE regulations at the time they were developed and in subsequent 
budget estimates, the Department attributed some savings in the Pell 
Grant program based on the assumption that some students, including 
prospective students, would drop out of postsecondary education as 
their programs became ineligible or imminently approached 
ineligibility.
    This assumption has remained in the baseline estimates for the Pell 
Grant program, with an average of approximately 123,000 dropouts 
annually over the 10-year budget window from FY2019 to FY2028. By 
applying the estimated average Pell Grant per recipient for proprietary 
institutions ($3,649) for 2019 to 2028 in the PB2019 Pell Baseline, the 
estimated net budget impact of the GE regulations in the PB2019 Pell 
baseline is approximately $-4.5 billion. As was indicated in the 
Primary Student Response assumption in the 2014 GE final rule,\36\ much 
of this impact was expected to come from the warning that a program 
could lose eligibility in the next year. If we attribute all of the 
dropout effect to loss of eligibility, it would generate a maximum 
estimated Federal net budget impact of the proposed regulations of $4.5 
billion in

[[Page 40180]]

costs by removing the GE regulations from the PB2019 Pell Grant 
baseline.
---------------------------------------------------------------------------

    \36\ See 79 FR 211, Table 3.4: Student Response Assumptions, p. 
65077, published October 31, 2014. Available at www.regulations.gov/document?D=ED-2014-OPE-0039-2390. The dropout rate increased from 5 
percent for a first zone result and 15 percent for a first failure 
to 20 percent for the fourth zone, second failure, or ineligibility.
---------------------------------------------------------------------------

    The Department also estimated an impact of warnings and 
ineligibility in the analysis for the final 2014 GE rule, that, due to 
negative subsidy rates for PLUS and Unsubsidized loans at the time, 
offset the savings in Pell Grants by $695 million.\37\ The effect of 
the GE regulations is not specifically identified in the PB2019 
baseline, but it is one of several factors reflected in declining loan 
volume estimates. The development of GE regulations since the first 
negotiated rulemaking on the subject was announced on May 26, 2009, has 
coincided with demographic and economic trends that significantly 
influence postsecondary enrollment, especially in career-oriented 
programs classified as GE programs under the GE regulations. Enrollment 
and aid awarded have both declined substantially from peak amounts in 
2010 and 2011.
---------------------------------------------------------------------------

    \37\ See 79 FR 211, pp 65081-82, available at 
www.regulations.gov/document?D=ED-2014-OPE-0039-2390.
---------------------------------------------------------------------------

    As classified under the GE regulations, GE programs serve non-
traditional students who may be more responsive to immediate economic 
trends in making postsecondary education decisions. Non-consolidated 
title IV loans made at proprietary institutions declined 48 percent 
between AY2010-11 and AY2016-17, compared to a 6 percent decline at 
public institutions, and a 1 percent increase at private institutions. 
The average annual loan volume change from AY2010-11 to AY2016-17 was -
10 percent at proprietary institutions, -1 percent at public 
institutions, and 0.2 percent at private institutions. If we attribute 
all of the excess decline at proprietary institutions to the potential 
loss of eligibility under the GE regulations and increase estimated 
volume in the 2-year proprietary risk group that has the highest 
subsidy rate in the PB2019 baseline by the difference in the average 
annual change (12 percent for subsidized and unsubsidized loans and 9 
percent for PLUS), then the estimated net budget impact of the removal 
of the ineligibility sanction in the proposed regulations on the Direct 
Loan program is a cost of $848 million.
    Therefore, the total estimated net budget impact from the proposed 
regulations is $5.3 billion cost in increased transfers from the 
Federal government to Pell Grant recipients and student loan borrowers 
and subsequently to institutions, primarily from the elimination of the 
ineligibility provision of the GE regulations. However, this estimate 
assumes that a borrower who could no longer enroll in a GE program that 
loses title IV eligibility would not enroll in a different program that 
passes the D/E rates measure, but would instead opt out of a 
postsecondary education experience. The long-term impact to the student 
and the government of the decision to pursue no postsecondary education 
could be significant, but cannot be estimated for the purpose of this 
analysis.
    This is a maximum net budget impact and could be offset by student 
and institutional behavior in response to disclosures in the College 
Scorecard and other resources. Generally, the Department does not 
attribute a significant budget impact to disclosure requirements absent 
substantial evidence that such information will change borrower or 
institutional behavior. The Department welcomes comments on the net 
budget impact analysis. Information received will be considered in 
development of the Net Budget Impact analysis of the final rule.

D. Accounting Statement

    As required by OMB Circular A-4 we have prepared an accounting 
statement showing the classification of the expenditures associated 
with the provisions of the proposed regulations (see Table 5). This 
table provides our best estimate of the changes in annual monetized 
transfers as a result of the proposed regulations. The estimated 
reduced reporting and disclosure burden equals the -$209 million annual 
paperwork burden calculated in the Paperwork Reduction Act of 1995 
section (and also appearing on page 65004 of the regulatory impact 
analysis accompanying the 2014 final rule). The annualization of the 
paperwork burden differs from the 2014 final rule as the annualization 
of the paperwork burden for that rule assumed the same pattern as the 
2011 rule that featured multiple years of data being reported in the 
first year with a significant decline in burden in subsequent years.

 Table 5--Accounting Statement: Classification of Estimated Expenditures
                              [In millions]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                Category                             Benefits
------------------------------------------------------------------------
Discount Rate...........................        7%              3%
Reduced reporting and disclosure burden        $209            $209
 for institutions with GE programs under
 the GE regulations.....................
------------------------------------------------------------------------
                Category                               Costs
------------------------------------------------------------------------
Discount Rate...........................        7%              3%
Costs...................................  ..............  ..............
------------------------------------------------------------------------
                Category                             Transfers
------------------------------------------------------------------------
Discount Rate...........................        7%              3%
Increased transfers to Pell Grant              $518            $527
 recipients and student loan borrowers
 from elimination of ineligibility
 provision of GE regulations............
------------------------------------------------------------------------


[[Page 40181]]

Regulatory Flexibility Act (RFA) Certification

    The U.S. Small Business Administration (SBA) Size Standards define 
proprietary institutions as small businesses if they are independently 
owned and operated, are not dominant in their field of operation, and 
have total annual revenue below $7,000,000. Nonprofit institutions are 
defined as small entities if they are independently owned and operated 
and not dominant in their field of operation. Public institutions are 
defined as small organizations if they are operated by a government 
overseeing a population below 50,000.
    The Department lacks data to identify which public and private, 
nonprofit institutions qualify as small based on the SBA definition. 
Given the data limitations and to establish a common definition across 
all sectors of postsecondary institutions, the Department uses its 
proposed data-driven definitions for ``small institutions'' (Full-time 
enrollment of 500 or less for a two-year institution or less than two-
year institution and 1,000 or less for four-year institutions) in each 
sector (Docket ID ED-2018-OPE-0027) to certify the RFA impacts of these 
proposed regulations. Using this definition, there are 2,816 title IV 
institutions that qualify as small entities based on 2015-2016 12-month 
enrollment.
    When an agency issues a rulemaking proposal, the RFA requires the 
agency to ``prepare and make available for public comment an initial 
regulatory flexibility analysis'' which will ``describe the impact of 
the proposed rule on small entities.'' (5 U.S.C. 603(a)). Section 605 
of the RFA allows an agency to certify a rule, in lieu of preparing an 
analysis, if the proposed rulemaking is not expected to have a 
significant economic impact on a substantial number of small entities.
    The proposed regulations directly affect all institutions with GE 
programs participating in title IV aid. There were 2,617 institutions 
in the 2015 GE cohort, of which 1,357 are small entities. This 
represents approximately 20 percent of all title IV-participating 
institutions and 48 percent of all small institutions. Therefore, the 
Department has determined that the proposed regulations would not have 
a significant economic impact on a substantial number of small 
entities.
    Further, the Department has determined that the impact on small 
entities affected by the proposed regulations would not be significant. 
For these 1,357 institutions, the effect of the proposed regulations 
would be to eliminate GE paperwork burden and potential loss of title 
IV eligibility. We believe that the economic impacts of the proposed 
paperwork and title IV eligibility changes would be beneficial to small 
institutions. Accordingly, the Secretary hereby proposes to certify 
that these proposed regulations, if promulgated, would not have a 
significant economic impact on a substantial number of small entities. 
The Department invites comment from members of the public who believe 
there will be a significant impact on small institutions.

Paperwork Reduction Act of 1995

    As part of its continuing effort to reduce paperwork and respondent 
burden, the Department provides the general public and Federal agencies 
with an opportunity to comment on proposed or continuing, or the 
discontinuance of, collections of information in accordance with the 
Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)). This 
helps ensure that: The public understands the Department's collection 
instructions, respondents can provide the requested data in the desired 
format, reporting burden (time and financial resources) is minimized, 
collection instruments are clearly understood, and the Department can 
properly assess the impact of collection requirements on respondents. 
Respondents also have the opportunity to comment on our burden 
reduction estimates.
    A Federal agency may not conduct or sponsor a collection of 
information unless OMB approves the collection under the PRA and the 
corresponding information collection instrument displays a currently 
valid OMB control number. Notwithstanding any other provision of law, 
no person is required to comply with, or is subject to penalty for 
failure to comply with, a collection of information if the collection 
instrument does not display a currently valid OMB control number.
    The proposed regulations would rescind the GE regulations. That 
action would eliminate the burden as assessed to the GE regulations in 
the following previously approved information collections.

1845-0107--Gainful Employment Disclosure Template

    Individuals--13,953,411 respondents for a total of 1,116,272 burden 
hours eliminated.
    For Profit Institutions--2,526 respondents for a total of 1,798,489 
burden hours eliminated.
    Private Non Profit Institutions--318 respondents for a total of 
27,088 burden hours eliminated.
    Public Institutions--1,117 respondents for a total of 176,311 
burden hours eliminated.

1845-0121--Gainful Employment Program--Subpart R--Cohort Default Rates

    For Profit Institutions--1,434 respondents for a total of 5,201 
burden hours eliminated.
    Private Non Profit Institutions--47 respondents for a total of 172 
burden hours eliminated.
    Public Institutions--78 respondents for a total of 283 burden hours 
eliminated.

1845-0122--Gainful Employment Program--Subpart Q--Appeals for Debt to 
Earnings Rates

    For Profit Institutions--388 respondents for a total of 23,377 
burden hours eliminated.
    Private Non Profit Institutions--6 respondents for a total of 362 
burden hours eliminated.
    Public Institutions--2 respondents for a total of 121 burden hours 
eliminated.

1845-0123--Gainful Employment Program--Subpart Q--Regulations

    Individuals--11,793,035 respondents for a total of 1,050,857 burden 
hours eliminated.
    For Profit Institutions--28,018,705 respondents for a total of 
2,017,100 burden hours eliminated.
    Private Non Profit Institutions--442,348 respondents for a total of 
76,032 burden hours eliminated.
    Public Institutions--2,049,488 respondents for a total of 633,963 
burden hours eliminated.
    The total burden hours and proposed change in burden hours 
associated with each OMB Control number affected by the proposed 
regulations follows:

[[Page 40182]]



----------------------------------------------------------------------------------------------------------------
                                                                                                  Estimated cost
                                                                                                    $36.55/hour
                                                                                                        for
                       Regulatory section                           OMB control    Burden hours    institutions;
                                                                        No.                         $16.30/hour
                                                                                                        for
                                                                                                    individuals
----------------------------------------------------------------------------------------------------------------
Sec.   668.412..................................................       1845-0107      -3,118,160    -$91,364,240
Sec.  Sec.   668.504, 668.509, 668.510, 668.511, 668.512........       1845-0121          -5,656        -206,727
Sec.   668.406..................................................       1845-0122         -23,860        -872,083
Sec.  Sec.   668.405, 668.410, 668.411, 668.413, 668.414........       1845-0123      -3,777,952    -116,804,291
                                                                 -----------------------------------------------
    Total.......................................................  ..............      -6,925,628    -209,247,341
----------------------------------------------------------------------------------------------------------------

    We have prepared Information Collection Requests which will be 
filed upon the effective date of these proposed regulations to 
discontinue the currently approved information collections noted above.

    Note: The Office of Information and Regulatory Affairs in OMB 
and the Department review all comments posted at 
www.regulations.gov.

    We consider your comments on discontinuing these collections of 
information in--
     Evaluating the accuracy of our estimate of the burden 
reduction of the proposed discontinuance, including the validity of our 
methodology and assumptions;
     Enhancing the quality, usefulness, and clarity of the 
information we collect; and
     Minimizing the burden on those who must respond. This 
includes exploring the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques.
    OMB is required to make a decision concerning the collections of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, to ensure that OMB gives your comments full consideration, 
it is important that OMB receives your comments on these Information 
Collection Requests by September 13, 2018. This does not affect the 
deadline for your comments to us on the proposed regulations.
    If your comments relate to the Information Collection Requests for 
these proposed regulations, please indicate ``Information Collection 
Comments'' on the top of your comments.

Intergovernmental Review

    These programs are not subject to Executive Order 12372 and the 
regulations in 34 CFR part 79.

Assessment of Educational Impact

    In accordance with section 411 of GEPA, 20 U.S.C. 1221e-4, the 
Secretary particularly requests comments on whether the proposed 
regulations would require transmission of information that any other 
agency or authority of the United States gathers or makes available.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., Braille, large print, 
audiotape, or compact disc) on request to the person listed under FOR 
FURTHER INFORMATION CONTACT.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. You may 
access the official edition of the Federal Register and the Code of 
Federal Regulations via the Federal Digital System at: www.thefederalregister.org/fdsys. At this site you can view this document, as well as all other 
documents of this Department published in the Federal Register, in text 
or Portable Document Format (PDF). To use PDF you must have Adobe 
Acrobat Reader, which is available free at the site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at: 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department. (Catalog of Federal Domestic Assistance Number does 
not apply.)

List of Subjects

34 CFR Part 600

    Colleges and universities, Foreign relations, Grant programs-
education, Loan programs-education, Reporting and recordkeeping 
requirements, Selective Service System, Student aid, Vocational 
education.

34 CFR Part 668

    Administrative practice and procedure, Aliens, Colleges and 
universities, Consumer protection, Grant programs-education, Loan 
programs-education, Reporting and recordkeeping requirements, Selective 
Service System, Student aid, Vocational education.

    Dated: August 9, 2018.
Betsy DeVos,
Secretary of Education.

    For the reasons discussed in the preamble, and under the authority 
at 20 U.S.C. 3474 and 20 U.S.C. 1221e-3, the Secretary of Education 
proposes to amend parts 600 and 668 of title 34 of the Code of Federal 
Regulations as follows:

PART 600--INSTITUTIONAL ELIGIBILITY UNDER THE HIGHER EDUCATION ACT 
OF 1965, AS AMENDED

0
1. The authority citation for part 600 continues to read as follows:

    Authority: 20 U.S.C. 1001, 1002, 1003, 1088, 1091, 1094, 1099b, 
and 1099c, unless otherwise noted.

0
2. Section 600.10 is amended by revising paragraphs (c)(1) and (2) to 
read as follows:


Sec.  600.10  Date, extent, duration, and consequence of eligibility.

* * * * *
    (c) * * *
    (1) An eligible institution that seeks to establish the eligibility 
of an educational program must--
    (i) Pursuant to a requirement regarding additional programs 
included in the institution's program participation agreement under 34 
CFR 668.14, obtain the Secretary's approval;
    (ii) For a direct assessment program under 34 CFR 668.10, and for a 
comprehensive transition and postsecondary program under 34 CFR 
668.232, obtain the Secretary's approval; and
    (iii) For an undergraduate program that is at least 300 clock hours 
but less than 600 clock hours and does not admit as regular students 
only persons who have completed the equivalent of an associate degree 
under 34 CFR 668.8(d)(3), obtain the Secretary's approval.
    (2) Except as provided under Sec.  600.20(c), an eligible 
institution does not have to obtain the Secretary's approval to 
establish the eligibility of

[[Page 40183]]

any program that is not described in paragraph (c)(1) of this section.
* * * * *
0
3. Section 600.21 is amended by revising the paragraph (a)(11) 
introductory text to read as follows:


Sec.  600.21  Updating application information.

    (a) * * *
    (11) For any program that is required to provide training that 
prepares a student for gainful employment in a recognized occupation--
* * * * *

PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS

0
 4. The authority citation for part 668 continues to read as follows:

    Authority: 20 U.S.C. 1001-1003, 1070g, 1085, 1088, 1091, 1092, 
1094, 1099c, and 1099c-1, unless otherwise noted.


Sec.  668.6  [Removed and Reserved]

0
5. Remove and reserve Sec.  668.6.
0
6. Section 668.8 is amended by revising paragraphs (d)(2)(iii) and 
(d)(3)(iii) to read as follows:


Sec.  668.8  Eligible program.

* * * * *
    (d) * * *
    (2) * * *
    (iii) Provide training that prepares a student for gainful 
employment in a recognized occupation; and
    (3) * * *
    (iii) Provide undergraduate training that prepares a student for 
gainful employment in a recognized occupation;
* * * * *

Subpart Q--[Removed and Reserved]

0
7. Remove and reserve subpart Q, consisting of Sec. Sec.  668.401 
through 668.415.

Subpart R--[Removed and Reserved]

0
8. Remove and reserve subpart R, consisting of Sec. Sec.  668.500 
through 668.516.

[FR Doc. 2018-17531 Filed 8-10-18; 4:15 pm]
BILLING CODE 4000-01-P



                                                                         Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules                                              40167

                                                  (ii) No vessel shall remain in this                              Latitude             Longitude             anchorage areas established in this
                                                anchorage for more than 24 hours                                                                              section for more than 24 hours. No
                                                without permission from the Captain of                        39°13′21.20″ N         76°33′11.94″ W           vessel shall anchor within a tunnel,
                                                the Port.                                                      These coordinates are based on
                                                                                                                                                              cable or pipeline area shown on a
                                                  (4) Anchorage No. 3B, general                               NAD 83.                                         government chart. No vessel shall be
                                                anchorage. (i) All waters of the Patapsco                                                                     moored, anchored, or tied up to any
                                                                                                          (ii) No vessel shall remain in this                 pier, wharf, or other vessel in such
                                                River, bounded by a line connecting the                 anchorage for more than 72 hours
                                                following points:                                                                                             manner as to extend into established
                                                                                                        without permission from the Captain of                channel limits. No vessel shall be
                                                                                                        the Port.                                             positioned so as to obstruct or endanger
                                                          Latitude             Longitude                  (8) Anchorage No. 6, general
                                                                                                                                                              the passage of any other vessel.
                                                      39°14′32.48″   N     76°33′11.31″    W            anchorage. (i) All waters of the Patapsco                (3) Except in an emergency, a vessel
                                                      39°14′46.23″   N     76°33′25.83″    W            River, bounded by a line connecting the               that is likely to sink or otherwise
                                                      39°14′57.51″   N     76°33′08.14″    W            following points:                                     become an obstruction to navigation or
                                                      39°14′43.76″   N     76°32′53.63″    W                                                                  the anchoring of other vessels may not
                                                                                                                   Latitude             Longitude
                                                       These coordinates are based on                                                                         occupy an anchorage, unless the vessel
                                                      NAD 83.                                                 39°13′42.98″    N      76°32′19.11″   W         obtains permission from the Captain of
                                                                                                              39°13′20.65″    N      76°31′55.58″   W         the Port.
                                                  (ii) No vessel shall remain in this                         39°13′34.00″    N      76°31′33.50″   W            (4) Upon notification by the Captain
                                                anchorage for more than 24 hours                              39°14′01.95″    N      76°32′02.65″   W         of the Port to shift its position, a vessel
                                                without permission from the Captain of                        39°13′51.01″    N      76°32′18.71″   W         at anchor must get underway and shall
                                                the Port.                                                                                                     move to its new designated position
                                                                                                               These coordinates are based on
                                                  (5) Anchorage No. 3C, general                               NAD 83.                                         within two hours after notification.
                                                anchorage. (i) All waters of the Patapsco                                                                        (5) The Captain of the Port may
                                                River, bounded by a line connecting the                   (ii) No vessel shall remain in this                 prescribe specific conditions for vessels
                                                following points:                                       anchorage for more than 72 hours                      anchoring within the anchorages
                                                                                                        without permission from the Captain of                described in this section, including, but
                                                          Latitude             Longitude                the Port.                                             not limited to, the number and location
                                                                                                          (9) Anchorage No. 7, Dead ship                      of anchors, scope of chain, readiness of
                                                      39°14′46.23″   N     76°33′25.83″    W            anchorage. (i) All waters of Curtis Bay,              engineering plant and equipment, usage
                                                      39°14′50.06″   N     76°33′29.86″    W            bounded by a line connecting the                      of tugs, and requirements for
                                                      39°14′59.42″   N     76°33′15.17″    W            following points:
                                                      39°14′55.60″   N     76°33′11.14″    W                                                                  maintaining communication guards on
                                                                                                                   Latitude             Longitude
                                                                                                                                                              selected radio frequencies.
                                                       These coordinates are based on                                                                            (6) No vessel at anchor or at a mooring
                                                      NAD 83.                                                                                                 within an anchorage may transfer oil to
                                                                                                              39°13′00.40″    N      76°34′10.40″   W
                                                  (ii) No vessel shall remain in this                         39°13′13.40″    N      76°34′10.81″   W         or from another vessel unless the vessel
                                                anchorage for more than 72 hours                              39°13′13.96″    N      76°34′05.02″   W         has given the Captain of the Port the
                                                without permission from the Captain of                        39°13′14.83″    N      76°33′29.80″   W         four hours advance notice required by
                                                                                                              39°13′00.40″    N      76°33′29.90″   W         § 156.118 of this chapter.
                                                the Port.
                                                                                                               These coordinates are based on                    (7) No vessel shall anchor in a ‘‘dead
                                                  (6) Anchorage No. 4, general                                                                                ship’’ status (propulsion or control
                                                                                                              NAD 83.
                                                anchorage. (i) All waters of the Patapsco                                                                     unavailable for normal operations)
                                                River, bounded by a line connecting the                    (ii) The primary use of this anchorage             without prior approval of the Captain of
                                                following points:                                       is to lay up dead ships. Such use has                 the Port.
                                                                                                        priority over other uses. Permission
                                                          Latitude             Longitude                from the Captain of the Port must be                    Dated: August 1, 2018.
                                                                                                        obtained prior to the use of this                     Meredith L. Austin,
                                                      39°13′52.92″   N     76°32′29.60″    W            anchorage for more than 72 hours.                     Rear Admiral, U.S. Coast Guard, Commander,
                                                      39°14′04.38″   N     76°32′41.69″    W               (b) Definitions. As used in this                   Fifth Coast Guard District.
                                                      39°14′09.35″   N     76°32′39.89″    W
                                                      39°14′17.96″   N     76°32′26.44″    W
                                                                                                        section—                                              [FR Doc. 2018–17469 Filed 8–13–18; 8:45 am]
                                                      39°14′05.32″   N     76°32′13.09″    W               Certain dangerous cargo means                      BILLING CODE 9110–04–P
                                                      39°14′00.05″   N     76°32′17.77″    W            certain dangerous cargo as defined in
                                                                                                        § 160.202 of this chapter.
                                                       These coordinates are based on                      COTP means Captain of the Port
                                                      NAD 83.                                                                                                 DEPARTMENT OF EDUCATION
                                                                                                        Sector Maryland—National Capital
                                                  (ii) No vessel shall remain in this                   Region.                                               34 CFR Parts 600 and 668
                                                anchorage for more than 24 hours                           (c) General regulations. (1) Except as
                                                                                                                                                              [Docket ID ED–2018–OPE–0042]
                                                without permission from the Captain of                  otherwise provided, this section applies
                                                the Port.                                               to vessels over 20 meters long and all                RIN 1840–AD31
                                                                                                        vessels carrying or handling certain
                                                  (7) Anchorage No. 5, general                                                                                Program Integrity: Gainful Employment
                                                                                                        dangerous cargo while anchored in an
                                                anchorage. (i) All waters of the Patapsco
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                                                                                                        anchorage ground described in this                    AGENCY: Office of Postsecondary
                                                River, bounded by a line connecting the
                                                                                                        section.                                              Education, Department of Education.
                                                following points:
                                                                                                           (2) Except in cases where unforeseen
                                                                                                                                                              ACTION: Notice of proposed rulemaking.
                                                          Latitude             Longitude
                                                                                                        circumstances create conditions of
                                                                                                        imminent peril, or with the permission                SUMMARY:  The Secretary proposes to
                                                      39°14′07.89″ N       76°32′58.23″ W               of the Captain of the Port, no vessel                 rescind the gainful employment (GE)
                                                      39°13′34.82″ N       76°32′23.66″ W               shall be anchored in Baltimore Harbor                 regulations, which added to the Student
                                                      39°13′22.25″ N       76°32′28.90″ W               or the Patapsco River outside of the                  Assistance General Provisions


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                                                40168                  Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules

                                                requirements for programs that prepare                  (NPRM), the proposed regulations                      Secretary determines necessary or
                                                students for gainful employment in a                    would rescind the GE regulations and                  appropriate to administer and manage
                                                recognized occupation. The Department                   remove them from subpart Q of the                     the functions of the Secretary or the
                                                plans to update the College Scorecard,                  Student Assistance and General                        Department (20 U.S.C. 3474).
                                                or a similar web-based tool, to provide                 Provisions in 34 CFR part 668.                           Summary of the Major Provisions of
                                                program-level outcomes for all higher                      We base our proposal to rescind the                This Regulatory Action: As discussed
                                                education programs, at all institutions                 GE regulations on a number of findings,               under ‘‘Purpose of This Regulatory
                                                that participate in the programs                        including research results that                       Action,’’ the proposed regulations
                                                authorized by title IV of the Higher                    undermine the validity of using the                   would rescind the GE regulations.
                                                Education Act of 1965, which would                      regulations’ debt-to-earnings (D/E) rates             Please refer to the Summary of Proposed
                                                improve transparency and inform                         measure to determine continuing                       Changes section of this NPRM for more
                                                student enrollment decisions through a                  eligibility for participation in the                  details on the major provisions
                                                market-based accountability system.                     programs authorized by title IV of the                contained in this NPRM.
                                                DATES: We must receive your comments                    Higher Education Act of 1965, as                         Costs and Benefits: As further detailed
                                                on or before September 13, 2018.                        amended (title IV, HEA programs).                     in the Regulatory Impact Analysis, the
                                                                                                        These findings were not accurately                    benefits of the proposed regulations
                                                ADDRESSES: Submit your comments
                                                                                                        interpreted during the development of                 would include a reduction in burden for
                                                through the Federal eRulemaking Portal                                                                        some institutions, costs in the form of
                                                                                                        the 2014 GE regulations, were published
                                                or via postal mail, commercial delivery,                                                                      transfers as a result of more students
                                                                                                        subsequent to the promulgation of those
                                                or hand delivery. We will not accept                                                                          being able to enroll in a postsecondary
                                                                                                        regulations, or were presented by
                                                comments submitted by fax or by email                                                                         program, and more educational program
                                                                                                        committee members at negotiated
                                                or those submitted after the comment                                                                          choices for students where they can use
                                                                                                        rulemaking sessions. The Department
                                                period. To ensure that we do not receive                                                                      title IV aid.
                                                                                                        has also determined that the disclosure
                                                duplicate copies, please submit your                                                                             Invitation to Comment: We invite you
                                                                                                        requirements included in the GE
                                                comments only once. In addition, please                 regulations are more burdensome than                  to submit comments regarding these
                                                include the Docket ID at the top of your                originally anticipated and that a                     proposed regulations.
                                                comments.                                               troubling degree of inconsistency and                    To ensure that your comments have
                                                   • Federal eRulemaking Portal: Go to                                                                        maximum effect in developing the final
                                                                                                        potential error exists in job placement
                                                www.regulations.gov to submit your                                                                            regulations, we urge you to identify
                                                                                                        rates reported by GE programs that
                                                comments electronically. Information                                                                          clearly the specific section or sections of
                                                                                                        could mislead students in making an
                                                on using Regulations.gov, including                                                                           the proposed regulations that each of
                                                                                                        enrollment decision. Additionally, the
                                                instructions for accessing agency                                                                             your comments addresses, and provide
                                                                                                        Department has received consistent
                                                documents, submitting comments, and                                                                           relevant information and data whenever
                                                                                                        feedback from the community that the
                                                viewing the docket, is available on the                 GE regulations were more burdensome                   possible, even when there is no specific
                                                site under ‘‘Help.’’                                    than previously anticipated through the               solicitation of data and other supporting
                                                   • Postal Mail, Commercial Delivery,                                                                        materials in the request for comment.
                                                                                                        disclosure and reporting requirements
                                                or Hand Delivery: The Department                                                                              We also urge you to arrange your
                                                                                                        that were promulgated in 2014.
                                                strongly encourages commenters to                          Finally, the Department has                        comments in the same order as the
                                                submit their comments electronically.                   determined that in order to adequately                proposed regulations. Please do not
                                                However, if you mail or deliver your                    inform student enrollment choices and                 submit comments that are outside the
                                                comments about the proposed                             create a framework that enables                       scope of the specific proposals in this
                                                regulations, address them to Ashley                     students, parents, and the public to hold             NPRM, as we are not required to
                                                Higgins, U.S. Department of Education,                  institutions of higher education                      respond to such comments.
                                                400 Maryland Ave. SW, Mail Stop 294–                    accountable, program-level outcomes                      We invite you to assist us in
                                                20, Washington, DC 20202.                               data should be made available for all                 complying with the specific
                                                  Privacy Note: The Department’s policy is              title IV-participating programs. The                  requirements of Executive Orders 12866
                                                to make all comments received from                      Department plans to publish these data                and 13563 and their overall requirement
                                                members of the public available for public              using the College Scorecard, or its                   of reducing regulatory burden that
                                                viewing in their entirety on the Federal                successor site, so that students and                  might result from these proposed
                                                eRulemaking Portal at www.regulations.gov.              parents can compare the institutions                  regulations. Please let us know of any
                                                Therefore, commenters should be careful to
                                                include in their comments only information
                                                                                                        and programs available to them and                    further ways we could reduce potential
                                                that they wish to make publicly available.              make informed enrollment and                          costs or increase potential benefits
                                                                                                        borrowing choices. However, the                       while preserving the effective and
                                                FOR FURTHER INFORMATION CONTACT:                        College Scorecard is not the subject of               efficient administration of the
                                                Scott Filter, U.S. Department of                        this regulation. For a more detailed                  Department’s programs and activities.
                                                Education, 400 Maryland Ave. SW,                        discussion, see Significant Proposed                     During and after the comment period,
                                                Room 290–42, Washington, DC 20024.                      Regulations.                                          you may inspect all public comments
                                                Telephone: (202) 453–7249. Email:                          Section 410 of the General Education               about the proposed regulations by
                                                scott.filter@ed.gov.                                    Provisions Act (GEPA) authorizes the                  accessing Regulations.gov. You may also
                                                   If you use a telecommunications                      Secretary to make, promulgate, issue,                 inspect the comments in person at 400
                                                device for the deaf (TDD) or a text                     rescind, and amend rules and                          Maryland Ave. SW, Washington, DC,
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                                                telephone (TTY), call the Federal Relay                 regulations governing the manner of                   between 8:30 a.m. and 4 p.m., Eastern
                                                Service (FRS), toll free, at 1–800–877–                 operations of, and governing the                      Time, Monday through Friday of each
                                                8339.                                                   applicable programs administered by,                  week except Federal holidays. To
                                                SUPPLEMENTARY INFORMATION:                              the Department (20 U.S.C. 1221e–3).                   schedule a time to inspect comments,
                                                  Executive Summary:                                    Additionally, section 414 of the                      please contact the person listed under
                                                  Purpose of This Regulatory Action:                    Department of Education Organization                  FOR FURTHER INFORMATION CONTACT.
                                                  As discussed in more detail later in                  Act authorizes the Secretary to prescribe                Assistance to Individuals with
                                                this notice of proposed rulemaking                      such rules and regulations as the                     Disabilities in Reviewing the


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                                                                       Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules                                          40169

                                                Rulemaking Record: On request, we will                  consideration for action by the                       officers (CFOs) and business officers;
                                                provide an appropriate accommodation                    negotiated rulemaking committee. The                  consumer advocacy organizations;
                                                or auxiliary aid to an individual with a                hearings were held on—                                financial aid administrators; general
                                                disability who needs assistance to                         July 10, 2017, in Washington, DC; and              counsels/attorneys and compliance
                                                review the comments or other                               July 12, 2017, in Dallas, TX.                      officers; legal assistance organizations
                                                documents in the public rulemaking                         Transcripts from the public hearings               that represent students; minority-
                                                record for the proposed regulations. To                 are available at https://www2.ed.gov/                 serving institutions; private, proprietary
                                                schedule an appointment for this type of                policy/highered/reg/hearulemaking/                    institutions with an enrollment of 450
                                                accommodation or auxiliary aid, please                  2017/index.html.                                      students or less; private, proprietary
                                                contact the person listed under FOR                        We also invited parties unable to                  institutions with an enrollment of 451
                                                FURTHER INFORMATION CONTACT.                            attend a public hearing to submit                     students or more; private, non-profit
                                                                                                        written comments on the proposed                      institutions; State higher education
                                                Background                                              topics and to submit other topics for                 executive officers; State attorneys
                                                   The Secretary proposes to amend                      consideration. Written comments                       general and other appropriate State
                                                parts 600 and 668 of title 34 of the Code               submitted in response to the June 16,                 officials; students and former students;
                                                of Federal Regulations (CFR). The                       2017, Federal Register notice may be                  and groups representing U.S. military
                                                regulations in 34 CFR parts 600 and 668                 viewed through the Federal                            service members or veteran Federal
                                                pertain to institutional eligibility under              eRulemaking Portal at                                 student loan borrowers. The Department
                                                the Higher Education Act of 1965, as                    www.regulations.gov, within docket ID                 considered the nominations submitted
                                                amended (HEA), and participation in                     ED–2017–OPE–0076. Instructions for                    by the public and chose negotiators who
                                                title IV, HEA programs. We propose                      finding comments are also available on                would represent the various
                                                these amendments to remove the GE                       the site under ‘‘Help.’’                              constituencies.
                                                regulations, including the D/E rates                    Negotiated Rulemaking                                    The negotiating committee included
                                                calculations and the sanctions and                                                                            the following members:
                                                alternate earnings appeals related to                      Section 492 of the HEA, 20 U.S.C.
                                                                                                        1098a, requires the Secretary to obtain                  Laura Metune, California Community
                                                those calculations for GE programs, as                                                                        Colleges, and Matthew Moore
                                                well as the reporting, disclosure, and                  public involvement in the development
                                                                                                        of proposed regulations affecting                     (alternate), Sinclair Community College,
                                                certification requirements applicable to
                                                                                                        programs authorized by title IV of the                representing two-year public
                                                GE programs.
                                                   The Department seeks public                          HEA. After obtaining extensive input                  institutions.
                                                comment on whether the Department                       and recommendations from the public,                     Pamela Fowler, University of
                                                should amend 34 CFR 668.14 to require,                  including individuals and                             Michigan-Ann Arbor, and Chad Muntz
                                                as a condition of the Program                           representatives of groups involved in                 (alternate), The University System of
                                                Participation Agreement, that                           the title IV, HEA programs, the                       Maryland, representing four-year public
                                                institutions disclose, on the program                   Secretary in most cases must subject the              institutions.
                                                pages of their websites and in their                    proposed regulations to a negotiated                     Anthony Mirando, National
                                                college catalogues that, if applicable, the             rulemaking process. If negotiators reach              Accrediting Commission of Career Arts
                                                program meets the requirements for                      consensus on the proposed regulations,                and Sciences, and Mark McKenzie
                                                licensure in the State in which the                     the Department agrees to publish                      (alternate), Accreditation Commission
                                                institution is located and whether it                   without alteration a defined group of                 for Acupuncture and Oriental Medicine,
                                                meets the requirements in any other                     regulations on which the negotiators                  representing accrediting agencies.
                                                States for which the institution has                    reached consensus unless the Secretary                   Roberts Jones, Education & Workforce
                                                determined whether the program                          reopens the process or provides a                     Policy, and Jordan Matsudaira
                                                enables graduates to become licensed or                 written explanation to the participants               (alternate), Urban Institute and Cornell
                                                work in their field; net-price,                         stating why the Secretary has decided to              University, representing business and
                                                completion rates, withdrawal rates,                     depart from the agreement reached                     industry.
                                                program size, and/or any other items                    during negotiations. Further information                 Sandy Sarge, SARGE Advisors, and
                                                currently required under the GE                         on the negotiated rulemaking process                  David Silverman (alternate), The
                                                disclosure regulations. The Department                  can be found at: www2.ed.gov/policy/                  American Musical and Dramatic
                                                also asks whether it should require                     highered/reg/hearulemaking/hea08/neg-                 Academy, representing CFOs and
                                                institutions to provide links from each                 reg-faq.html.                                         business officers.
                                                of its program pages to College                            On August 30, 2017, the Department                    Whitney Barkley-Denney, Center for
                                                Scorecard, its successor site, or any                   published a notice in the Federal                     Responsible Lending, and Jennifer
                                                other tools managed by the Department.                  Register (82 FR 41197) announcing its                 Diamond (alternate), Maryland
                                                                                                        intention to establish two negotiated                 Consumer Rights Coalition, representing
                                                Public Participation                                    rulemaking committees and a                           consumer advocacy organizations.
                                                  On June 16, 2017, we published a                      subcommittee to prepare proposed                         Kelly Morrissey, Mount Wachusett
                                                notice in the Federal Register (82 FR                   regulations governing the Federal                     Community College, and Andrew
                                                27640) announcing our intent to                         Student Aid programs authorized under                 Hammontree (alternate), Francis Tuttle
                                                establish a negotiated rulemaking                       title IV of the HEA. The notice set forth             Technology Center, representing
                                                committee under section 492 of the HEA                  a schedule for the committee meetings                 financial aid administrators.
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                                                to develop proposed regulations to                      and requested nominations for                            Jennifer Blum, Laureate Education,
                                                revise the GE regulations published by                  individual negotiators to serve on the                Inc., and Stephen Chema (alternate),
                                                the Department on October 31, 2014 (79                  negotiating committee.                                Ritzert & Layton, PC, representing
                                                FR 64889). We also announced two                           The Department sought negotiators to               general counsels/attorneys and
                                                public hearings at which interested                     represent the following groups: Two-                  compliance officers.
                                                parties could comment on the topics                     year public institutions; four-year public               Johnson M. Tyler, Brooklyn Legal
                                                suggested by the Department and                         institutions; accrediting agencies;                   Services, and Kirsten Keefe (alternate),
                                                propose additional topics for                           business and industry; chief financial                Empire Justice Center, representing legal


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                                                40170                  Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules

                                                assistance organizations that represent                 Department reopened the negotiated                    institutions (based on mean SAT math
                                                students.                                               rulemaking process or provided a                      scores). The negotiators have been
                                                   Thelma L. Ross, Prince George’s                      written explanation to the committee                  informed of the earlier error and the
                                                Community College, and John K. Pierre                   members regarding why it decided to                   updated scatterplots are available on the
                                                (alternate), Southern University Law                    depart from that language.                            Department’s GE negotiated rulemaking
                                                Center, representing minority-serving                      During the first meeting, the                      website.
                                                institutions.                                           negotiating committee agreed to
                                                   Jessica Barry, School of Advertising                 negotiate an agenda of eight issues                   Summary of Proposed Changes
                                                Art, and Neal Heller (alternate),                       related to student financial aid. These                  The proposed regulations would
                                                Hollywood Institute of Beauty Careers,                  eight issues were: Scope and purpose,                 rescind the GE regulations in subpart Q
                                                representing private, proprietary                       gainful employment metrics (later                     of 34 CFR part 668, which establish the
                                                institutions with an enrollment of 450                  renamed debt-to-earnings metrics), debt               eligibility requirements for a program
                                                students or less.                                       calculations, sanctions, alternate                    that prepares students for gainful
                                                   Jeff Arthur, ECPI University, and Marc               earnings appeals, program disclosures,                employment in a recognized
                                                Jerome (alternate), Monroe College,                     reporting requirements, and certification             occupation, including the D/E rates
                                                representing private, proprietary                       requirements. Under the protocols, a                  measures, alternate earnings appeals,
                                                institutions with an enrollment of 451                  final consensus would have to include                 reporting and disclosure requirements,
                                                students or more.                                       consensus on all eight issues.                        and certifications.
                                                   C. Todd Jones, Association of                           During committee meetings, the
                                                                                                        committee reviewed and discussed the                  Significant Proposed Regulations
                                                Independent Colleges & Universities in
                                                Ohio, and Tim Powers (alternate),                       Department’s drafts of regulatory                        We group major issues according to
                                                National Association of Independent                     language and the committee members’                   subject. We discuss other substantive
                                                Colleges and Universities, representing                 alternative language and suggestions. At              issues under the sections of the
                                                private, non-profit institutions.                       the final meeting on March 15, 2018, the              proposed regulations to which they
                                                   Christina Whitfield, State Higher                    committee did not reach consensus on                  pertain. Generally, we do not address
                                                Education Executive Officers                            the Department’s proposed regulations.                proposed regulatory provisions that are
                                                Association, representing State higher                  For this reason, and according to the                 technical or otherwise minor in effect.
                                                education executive officers.                           committee’s protocols, all parties who                Origin and Purpose of the Gainful
                                                   Christopher Madaio, Office of the                    participated or were represented in the
                                                                                                                                                              Employment Regulations
                                                Attorney General of Maryland, and Ryan                  negotiated rulemaking and the
                                                Fisher (alternate), Office of the Attorney              organizations that they represent, in                    The definition of ‘‘gainful
                                                General of Texas, representing State                    addition to all members of the public,                employment’’ established in the 2014
                                                attorneys general and other appropriate                 may comment freely on the proposed                    regulations created a new metric that
                                                State officials.                                        regulations. For more information on                  established bright-line standards for a
                                                   Christopher Gannon, United States                    the negotiated rulemaking sessions,                   GE program’s continuing participation
                                                Student Association, and Ahmad                          please visit: https://www2.ed.gov/                    in title IV, HEA programs.
                                                Shawwal (alternate), University of                      policy/highered/reg/hearulemaking/                       The GE regulations establish a
                                                Virginia, representing students and                     2017/gainfulemployment.html.                          methodology for calculating mean D/E
                                                former students.                                                                                              rates for programs that prepare students
                                                   Daniel Elkins, Enlisted Association of               Data Correction                                       for gainful employment in a recognized
                                                the National Guard of the United States,                   During the third meeting of the                    occupation. The GE regulations also
                                                and John Kamin (alternate), The                         negotiated rulemaking committee, the                  establish a range of acceptable D/E rates
                                                American Legion’s National Veterans                     Department provided negotiators with a                programs must maintain in order to
                                                Employment & Education Division,                        number of scatterplots in response to a               retain eligibility to participate in the
                                                representing groups representing U.S.                   request from several negotiators to                   title IV, HEA programs. GE programs
                                                military service members or veteran                     compare student loan repayment rates                  include non-degree programs at public
                                                Federal student loan borrowers.                         between Pell Grant recipients and                     and non-profit institutions and all
                                                   Gregory Martin, U.S. Department of                   students who did not receive a Pell                   programs (including undergraduate,
                                                Education, representing the Department.                 Grant at individual institutions. The                 graduate, and professional degree
                                                   The negotiated rulemaking committee                  Department incorrectly concluded that                 programs) at proprietary institutions.
                                                met to develop proposed regulations on                  the repayment rate between Pell Grant                    Under the regulations, GE programs
                                                December 4–7, 2017, February 5–8,                       recipients and Pell Grant non-recipients              must have a graduate debt-to-
                                                2018, and March 12–15, 2018.                            at all institutions was 1:1. While the                discretionary earnings ratio of less than
                                                   At its first meeting, the negotiating                repayment rates of Pell Grant recipients              or equal to 20 percent or debt-to-annual
                                                committee reached agreement on its                      and non-recipients are correlated, there              earnings ratio of less than or equal to 8
                                                protocols and proposed agenda. The                      is not a 1:1 relationship between them.               percent to receive an overall passing
                                                protocols provided, among other things,                 The Department’s analysis shows the                   rate. Programs with both a discretionary
                                                that the committee would operate by                     difference between the repayment rates                earnings rate greater than 30 percent (or
                                                consensus. Consensus means that there                   of Pell Grant recipients and non-                     a negative or zero denominator) and an
                                                must be no dissent by any member in                     recipients is about 20 percentage points              annual earnings rate greater than 12
                                                order for the committee to have reached                 on average. At institutions with low                  percent (or a zero denominator) receive
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                                                agreement. Under the protocols, if the                  repayment rates among all students, the               an overall failing rate. Programs that fail
                                                committee reached a final consensus on                  gap between Pell Grant recipients and                 the D/E rates measure for two out of
                                                all issues, the Department would use the                non-recipients is relatively higher. The              three consecutive years lose title IV
                                                consensus-based language in its                         gap shrinks among institutions with                   eligibility. Non-passing programs that
                                                proposed regulations. Furthermore, the                  very high overall repayment rates;                    have debt-to-discretionary income ratios
                                                Department would not alter the                          however, many of these institutions                   greater than 20 percent and less than or
                                                consensus-based language of its                         serve small proportions of Pell Grant                 equal to 30 percent or debt-to-annual
                                                proposed regulations unless the                         recipients and are highly selective                   income ratios greater than 8 percent and


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                                                                       Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules                                                40171

                                                less than or equal to 12 percent are                    loan debt is more significant than the                that serve larger proportions of women
                                                considered to be in the ‘‘zone.’’                       Department previously acknowledged                    and minority students and further
                                                Programs with a combination of zone or                  and raises questions about the                        reduce the educational options available
                                                failing overall rates for four consecutive              reasonableness of the 8 percent                       to those students.
                                                years lose title IV eligibility.                        threshold as a critical, high-stakes test of             It is also important to highlight the
                                                   The first D/E rates were published in                purported program performance.                        importance of place in determining
                                                2017, and the Department’s analysis of                     Research published subsequent to the               which academic programs are available
                                                those rates raises concern about the                    promulgation of the GE regulations adds               to students. A student may elect to
                                                validity of the metric and how it affects               to the Department’s concern about the                 enroll in a program that costs more
                                                the opportunities for Americans to                      validity of using D/E rates as to                     simply because a lower-cost program is
                                                prepare for high-demand occupations in                  determine whether or not a program                    too far from home or work or does not
                                                the healthcare, hospitality, and personal               should be allowed to continue to                      offer a schedule that aligns with the
                                                services industries, among others. At a                 participate in title IV programs. As                  student’s work or household
                                                time when 6 million jobs remain                         noted in the 2014 proposed rule, the                  responsibilities. The average first-time
                                                unfilled due to the lack of qualified                   Department believed that an                           undergraduate student attending a two-
                                                workers,1 the Department is re-                         improvement of quality would be                       year public institution enrolls at an
                                                evaluating the wisdom of a regulatory                   reflected in the program’s D/E rates (79              institution within eight miles of his or
                                                regime that creates additional burden                   FR 16444). However, the highest quality               her home. The distance increases to 18
                                                for, and restricts, programs designed to                programs could fail the D/E rates                     miles for the average first-time
                                                increase opportunities for workforce                    measure simply because it costs more to               undergraduate student enrolling at a
                                                readiness. We further believe the GE                    deliver the highest quality program and               four-year public institution.6
                                                regulations reinforce an inaccurate and                 as a result the debt level is higher.                 Accordingly, we believe that while it is
                                                outdated belief that career and                            Importantly, the HEA does not limit                important for a student to know that a
                                                vocational programs are less valuable to                title IV aid to those students who attend             program could result in higher debt, it
                                                students and less valued by society, and                the lowest cost institution or program.               is not appropriate to eliminate the
                                                that these programs should be held to a                 On the contrary, because the primary                  option simply because a lower-cost
                                                higher degree of accountability than                    purpose of the title IV, HEA programs is              program exists, albeit outside of the
                                                traditional two- and four-year degree                   to ensure that low-income students have               student’s reasonable travel distance. In
                                                programs that may have less market                      the same opportunities and choices in                 the same way that title IV programs
                                                value.                                                  pursuing higher education as their                    enable traditional students to select the
                                                                                                        higher-income peers, title IV aid is                  more expensive option simply because
                                                Research Findings That Challenge the                    awarded based on the institution’s                    of the amenities an institution offers, or
                                                Accuracy and Validity of the D/E Rates                  actual cost of attendance, rather than a              its location in the country, they should
                                                Measure                                                 fixed tuition rate that limits low-income             similarly enable adult learners to select
                                                   In promulgating the 2011 and 2014                    students to the lowest cost institutions.4            the more expensive program due to its
                                                regulations, the Department cited as                       Other research findings suggest that               convenience, its more personalized
                                                justification for the 8 percent D/E rates               D/E rates-based eligibility creates                   environment, or its better learning
                                                threshold a research paper published in                 unnecessary barriers for institutions or              facilities. We support providing more
                                                2006 by Baum and Schwartz that                          programs that serve larger proportions                information to students and parents that
                                                described the 8 percent threshold as a                  of women and minority students. Such                  enables them to compare the outcomes
                                                commonly utilized mortgage eligibility                  research indicates that even with a                   achieved by graduates of the programs
                                                standard.2 However, the Baum &                          college education, women and                          available to them. However, due to a
                                                Schwartz paper makes clear that the 8                   minorities, on average, earn less than                number of concerns with the calculation
                                                percent mortgage eligibility standard                   white men who also have a college                     and relevance of the debt level included
                                                ‘‘has no particular merit or justification’’            degree, and in many cases, less than                  in the rates we do not believe that the
                                                when proposed as a benchmark for                        white men who do not have a college                   D/E rates measure achieves a level of
                                                manageable student loan debt.3 The                      degree.5                                              accuracy that it should alone determine
                                                Department previously dismissed this                       Disagreement exists as to whether this             whether or not a program can
                                                statement by pointing to Baum and                       is due to differences in career choices               participate in title IV programs.
                                                                                                        across subgroups, time out of the                        While the Department denied the
                                                Schwartz’s acknowledging the
                                                                                                        workforce for childcare responsibilities,             impact of these other factors in the 2014
                                                ‘‘widespread acceptance’’ of the 8
                                                                                                        barriers to high-paying fields that                   GE regulations, it now recognizes a
                                                percent standard and concluding that it                                                                       number of errors included in its prior
                                                is ‘‘not unreasonable.’’ 79 FR 64889,                   disproportionately impact certain
                                                                                                        groups, or the interest of females or                 analysis. For example, in the 2014 final
                                                64919. Upon further review, we believe                                                                        rule (79 FR 64889, 65041–57), the
                                                that the recognition by Baum and                        minority students in pursuing careers
                                                                                                        that pay less but enable them to give                 Department stated that changes in
                                                Schwartz that the 8 percent mortgage                                                                          economic outlook would not cause a
                                                eligibility standard ‘‘has no particular                back to their communities. Regardless of
                                                                                                                                                              program to fail the D/E rates measure or
                                                merit or justification’’ when proposed as               the cause of pay disparities, the GE
                                                                                                                                                              remain in the zone for four years. This
                                                a benchmark for manageable student                      regulations could significantly
                                                                                                                                                              conclusion was based on the finding
                                                                                                        disadvantage institutions or programs
                                                                                                                                                              that the average recession lasted for 11.1
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                                                   1 U.S. Department of Labor—Bureau of Labor

                                                Statistics. (July 10, 2018). Economic News Release:       4 Gladieux, L. Federal Student Aid Policy: A
                                                                                                                                                              months, which would not be long
                                                Job Openings and Labor Turnover Summary.                History and an Assessment. Financing                  enough to impact a program’s outcomes
                                                Available at www.bls.gov/news.release/                  Postsecondary Education: The Federal Role.
                                                jolts.nr0.htm.                                          October 1995. Available at https://www2.ed.gov/         6 Hillman, N. & Weichman, T. Education Deserts:
                                                   2 Baum, S. & Schwartz, S. How Much Debt is Too       offices/OPE/PPI/FinPostSecEd/gladieux.html.           The Continued Significance of ‘‘Place’’ in the
                                                Much? Defining Benchmarks for Manageable                  5 Ma, J., Pender, M. & Welch, M. Education Pays     Twenty-First Century, American Council on
                                                Student Debt. College Board, 2008. Available at         2016: The Benefits of Higher Education for            Education, 2016. Available at www.acenet.edunews-
                                                https://files.eric.ed.gov/fulltext/ED562688.pdf.        Individuals and Society, CollegeBoard, 2016. Fig.     room/Pages/CPRS-Viewpoints-Education-
                                                   3 Ibid.                                              2.4.                                                  Deserts.aspx.



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                                                40172                            Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules

                                                for the number of years required to go                                     not address the high cost of college—                 outcomes from those that serve large
                                                from ‘‘zone’’ to failing. However, the                                     and, in fact, could make it even easier               proportions of traditionally aged
                                                Great Recession lasted for well over two                                   for students to borrow more than they                 learners, and yet the D/E rates measure
                                                years, and was followed by an extended                                     need and institutions to charge high                  fails to take any of these important
                                                ‘‘jobless’’ recovery, which would have                                     prices—the Department’s plans to                      factors into account.
                                                significantly impacted debt and                                            increase transparency will help address                  Most importantly, the first set of D/E
                                                earnings outcomes for a period of time                                     these issues. Furthermore, the increased              rates, published in 2016, revealed that
                                                that would have exceeded the zone                                          availability of these repayment plans                 D/E rates, and particularly earnings,
                                                period, had the GE regulations been in                                     with longer repayment timelines is                    vary significantly from one occupation
                                                place during that period.7 The Great                                       inconsistent with the repayment                       to the next, and across geographic
                                                Recession had an unusually profound                                        assumptions reflected in the shorter                  regions within a single occupation. The
                                                impact on recent college graduates, who                                    amortization periods used for the D/E                 Department had not predicted such
                                                were underemployed at an historic rate,                                    rates calculation in the GE regulations.              substantial differences in earnings due
                                                meaning that graduates were working in                                       In addition, a program’s D/E rates can              to geography, which may have been
                                                jobs that prior to the Great Recession                                     be negatively affected by the fact that it            exacerbated by the Great Recession and
                                                did not require a college credential.8                                     enrolls a large number of adult students              the speed with which individual States
                                                The Department concedes that an                                            who have higher Federal borrowing                     reduced their unemployment rate.
                                                extended recession coupled with                                            limits, thus higher debt levels, and may                 While the Department intended for D/
                                                rampant underemployment, could have                                        be more likely than a traditionally aged              E rates to serve as a mechanism for
                                                a significant impact on a program’s D/                                     student to seek part-time work after                  distinguishing between high- and low-
                                                E rates for a period of time that would                                    graduation in order to balance family                 performing programs, data discussed
                                                span most or all of the zone period.                                       and work responsibilities. The                        during the third session of the most
                                                Underemployment during the Great                                           Department recognizes that it is                      recent negotiated rulemaking
                                                Recession was not limited to the                                           inappropriate to penalize institutions                demonstrated that even a small change
                                                graduates of GE programs, but included                                     simply because the students they serve                in student loan interest rates could shift
                                                graduates of all types of institutions,                                    take advantage of the higher borrowing                many programs from a ‘‘passing’’ status
                                                including elite private institutions.9                                     capacity Congress has made available to               to ‘‘failing,’’ or vice versa, even if
                                                   The GE regulations were intended to                                     those borrowers. It is also inappropriate             nothing changed about the programs’
                                                address the problem of programs that                                       to penalize institutions because students             content or student outcomes. The
                                                are supposed to provide training that                                      seek part-time work rather than full-                 Department believes that examples such
                                                prepares students for gainful                                              time work, or are building their own                  as that illustrated here should be
                                                employment in a recognized                                                 businesses, which may result in lower                 corrected and our justifications in the
                                                occupation, but were leaving students                                      earnings early on. Regardless of whether              2014 GE regulation did not adequately
                                                with unaffordable levels of loan debt                                      students elect to work part-time or full-             take these nuances into account
                                                compared to the average program                                            time, the cost to the institution of                  sufficiently. Table 1 shows how changes
                                                earnings (79 FR 16426). However, the                                       administering the program is the same,                in interest rate would affect outcomes
                                                Department believes there are other                                        and it is the cost of administering the               under the D/E rates measure. For
                                                tools now available to enable students                                     program that determines the cost of                   example, if the interest rate is seven
                                                with lower incomes to manage high                                          tuition and fees. In general, programs                percent, 831 programs would fail
                                                levels of debt. While the existence of                                     that serve large proportions of adult                 compared to only 716 programs if the
                                                income-driven repayment plans does                                         learners may have very different                      interest rate is six percent.

                                                      TABLE 1—NUMBER AND PERCENTAGE OF GE 2015 PROGRAMS THAT WOULD PASS, FAIL, OR FALL INTO THE ZONE
                                                                                    USING DIFFERENT INTEREST RATES 10
                                                                                                                                     Number of programs                                     Percentage of programs
                                                                       Interest rate
                                                                            (%)                                           Pass                Zone                  Fail           Pass                Zone                  Fail

                                                3   ...............................................................              7,199               998                   440              83                  12                    5
                                                4   ...............................................................              7,030             1,085                   522              81                  13                    6
                                                5   ...............................................................              6,887             1,135                   615              80                  13                    7
                                                6   ...............................................................              6,720             1,201                   716              78                  14                    8
                                                7   ...............................................................              6,551             1,255                   831              76                  15                   10
                                                8   ...............................................................              6,326             1,353                   958              73                  16                   11
                                                    Source: Department analysis of GE 2015 rates.


                                                  The Department agrees with a                                             is strong and interest rates rise is faulty.          shorter-term career and technical
                                                statement made by a negotiator that any                                    The Department believes that it is                    programs are not unduly burdened or
                                                metric that could render a program                                         during these times of economic growth,                eliminated.
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                                                ineligible to participate in title IV, HEA                                 when demand for skilled workers is                       In addition, the Department now
                                                programs simply because the economy                                        greatest, that it is most critical that               recognizes that assigning a 10-year
                                                                                                                                                                                 amortization period to graduates of
                                                  7 www.federalreservehistory.org/essays/great_                            Research, September 2016. Available at                designated with an official pass, zone, or fail status
                                                recession_of_200709.                                                       www.nber.org/papers/w22654.                           due to reaccreditation and reinstatements of
                                                  8 Abel, Jaison & Deitz, Richard.                                           9 https://money.cnn.com/2011/05/17/news/            eligibility during the validation process of
                                                Underemployment in the Early Career of College                             economy/recession_lost_generation/index.htm.          establishing D/E rates.
                                                Graduates Following the Great Recession, Working                             10 The count of programs includes programs that

                                                Paper No. 22654, National Bureau of Economic                               had preliminary rates calculated, but were not


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                                                                       Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules                                          40173

                                                certificate and associate degree                        in which the graduate is working.                     time to meet the requirement in
                                                programs for the purpose of calculating                 Meanwhile, institutions accredited by                 § 668.412(e) to directly distribute the
                                                D/E rates creates an unacceptable and                   the Accrediting Commission of Career                  disclosure template to prospective
                                                unnecessary double standard since the                   Schools and Colleges must consider the                students, as well as the requirement in
                                                REPAYE plan regulations promulgated                     alignment between the job and the                     § 668.412(d) to include the disclosure
                                                in 2015 provide a 20-year amortization                  majority of the educational and training              template or a link thereto in program
                                                period for these same graduates. The                    objectives of the program, which can be               promotional materials, pending
                                                REPAYE plan acknowledges that                           a difficult standard to meet since                    negotiated rulemaking (82 FR 30975; 83
                                                undergraduate completers may well                       educational programs are designed to                  FR 28177). A negotiator representing
                                                need to extend payments over a longer                   prepare students broadly for the various              financial aid officials confirmed our
                                                amortization period, and makes it clear                 jobs that may be available to them, but               concerns, stating that large campuses,
                                                that extended repayment periods are an                  jobs are frequently more narrowly                     such as community colleges that serve
                                                acceptable and reasonable way to help                   defined to meet the needs of a specific               tens of thousands of students and are in
                                                students manage their repayment                         employer.11                                           contact with many more prospective
                                                obligations. Therefore, it is not                          The original 2011 GE regulations                   students, would not be able to, for
                                                appropriate to use an amortization                      required NCES to ‘‘develop a placement                example, distribute paper or electronic
                                                period of less than 20 years for any                    rate methodology and the processes                    disclosures to all the prospective
                                                undergraduate program D/E rates                         necessary for determining and                         students in contact with the institution.
                                                calculations or of less than 25 years for               documenting student employment.’’ 12                  Although in decades past, institutions
                                                any graduate program D/E rates                          This requirement arose out of negotiator              may have included these materials in
                                                calculations.                                           concerns about the complexity and                     the packets mailed to a prospective
                                                                                                        subjectivity of the many job placement                student’s home; many institutions no
                                                Concerns About Disclosures Required
                                                                                                        definitions used by States, institutional             longer mail paper documents, and
                                                Under the GE Regulations
                                                                                                        accreditors, programmatic accreditors                 instead rely on web-based materials and
                                                   As the Department is proposing to                    and institutions themselves to evaluate               electronic enrollment agreements. The
                                                rescind the GE regulations in total, the                outcomes. The Department convened a                   Department notes that § 668.412(e)
                                                disclosures required under the current                  Technical Review Panel (TRP), but in                  requires that disclosures be made only
                                                regulations also would be rescinded.                    2013 the TRP reported that not only                   to a prospective student before that
                                                Generally, we are concerned that it is                  were job placement determinations                     individual signs an enrollment
                                                not appropriate to require these types of               ‘‘highly subjective’’ in nature, but that             agreement, completes registration, or
                                                disclosures for only one type of program                the TRP could not come to consensus on                makes a financial commitment to the
                                                when such information would be                          a single, acceptable definition of a job              institution and that the institution may
                                                valuable for all programs and                           placement that could be used to report                provide the disclosure to the student by
                                                institutions that receive title IV, HEA                 this outcome on GE disclosures, nor                   hand-delivering the disclosure template
                                                funds. However, we cannot expand the                    could it identify a reliable data source              to the prospective student or sending
                                                GE regulations to include programs that                 to enable institutions to accurately                  the disclosure template to the primary
                                                are not GE programs. In that regard, as                 determine and report job placement                    email address used by the institution for
                                                indicated above, we are interested in                   outcomes.13 In light of the failure of the            communicating with the prospective
                                                comments on whether the Department                      TRP to develop a consistent definition
                                                should require that all institutions                                                                          student. However, ED recognizes that
                                                                                                        of a job placement, and well-known                    even this requirement has an associated
                                                disclose information, such as net price,                instances of intentional or accidental job
                                                program size, completion rates, and                                                                           burden, especially since institutions are
                                                                                                        placement rate misrepresentations, the                required to retain documentation that
                                                accreditation and licensing                             Department believes it would be
                                                requirements, on their program web                                                                            each student acknowledges that they
                                                                                                        irresponsible to continue requiring                   have received the disclosure. The
                                                pages, or if doing so is overly                         institutions to report job placement
                                                burdensome for institutions.                                                                                  Department believes that the best way to
                                                                                                        rates. Instead, the Department believes               provide disclosures to students is
                                                   The Department has also discovered a                 that program-level earnings data that
                                                variety of challenges and errors                                                                              through a data tool that is populated
                                                                                                        will be provided by the Secretary                     with data that comes directly from the
                                                associated with the disclosures required                through the College Scorecard or its
                                                under the GE regulations. For example,                                                                        Department, and that allows prospective
                                                                                                        successor is the more accurate and                    students to compare all institutions
                                                there is significant variation in                       reliable way to report job outcomes in
                                                methodologies used by institutions to                                                                         through a single portal, ensuring that
                                                                                                        a format that students can use to                     important consumer information is
                                                determine and report in-field job                       compare the various institutions and
                                                placement rates, which could mislead                                                                          available to students while minimizing
                                                                                                        programs they are considering.                        institutional burden.
                                                students into choosing a lower                             The Department also believes that it
                                                performing program that simply appears                                                                           Finally, more than a few disclosures
                                                                                                        underestimated the burden associated
                                                to be higher performing because a less                                                                        exclude outcomes because the program
                                                                                                        with distributing the disclosures
                                                rigorous methodology was employed to                                                                          had fewer than 10 graduates in the
                                                                                                        directly to prospective students. In
                                                calculate in-field job placement rates.                                                                       award year covered by the disclosure
                                                                                                        2018, the Department announced that it
                                                   In some cases, a program is not                                                                            template. Because the Department does
                                                                                                        was allowing institutions additional
                                                required to report job placement                                                                              not collect data from the disclosures
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                                                outcomes because it is not required by                    11 ACCSC Standards of Accreditation, Appendix       through a central portal or tool, it has
                                                its accreditor or State to do so. In other              VII—Guidelines for Employment Classification,         been unable to compare the number of
                                                cases, GE programs at public                            2015, Available at www.accsc.org/                     completers reported on the GE
                                                institutions in some States (such as                    UploadedDocuments/July%202015/Guidelines%             disclosures posted by programs with the
                                                                                                        20for%20Employment.pdf.
                                                community colleges in Colorado) define                    12 https://nces.ed.gov/npec/data/Calculating_
                                                                                                                                                              number reported through other survey
                                                an in-field job placement for the                       Placement_Rates_Background_Paper.pdf.                 tools. Therefore, it is difficult to know
                                                purpose of the GE disclosure as any job                   13 https://www2.ed.gov/policy/highered/reg/         if these reports of less than 10 graduates
                                                that pays a wage, regardless of the field               hearulemaking/2012/ipeds-summary91013.pdf.            are accurate.


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                                                40174                  Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules

                                                Covered Institutions and Programs                       debt data for all programs, thereby                     institutions also, in general, charge
                                                   Under its general authority to publish               providing a more accurate mechanism                     higher tuition and have students who
                                                data related to title IV program                        for providing useful information to                     take on additional debt, including
                                                outcomes, and in light of changes to the                consumers.                                              enrolling in majors that yield societal
                                                National Student Loan Data System                          Further, the Department has reviewed                 benefits, but not wages commensurate
                                                related to the 150% subsidized loan                     additional research findings, including                 with the cost of the institution.
                                                rules requiring institutions to report                  those published by the Department in                       Challenges have been brought alleging
                                                program CIP codes, the Department                       follow-up to the Beginning                              cosmetology and hospitality programs
                                                believes that it is important and                       Postsecondary Survey of 1994, and                       have felt a significant impact due to the
                                                necessary to publish program-level                      determined that student demographics                    GE regulations. In the case of
                                                                                                        and socioeconomic status play a                         cosmetology programs, State licensure
                                                student outcomes to inform consumer
                                                                                                        significant role in determining student                 requirements and the high costs of
                                                choice and enable researchers and
                                                                                                        outcomes.14 The GE regulations failed to                delivering programs that require
                                                policy makers to analyze program
                                                                                                        take into account the abundance of                      specialized facilities and expensive
                                                outcomes. The Department does not
                                                                                                        research that links student outcomes                    consumable supplies may make these
                                                believe that GE data can adequately
                                                                                                        with a variety of socioeconomic and                     programs expensive to operate, which
                                                meet this goal or inform consumer
                                                                                                        demographic risk factors, and similarly                 may be why many public institutions do
                                                choice since only a small proportion of
                                                                                                        failed to acknowledge that institutions                 not offer them. In addition, graduates of
                                                postsecondary programs are required to
                                                                                                        serving an older student population will                cosmetology programs generally must
                                                report program-level outcomes data and,
                                                                                                        likely have higher median debt since                    build up their businesses over time,
                                                even among GE programs, many
                                                                                                        Congress has provided higher borrowing                  even if they rent a chair or are hired to
                                                programs graduate fewer than 10                                                                                 work in a busy salon.
                                                students per year and are not required                  limits for older students who are less
                                                                                                        likely than traditional students to                        Finally, since a great deal of
                                                to provide student outcome information                                                                          cosmetology income comes from tips,
                                                on the GE disclosure. In addition, the                  receive financial support from parents.
                                                                                                           Students select institutions and                     which many individuals fail to
                                                Department does not believe it is                                                                               accurately report to the Internal
                                                                                                        college majors for a wide variety of
                                                appropriate to attach punitive actions to                                                                       Revenue Service, mean and median
                                                                                                        reasons, with cost and future earnings
                                                program-level outcomes published by                                                                             earnings figures produced by the
                                                                                                        serving as only two data points within
                                                some programs but not others. In                                                                                Internal Revenue Service under-
                                                                                                        a more complex decision-making
                                                addition, the Department believes that it                                                                       represent the true earnings of many
                                                                                                        process. For the reasons cited
                                                is more useful to students and parents                                                                          workers in this field in a way that
                                                                                                        throughout this document, the
                                                to publish actual median earnings and                                                                           institutions cannot control.20 Litigation
                                                                                                        Department has reconsidered its
                                                debt data rather than to utilize a                                                                              filed by the American Association of
                                                                                                        position.
                                                complicated equation to calculate D/E                      Well-publicized incidents of non-                    Cosmetology Schools (AACS) asserting
                                                rates that students and parents may not                 profit institutions misrepresenting their               similar claims highlighted the
                                                understand and that cannot be directly                  selectivity levels, inflating the job                   importance of the alternate earnings
                                                compared with the debt and earnings                     placement rates of their law school                     appeal to allow institutions to account
                                                outcomes published by non-GE                            graduates, and even awarding credit for                 for those earnings.
                                                programs. For all the reasons set forth in              classes that never existed demonstrate                     While the GE regulations include an
                                                this NPRM, the Department believes it                   that bad acts occur among institutions                  alternate earnings appeals process for
                                                would be unwise policy to continue                      regardless of their tax status.15 16 17 18              programs to collect data directly from
                                                using the D/E rates for reporting or                       The GE regulations underestimated                    graduates, the process for developing
                                                eligibility purposes.                                   the cost of delivering a program and                    such an appeal has proven to be more
                                                   In addition, the GE regulations                      practices within occupations that may                   difficult to navigate than the
                                                targeted proprietary institutions, aiming               skew reported earnings. According to                    Department originally planned. The
                                                to eliminate poor performers and ‘‘bad                  Delisle and Cooper, because public                      Department has reviewed earnings
                                                actors’’ in the sector. While bad actors                institutions receive State and local                    appeal submissions for completeness
                                                do exist in the proprietary sector, the                 taxpayer subsidies, ‘‘even if a for-profit              and considered response rates on a case-
                                                Department believes that there are good                 institution and a public institution have               by-case basis since the response rate
                                                and bad actors in all sectors and that the              similar overall expenditures (costs) and                threshold requirements were set aside in
                                                Department, States, and accreditors                     graduate earnings (returns on                           the AACS litigation. Through this
                                                have distinct roles and responsibilities                investment), the for-profit institution                 process, the Department has
                                                in holding all bad actors accountable.                  will be more likely to fail the GE rule,                corroborated claims from institutions
                                                Prior to 2015, when the Department                      since more of its costs are reflected in                that the survey response requirements of
                                                started collecting program-level data for               student debt.’’ 19 Non-profit, private                  the earnings appeals methodology are
                                                all completers, the GE regulations                                                                              burdensome given that program
                                                provided a unique opportunity for the                     14 https://nces.ed.gov/pubs/web/97578g.asp.           graduates are not required to report their
                                                Department to calculate program-level                     15 www.forbes.com/sites/stevecohen/2012/09/29/        earnings to their institution or to the
                                                outcomes. Now that the Department                       the-three-biggest-lies-in-college-admission/            Department, and there is no mechanism
                                                collects program information for all                    #9ed5ccc1754f.                                          in place for institutions to track students
                                                                                                          16 www.nytimes.com/2012/02/01/education/
                                                completers, it can easily expand                                                                                after they complete the program. The
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                                                                                                        gaming-the-college-rankings.html.
                                                program-level outcomes reporting for all                  17 www.cnn.com/2014/10/22/us/unc-report-
                                                                                                                                                                process of Departmental review of
                                                institutions. Therefore, not only does                  academic-fraud/index.html.                              individual appeals has been time-
                                                the Department believe that the D/E                       18 www.wsj.com/articles/temple-university-fires-a-

                                                rates calculation is not an appropriate                 dean-over-falsified-rankings-data-1531498822.           publication/measuring-quality-or-subsidy-how-
                                                measure for determining title IV                          19 Delisle, J. and Cooper, P. (2017). Measuring       state-appropriations-rig-the-federal-gainful-
                                                                                                        Quality or Subsidy? How State Appropriations Rig        employment-test/.
                                                eligibility, the availability of program-               the Federal Gainful Employment Test. Do state             20 https://www.irs.gov/newsroom/irs-releases-
                                                level data for all completers makes it                  subsidies for public universities favor the affluent?   new-tax-gap-estimates-compliance-rates-remain-
                                                possible to provide median earnings and                 Brookings Institute. Available at www.aei.org/          statistically-unchanged-from-previous-study.



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                                                                       Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules                                                 40175

                                                consuming and resource-intensive, with                  debt), as reported by institutions and the            especially since prevailing wages differ
                                                great variations in the format and                      National Student Loan Data System, to                 significantly from one occupation to the
                                                completeness of appeals packages. The                   the higher of mean and median earnings                next and one geographic region to the
                                                contents of some of these review                        obtained from the Social Security                     next.26 Therefore, a bright-line D/E rates
                                                packages would suggest continued                        Administration.                                       measure ignores the many research
                                                confusion about requirements on the                        Further, we believe that the analysis              findings that were either not taken into
                                                part of schools that would be                           and assumptions with respect to                       account in publishing the GE
                                                problematic if those earnings were still                earnings underlying the GE regulations                regulations or that were published since
                                                tied to any kind of eligibility threshold.              are flawed. In 2014, upon the                         the GE regulations were promulgated,
                                                   Executive Order 13777 instructs                      introduction of the GE regulations, the               that have demonstrated over and over
                                                agencies to reduce unnecessary burden                   Department claimed that graduates of                  again that gender, socioeconomic status,
                                                on regulated entities, while at the same                many GE programs had earnings less                    race, geographic location, and many
                                                time emphasizing the need for greater                   than those of the average high school                 other factors affect earnings.27 28 29 Even
                                                transparency. The Department believes                   dropout.22 The Washington Post                        among the graduates of the Nation’s
                                                that its proposed rescission of the GE                  highlighted several errors in this                    most prestigious colleges, earnings vary
                                                regulations is consistent with Executive                comparison including that the                         considerably depending upon the
                                                Order 13777 because the GE regulations                  Department failed to explain that the                 graduate’s gender, the field the graduate
                                                place tremendous burden upon certain                    three-year post-graduation GE earnings                pursued, whether or not the graduate
                                                programs and institutions, as evidenced                 compared the earnings of recent                       pursued full-time work, and the
                                                by comments from negotiators                            graduates with the earnings of a                      importance of work-life balance to the
                                                representing institutions not currently                 population of high school graduates that              individual.30 And yet, the Department
                                                covered by the GE regulations that                      could include those who are nearing the               has never contended that the majors
                                                extending the regulations to include                    end of 40-year careers or who own                     completed by the lower-earning
                                                their institution would impose                          successful long-existing businesses.23                graduates were lower performing or
                                                tremendous and costly burden. As noted                  Further comparisons to non-college                    lower quality than those that result in
                                                by various associations and institutions                graduates need to be contextualized,                  the highest wages.
                                                in response to the Department’s request                 given that the average person who
                                                for public feedback on which                                                                                  Additional Disclosures
                                                                                                        completes a registered apprenticeship
                                                regulations should be repealed,                         earns a starting salary of more than                    The Department published in the
                                                modified, or replaced, a large number of                                                                      Federal Register on November 1, 2016,
                                                                                                        $60,000 per year, and some college
                                                community colleges whose GE programs                                                                          regulations known as the Borrower
                                                                                                        graduates who pursue careers in allied
                                                have not been in danger of failing the D/                                                                     Defenses to Repayment (BD) regulations
                                                                                                        health, education, or human services—
                                                E rates measure have complained about                                                                         (81 FR 75926). The effective date of the
                                                                                                        regardless of what college they
                                                the cost of complying with the GE                                                                             BD regulations was most recently
                                                                                                        attended—earn less than non-college
                                                regulations, which has been viewed as                                                                         delayed until July 1, 2019 (83 FR 6458)
                                                                                                        graduates who complete an
                                                far out of proportion with the                                                                                to allow for additional negotiated
                                                                                                        apprenticeship program.24
                                                corresponding student benefits. For                                                                           rulemaking to reconsider those
                                                                                                          The Census Bureau, in its landmark
                                                example, the American Association of                                                                          regulations. Following the conclusion of
                                                                                                        2002 report, The Big Payoff, was careful
                                                Community Colleges pointed to the                                                                             the negotiated rulemaking process, on
                                                                                                        to explain that individual earnings may               July 31, 2018, the Department published
                                                regulations’ extensive reporting and
                                                                                                        differ significantly due to a variety of              in the Federal Register a notice of
                                                disclosure requirements.21 Despite this
                                                                                                        factors, including an individual’s work               proposed rulemaking in which the
                                                additional burden to GE programs, the
                                                                                                        history, college major, personal                      Department proposes, among other
                                                GE regulations provide only limited
                                                                                                        ambition, and lifestyle choices.25 The                things, to withdraw (i.e., rescind)
                                                transparency since the regulations apply
                                                                                                        report also pointed out that even some                specified provisions of the BD
                                                to a small subset of title IV-eligible
                                                                                                        individuals with graduate degrees, such               regulations already published but not
                                                programs. Instead, the Department
                                                                                                        as those in social work or education,                 yet effective.
                                                believes that its efforts to expand the
                                                                                                        may fail to earn as much as a high                      Among these BD regulations are two
                                                College Scorecard, which includes all
                                                                                                        school graduate who works in the                      disclosures that were included among
                                                programs that participate in the title IV,
                                                HEA programs, to include program-level                  skilled trades. In other words, both debt             the topics for negotiation by the GE
                                                earnings, debt, and other data, will                    and earnings outcomes depend on a                     negotiating committee, as part of the
                                                better accomplish our goal of increasing                number of factors other than program                  larger discussion about the disclosure
                                                transparency.                                           quality or institutional performance.                 requirements in the GE regulations. One
                                                   The GE regulations include, among                    There are tremendous complexities                     of these provisions would have required
                                                other things, a complicated formula for                 involved in comparing earnings,                       proprietary institutions to provide a
                                                calculating a program’s D/E rates, a set                                                                      warning to students if the loan
                                                                                                          22 www.ed.gov/news/press-releases/obama-
                                                of thresholds that are used to determine                                                                      repayment rate for the institution did
                                                                                                        administration-takes-action-protect-americans-
                                                whether a program’s D/E rates are                       predatory-poor-performing-ca/.                        not meet a specified bright-line
                                                passing, failing, or in the zone, and a                   23 www.washingtonpost.com/news/fact-checker/

                                                number of disclosure requirements. The                  wp/2014/04/11/the-obama-administrations-claim-          26 nces.ed.gov/pubs2006/2006321.pdf.

                                                D/E rates measure compares median                       that-72-percent-of-for-profits-programs-have-           27 www.brookings.edu/wp-content/uploads/2016/
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                                                                                                        graduates-making-less-than-high-school-dropouts/      07/Deconstructing-and-Reconstructing-the-College-
                                                student loan debt (including                              24 Ibid.                                            Scorecard.pdf.
                                                institutional, private, and Federal loan                  25 Cheeseman Day, J. & Newburger, E. The Big          28 trends.collegeboard.org/sites/default/files/

                                                                                                        Payoff: Educational Attainment and Synthetic          education-pays-2016-full-report.pdf.
                                                  21 American Association of Community College.                                                                 29 nces.ed.gov/pubs/web/97578g.asp.
                                                                                                        Estimates of Work-Life Earnings, Current
                                                (September 20, 2017). Comments of the American          Population Reports, U.S. Department of Commerce,        30 Witteveen, D. & Attewell, P. The earnings

                                                Association of Community Colleges. Docket ID: ED–       Economics and Statistics Administration, U.S.         payoff from attending a selective college. Social
                                                2017–OS–0074. Available at https://                     Census Bureau, 2002. Available at www.census.gov/     Science Research 66 (2017) 154–169. Available at
                                                www.regulations.gov/document?D=ED-2017-OS-              content/dam/Census/ibrary/publications/2002/          www.sciencedirect.com/science/article/pii/
                                                0074-15336.                                             demo/p23–210.pdf.                                     S0049089X16301430.



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                                                40176                  Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules

                                                standard. The other provision would                        In summary, the Department proposes                borrowers compare all of their available
                                                have required institutions to notify                    to rescind the GE regulations for a                   options.
                                                students if the institution was required                number of reasons, including:                            Therefore, the Department proposes to
                                                under other provisions of the BD                           • Research findings published                      rescind the GE regulations. Removal of
                                                regulations to provide the Department                   subsequent to the promulgation of the                 the GE regulations would include
                                                with financial protection, such as a                    regulation confirm that the D/E rates                 removing the provisions in § 668.401
                                                letter of credit.                                       measure is inappropriate for                          through § 668.415, including the
                                                                                                        determining an institution’s continuing               provisions regarding the scope and
                                                   In response to the 2016 Borrower
                                                                                                        eligibility for title IV participation;               purpose of those regulations (§ 668.401),
                                                Defense proposed regulations, the                                                                             the gainful employment framework
                                                Department received many comments                          • A review of GE disclosures posted
                                                                                                                                                              (§ 668.403), calculating D/E rates,
                                                contending that the regulations unfairly                by institutions over the last two years
                                                                                                                                                              issuing and challenging those rates, and
                                                targeted proprietary institutions (81 FR                has revealed troubling inconsistencies
                                                                                                                                                              providing for a D/E rates alternate
                                                75934). Others commented that the loan                  in the way that job placement rates are
                                                                                                                                                              earnings appeal (§ 668.404-§ 668.406).
                                                repayment rate disclosure reflected                     determined and reported;
                                                                                                                                                              Consequently, by removing the
                                                financial circumstances and not                            • The use of a standardized                        provisions pertaining to the D/E rates
                                                educational quality. The Department                     disclosure template and the physical                  measure, the consequences of the D/E
                                                believes that these comments are in line                distribution of disclosures to students is            rates measure would also be removed
                                                with how the Department views GE and                    more burdensome than originally                       from the regulations (§ 668.410), as well
                                                the reasons provided for rescinding it.                 predicted; and                                        as the required certifications (§ 668.414).
                                                As such, the Department also proposes                      • GE outcomes data reveal the                      In addition, current sections that
                                                to remove the requirement for                           disparate impact that the GE regulation               condition title IV eligibility on
                                                institutions to disclose information                    has on some academic programs.                        outcomes under the D/E rates measure,
                                                related to student loan repayment rates.                   In July 2018, the Department                       the methodology for calculating the D/
                                                With respect to the financial protection                published a notice of proposed                        E rates, the reporting requirements
                                                disclosure, the Department believes that                rulemaking that more appropriately                    necessary to calculate D/E rates and
                                                matters such as the calculation of an                   addresses concerns about institutional                certain other certifications and
                                                institution’s composite score and                       misrepresentation by providing direct                 disclosures, and subpart R pertaining to
                                                requirements regarding letters of credit                remedies to students harmed by such                   program cohort default rates, a potential
                                                are complex and beyond the level of                     misrepresentations (83 FR 37242). In                  disclosure item, would no longer be
                                                understanding of a typical high school                  addition, the Department believes that                required, and the Department proposes
                                                graduate considering enrollment in a                    by publishing outcomes data through                   to remove those sections, as well
                                                postsecondary education program.                        the College Scorecard for all title IV                (§§ 668.411–668.413; subpart R).
                                                Therefore, a student may misjudge the                   participating programs, it will be more               2. Technical and Conforming Changes
                                                meaning of such a disclosure to indicate                difficult for institutions to misrepresent
                                                the imminent closure of the institution,                likely program outcomes, including                       Proposed § 600.10(c)(1) would remove
                                                which is not necessarily the case. While                earnings or job placement rates, which                current paragraph (i) and redesignate
                                                in certain instances, a letter of credit                should not be determined or published                 the remaining paragraphs. Current
                                                may serve as an indicator of financial                  until such time that a reliable data                  § 600.10(c)(1)(i) establishes title IV
                                                risk to taxpayers, there are other                      source is identified to validate such                 eligibility for GE programs. The
                                                instances where this may not be the                     data. For the reasons cited above, the                Department’s proposed regulations
                                                case. Therefore, the Department                         Department proposes to amend or                       would remove the GE regulations
                                                proposes to remove the requirement for                  rescind the GE regulations.                           referenced in this paragraph, and
                                                institutions to disclose that they are                                                                        therefore we are proposing to remove
                                                required to post a letter of credit and the             Scope of the Proposed Regulations                     this paragraph and renumber this
                                                related circumstances.                                  1. Removal of GE Regulations                          section. This technical correction was
                                                                                                                                                              proposed during the negotiations
                                                   In discussion with the negotiators,                     The Department proposes to rescind                 because the Department proposed
                                                those representing attorneys general,                   the GE regulations because, among other               removing the GE regulations and
                                                legal organizations, and student                        things, they are based on a D/E metric                moving to a disclosure-only framework.
                                                advocacy groups opposed eliminating                     that has proven to not be an appropriate              Discussion related to the removal of
                                                these disclosures because they believed                 proxy for use in determining continuing               sanctions and the disclosure framework
                                                the disclosures would benefit students.                 eligibility for title IV participation; they          is summarized above, but there were no
                                                However, the Department believes that                   incorporate a threshold that the                      additional comments made solely on
                                                these disclosures will not provide                      researchers whose work gave rise to the               this technical change. Additionally,
                                                meaningful or clear information to                      standard questioned the relevance of to               proposed § 600.10(c)(1)(iii) would
                                                students, and will increase cost and                    student loan borrowing levels; and they               require programs that are at least 300
                                                burden to institutions that would have                  rely on a job placement rate reporting                clock hours but less than 600 clock
                                                to disclose this information.                           requirement that the Department was                   hours and do not admit as regular
                                                   Although these two disclosures were                  unable to define consistently or provide              students only persons who have
                                                discussed by the negotiated rulemaking                  a data source to ensure its reliability and           completed the equivalent of an
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                                                committee convened to consider the GE                   accuracy and that has since been                      associate’s degree to obtain the
                                                regulations, because they are formally                  determined is unreliable and vulnerable               Secretary’s approval to be eligible for
                                                associated with the borrower defense                    to accidental or intentional                          title IV aid student loans. This is
                                                regulations, their proposed withdrawal                  misreporting. In addition, because the                consistent with § 668.8(d) where
                                                is addressed through the proposed                       GE regulations require only a small                   programs of at least 300 clock hours are
                                                regulatory text in the 2018 notice of                   portion of higher education programs to               referenced and is consistent with the
                                                proposed rulemaking relating to the BD                  report outcomes, they do not adequately               statute. This proposal was also made
                                                regulations.                                            inform consumer choice or help                        during the negotiations, but the


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                                                                       Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules                                           40177

                                                committee did not have comments                         regulations do not impose total costs                 governments in the exercise of their
                                                related to this aspect of the proposals.                greater than zero, the requirement to                 governmental functions.
                                                  The Department also proposes to                       offset new regulations in Executive
                                                remove references to subpart Q in                                                                             Regulatory Impact Analysis
                                                                                                        Order 13771 would not apply.
                                                § 600.21(a)(11) as part of its proposed                    We have also reviewed these                          In accordance with the Executive
                                                removal of the GE regulations. Likewise,                regulations under Executive Order                     orders, the Department has assessed the
                                                we propose technical edits to § 668.8(d)                13563, which supplements and                          potential costs and benefits, both
                                                to remove references to subpart Q. The                  explicitly reaffirms the principles,                  quantitative and qualitative, of this
                                                Department also proposes to remove                      structures, and definitions governing                 regulatory action. This proposed
                                                and reserve current § 668.6, which lists                regulatory review established in                      regulatory action would have an annual
                                                disclosure requirements for GE                          Executive Order 12866. To the extent                  economic benefit of approximately $209
                                                programs that ceased to have effect                     permitted by law, Executive Order                     million in reduced paperwork burden
                                                upon the effective date of the disclosure               13563 requires that an agency—                        and increased transfers to Pell Grant
                                                requirements under the 2014 GE                             (1) Propose or adopt regulations only              recipients and student loan borrowers
                                                regulations.                                            on a reasoned determination that their                and subsequently institutions of about
                                                                                                        benefits justify their costs (recognizing             $518 million annually at the 7 percent
                                                Executive Orders 12866, 13563, and                                                                            discount rate, as further explained in
                                                13771                                                   that some benefits and costs are difficult
                                                                                                        to quantify);                                         the Analysis of Costs and Benefits
                                                   Under Executive Order 12866, it must                    (2) Tailor its regulations to impose the           section.
                                                be determined whether this regulatory                   least burden on society, consistent with              A. Need for Regulatory Action
                                                action is ‘‘significant’’ and, therefore,               obtaining regulatory objectives and
                                                subject to the requirements of the                                                                               This regulatory action is necessary to
                                                                                                        taking into account—among other                       comply with Executive Order 13777,
                                                Executive order and subject to review by                things, and to the extent practicable—
                                                the Office of Management and Budget                                                                           whereby the President instructed
                                                                                                        the costs of cumulative regulations;                  agencies to reduce unnecessary burden
                                                (OMB). Section 3(f) of Executive Order                     (3) In choosing among alternative
                                                12866 defines a ‘‘significant regulatory                                                                      on regulated entities and to increase
                                                                                                        regulatory approaches, select those                   transparency. Because the GE
                                                action’’ as an action likely to result in               approaches that maximize net benefits
                                                a rule that may—                                                                                              regulations significantly burden certain
                                                                                                        (including potential economic,                        programs and institutions but provide
                                                   (1) Have an annual effect on the
                                                                                                        environmental, public health and safety,              limited transparency at only a small
                                                economy of $100 million or more, or
                                                                                                        and other advantages; distributive                    subset of title IV-eligible programs, the
                                                adversely affect a sector of the economy,
                                                                                                        impacts; and equity);                                 Department proposes to rescind them.
                                                productivity, competition, jobs, the
                                                                                                           (4) To the extent feasible, specify                   Furthermore, when developing the GE
                                                environment, public health or safety, or
                                                                                                        performance objectives, rather than the               regulations, the Department, as noted in
                                                State, local, or Tribal governments or
                                                                                                        behavior or manner of compliance a                    feedback received from multiple
                                                communities in a material way (also
                                                                                                        regulated entity must adopt; and                      institutions, underestimated the burden
                                                referred to as an ‘‘economically
                                                                                                           (5) Identify and assess available                  on institutions associated with the use
                                                significant’’ rule);
                                                   (2) Create serious inconsistency or                  alternatives to direct regulation,                    of a standardized disclosure template in
                                                otherwise interfere with an action taken                including economic incentives—such as                 publishing program outcomes and
                                                or planned by another agency;                           user fees or marketable permits—to                    distributing notifications directly to
                                                   (3) Materially alter the budgetary                   encourage the desired behavior, or                    prospective and current students. For
                                                impacts of entitlement grants, user fees,               provide information that enables the                  example, the estimate did not include
                                                or loan programs or the rights and                      public to make choices.                               an assessment of burden on the
                                                obligations of recipients thereof; or                      Executive Order 13563 also requires                government to support the development
                                                   (4) Raise novel legal or policy issues               an agency ‘‘to use the best available                 of an approved disclosure template and
                                                arising out of legal mandates, the                      techniques to quantify anticipated                    the distribution of the template
                                                President’s priorities, or the principles               present and future benefits and costs as              populated with the appropriate data.
                                                stated in the Executive order.                          accurately as possible.’’ The Office of               The Department has determined that it
                                                   This proposed regulatory action is an                Information and Regulatory Affairs of                 would be more efficient to publish data
                                                economically significant regulatory                     OMB has emphasized that these                         using the College Scorecard, not only to
                                                action subject to review by OMB under                   techniques may include ‘‘identifying                  reduce reporting burden but to enable
                                                section 3(f) of Executive Order 12866                   changing future compliance costs that                 students to more readily review the data
                                                because it would have an annual effect                  might result from technological                       and compare institutions.
                                                on the economy of over $100 million.                    innovation or anticipated behavioral
                                                   Under Executive Order 13771, for                     changes.’’                                            B. Analysis of Costs and Benefits
                                                each new regulation that the                               We are issuing this proposed                          These proposed regulations would
                                                Department proposes for notice and                      regulatory action only on a reasoned                  affect prospective and current students;
                                                comment or otherwise promulgates that                   determination that its benefits justify its           institutions with GE programs
                                                is a significant regulatory action under                costs. In choosing among alternative                  participating in the title IV, HEA
                                                Executive Order 12866 and that imposes                  regulatory approaches, we selected                    programs; and the Federal government.
                                                total costs greater than zero, it must                  those approaches that would maximize                  The Department expects institutions
amozie on DSK3GDR082PROD with PROPOSALS1




                                                identify two deregulatory actions. For                  net benefits. Based on the analysis that              and the Federal government would
                                                FY 2018, any new incremental costs                      follows, the Department believes that                 benefit as the action would remove
                                                associated with a new regulation must                   these proposed regulations are                        highly burdensome reporting,
                                                be fully offset by the elimination of                   consistent with the principles in                     administrative costs, and sanctions. The
                                                existing costs through deregulatory                     Executive Order 13563.                                Department has also analyzed the costs
                                                actions, unless required by law or                         We also have determined that this                  of this regulatory action and has
                                                approved in writing by the Director of                  regulatory action would not unduly                    determined that it would impose no
                                                the OMB. Because these proposed                         interfere with State, local, and Tribal               additional costs ($0). As detailed earlier,


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                                                40178                                Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules

                                                pursuant to this proposed regulatory                                                    title IV, HEA eligibility. However, 2,050                                           TABLE 2—INSTITUTIONS WITH 2015
                                                action, the Department would remove                                                     programs were identified as failing                                                        GE PROGRAMS 31
                                                the GE regulations and adopt no new                                                     programs or programs in the zone based
                                                ones.                                                                                   on their 2015 GE rates and are at risk of                                            Type            Institutions                 Programs
                                                                                                                                        losing eligibility under the GE
                                                1. Students
                                                                                                                                        regulations. In 2015–16, 329,250                                               Public ........                    865                     2,493
                                                   The proposed removal of the GE                                                       students were enrolled in zone GE                                              Private .......                    206                       476
                                                regulations may result in both costs and                                                programs and 189,920 students were                                             Proprietary                      1,546                     5,681
                                                benefits to students, including the costs                                               enrolled in failing programs.                                                       Total ...                   2,617                     8,650
                                                and benefits associated with continued                                                     Under the proposed regulations, the
                                                enrollment in zone and failing GE                                                       Department would discontinue certain                                             All 2,617 institutions with GE
                                                programs and the benefit of reduced                                                     GE information collections, which is                                           programs would see savings from
                                                information collections. Students may                                                   detailed further in the Paperwork
                                                see costs from continued enrollment in                                                                                                                                 reduced reporting requirements due to
                                                                                                                                        Reduction Act of 1995 section of this
                                                programs that may have, if the GE                                                                                                                                      removal of the GE regulations. As
                                                                                                                                        preamble. Two of these information
                                                regulations were in effect, lost title IV                                               collections impact students—OMB                                                discussed further in the Paperwork
                                                eligibility and the student would have                                                  control number 1845–0123 and OMB                                               Reduction Act of 1995 section of this
                                                discontinued enrollment. Students may                                                   control number 1845–0107. By                                                   preamble, reduction in burden
                                                also see benefits from not having to                                                    removing these collections, the                                                associated with removing the GE
                                                transfer to another institution in cases                                                proposed regulations would reduce                                              regulatory information collections for
                                                where their program would have lost                                                     burden on students by 2,167,129 hours                                          institutions is 4,758,499 hours.
                                                title IV eligibility. Burden on students                                                annually. The burden associated with                                           Institutions would benefit from these
                                                will be reduced by not having to                                                        these information collections is                                               proposed changes, which would reduce
                                                respond to schools to acknowledge                                                       attributed to students being required to                                       their costs by $173,923,138 annually
                                                receipt of disclosures.                                                                 read the warning notices and certify that                                      using the hourly rate of $36.55.
                                                   There are student costs and benefits                                                 they received them. Therefore, using the                                          Under the proposed regulations,
                                                associated with enrollment in a program                                                 individual hourly rate of $16.30, the                                          programs that had or have D/E rates that
                                                that would have otherwise lost                                                          benefit due to reduced burden for                                              are failing or in the zone could see
                                                eligibility to participate in the title IV,                                             students is $35,324,203 annually                                               benefits because they would no longer
                                                HEA programs under the GE                                                               (2,167,129 hours per year * $16.30 per
                                                regulations; however, the actual                                                                                                                                       be subject to sanctions, incur the cost of
                                                                                                                                        hour).
                                                outcome for students enrolled in failing                                                                                                                               appealing failing or zone D/E rates, or be
                                                or zone programs under the GE                                                           2. Institutions                                                                at risk of losing their title IV eligibility.
                                                regulations is unknown. Under the GE                                                      The proposed regulations would also                                          Specifically, 778 institutions
                                                regulations, if a GE program becomes                                                    benefit institutions administering GE                                          administering 2,050 zone or failing GE
                                                ineligible to participate in the title IV,                                              programs. These institutions would                                             programs would receive these benefits,
                                                HEA programs, students would not be                                                     have a reduced paperwork burden and                                            which represents 24 percent of the 8,650
                                                able to receive title IV aid to enroll in                                               no longer be subject to a potential loss                                       2015 GE programs. Disaggregation of
                                                it. Because D/E rates have been                                                         of title IV eligibility. The table below                                       these program counts and counts by
                                                calculated under the GE regulations for                                                 shows the distribution of institutions                                         institutional type are provided in the
                                                only one year, no programs have lost                                                    administering GE programs by sector.                                           table below.
                                                                                                     TABLE 3—INSTITUTIONS WITH 2015 GE ZONE OR FAILING PROGRAMS 32
                                                                                                                                                                                                                              Zone pro-          Failing pro-             Zone or failing
                                                                                                                     Type                                                                              Institutions            grams               grams                    programs

                                                Public ...........................................................................................................................................                      9                9     ........................                9
                                                Private .........................................................................................................................................                      34               68                         21                 89
                                                Proprietary ...................................................................................................................................                       735            1,165                       787               1,952

                                                      Total .....................................................................................................................................                     778            1,242                       808               2,050



                                                  Cosmetology undergraduate certificate                                                 a 2015 GE rate, 91 failed the D/E rates                                        institutions would be most significantly
                                                programs are the most common type of                                                    measure and 270 fell into the zone.                                            affected by the proposed removal of GE
                                                program in the zone or failing                                                          Table 4 shows the most frequent types                                          sanctions as they would continue to be
                                                categories. Among the 895 cosmetology                                                   of programs with failing or zone D/E                                           eligible to participate in title IV, HEA
                                                undergraduate certificate programs with                                                 rates. These programs and their                                                programs. As indicated in the
                                                                                                                                           32 The count of programs includes programs that
                                                                                                                                                                                                                       Accounting Statement, the money
                                                   31 The count of programs includes programs that

                                                had preliminary rates calculated, but were not                                          had preliminary rates calculated, but were not                                 received by these institutions is a
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                                                designated with an official pass, zone, or fail status                                  designated with an official pass, zone, or fail status                         transfer from the taxpayers through
                                                due to reaccreditation and reinstatements of                                            due to reaccreditation and reinstatements of                                   students who choose to attend the
                                                eligibility during the validation process of                                            eligibility during the validation process of                                   institutions’ programs.
                                                establishing D/E rates.                                                                 establishing D/E rates.




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                                                                             Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules                                                                                40179

                                                                           TABLE 4—ZONE OR FAILING 2015 GE PROGRAMS BY FREQUENCY OF PROGRAM TYPES 33
                                                                           CIP                                                        Credential level                                 Zone            Fail        Zone or Fail       All programs

                                                Cosmetology/Cosmetologist, General. .....                        Undergraduate Certificate ........................                       270                 91              361                895
                                                Medical/Clinical Assistant. ........................             Associates Degree ...................................                     35                 56               91                119
                                                Medical/Clinical Assistant. ........................             Undergraduate Certificate ........................                        78                 12               90                424
                                                Massage Therapy/Therapeutic Massage.                             Undergraduate Certificate ........................                        43                  4               47                270
                                                Business Administration and Manage-                              Associates Degree ...................................                     24                 22               46                 74
                                                   ment, General..
                                                Legal Assistant/Paralegal. ........................              Associates Degree ...................................                     20              25                  45                 58
                                                Barbering/Barber. ......................................         Undergraduate Certificate ........................                        22              16                  38                 96
                                                Graphic Design. ........................................         Associates Degree ...................................                     16              17                  33                 45
                                                Criminal Justice/Safety Studies. ...............                 Associates Degree ...................................                     20              11                  31                 41
                                                Massage Therapy/Therapeutic Massage.                             Associates Degree ...................................                      8              19                  27                 33
                                                All other programs ....................................          ...................................................................      706             535               1,241              6,595

                                                     Total ...................................................   ...................................................................     1,242            808               2,050              8,650



                                                3. Federal Government                                                   eliminating sending completer lists is                                   Impact section, the Department does not
                                                   Under the proposed regulations, the                                  $2,196 annually (40*54.91). Institutions                                 specifically quantify those impacts.
                                                Federal government would benefit from                                   can correct and challenge the lists, and
                                                                                                                                                                                                 C. Net Budget Impacts
                                                reduced administrative burden                                           for the 2015 D/E rates the Department
                                                                                                                        processed 90,318 completer list                                             The Department proposes to remove
                                                associated with removing provisions in                                                                                                           the GE regulations, which include
                                                                                                                        corrections and adjudicated 2,894
                                                the GE regulations and from                                                                                                                      provisions for GE programs’ loss of title
                                                                                                                        challenges. The Department estimates it
                                                discontinuing information collections.                                                                                                           IV, HEA program eligibility based on
                                                                                                                        took Department staff 1,420 hours total
                                                The Federal government would incur                                                                                                               performance on the D/E rates measure.
                                                                                                                        to make completer list corrections.
                                                annual costs to fund more Pell Grants                                                                                                            In estimating the impact of the GE
                                                                                                                        Similarly, the Department estimates it
                                                and title IV loans, as discussed in the                                                                                                          regulations at the time they were
                                                                                                                        took $1,500,000 in contractor support
                                                Net Budget Impact section.                                                                                                                       developed and in subsequent budget
                                                                                                                        and 1,400 hours of Federal staff time
                                                   Reduced administrative burden due to                                                                                                          estimates, the Department attributed
                                                                                                                        total to adjudicate the challenges. Using
                                                the proposed regulatory changes would                                                                                                            some savings in the Pell Grant program
                                                                                                                        the hourly rate of a GS–13 step 1 in the
                                                result from removing the provisions in                                                                                                           based on the assumption that some
                                                                                                                        Washington, DC area of $46.46, the
                                                the GE regulations regarding sending                                                                                                             students, including prospective
                                                                                                                        estimated benefit due to reduced costs
                                                completer lists to institutions,                                        from eliminating completer lists,                                        students, would drop out of
                                                adjudicating completer list corrections,                                corrections, and challenges is                                           postsecondary education as their
                                                adjudicating challenges, and                                            $1,631,017 ($1,500,000 contractor                                        programs became ineligible or
                                                adjudicating alternate earnings appeals.                                support + (1420 + 1400) staff hours *                                    imminently approached ineligibility.
                                                Under the GE regulations, the                                           $46.46 per hour).                                                           This assumption has remained in the
                                                Department expects to receive about 500                                    Finally, under the proposed                                           baseline estimates for the Pell Grant
                                                earnings appeals annually and estimates                                 regulations, the Department would                                        program, with an average of
                                                that it would take Department staff 10                                  rescind information collections with                                     approximately 123,000 dropouts
                                                hours per appeal to evaluate the                                        OMB control numbers 1845–0121,                                           annually over the 10-year budget
                                                information submitted. Using the hourly                                 1845–1022, and 1845–0123. This would                                     window from FY2019 to FY2028. By
                                                rate of a GS–13 Step 1 in the                                           result in a Federal government benefit                                   applying the estimated average Pell
                                                Washington, DC area of $46.46,34 the                                    due to reduced contractor costs of                                       Grant per recipient for proprietary
                                                estimated benefit due to reduced costs                                  $23,099,946 annually. Therefore, the                                     institutions ($3,649) for 2019 to 2028 in
                                                from eliminating earnings appeals is                                    Department estimates an annual benefit                                   the PB2019 Pell Baseline, the estimated
                                                $232,300 annually (500 earnings                                         due to reduced administrative costs                                      net budget impact of the GE regulations
                                                appeals * 10 hours per appeal * $46.46                                  under the proposed regulations of                                        in the PB2019 Pell baseline is
                                                per hour). Similarly, the Department                                    $24,965,459 ($232,300 + $2,196 +                                         approximately $¥4.5 billion. As was
                                                sends out 31,018 program completer                                      $1,631,017 + $23,099,946).                                               indicated in the Primary Student
                                                lists to institutions annually and                                         The Department would also incur                                       Response assumption in the 2014 GE
                                                estimates that it takes about 40 hours                                  increased budget costs due to increased                                  final rule,36 much of this impact was
                                                total to complete. Using the hourly rate                                transfers of Pell Grants and title IV                                    expected to come from the warning that
                                                of a GS–14 Step 1 in the Washington,                                    loans, as discussed further in the Net                                   a program could lose eligibility in the
                                                DC area of $54.91,35 the estimated                                      Budget Impacts section. The estimated                                    next year. If we attribute all of the
                                                benefit due to reduced costs from                                       annualized costs of increased Pell                                       dropout effect to loss of eligibility, it
                                                                                                                        Grants and title IV loans from                                           would generate a maximum estimated
                                                   33 The count of programs includes programs that
                                                                                                                        eliminating the GE regulations is                                        Federal net budget impact of the
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                                                had preliminary rates calculated, but were not
                                                designated with an official pass, zone, or fail status
                                                                                                                        approximately $518 to $527 million at                                    proposed regulations of $4.5 billion in
                                                due to reaccreditation and reinstatements of                            7 percent and 3 percent discount rates,
                                                eligibility during the validation process of                            respectively. The Department recognizes                                    36 See 79 FR 211, Table 3.4: Student Response
                                                establishing D/E rates.                                                 that this may be offset by student and                                   Assumptions, p. 65077, published October 31,
                                                   34 Salary Table 2018–DCB effective January 2018.
                                                                                                                        institutional response to institutional                                  2014. Available at www.regulations.gov/
                                                Available at www.opm.gov/policy-data-oversight/                                                                                                  document?D=ED-2014-OPE-0039-2390. The dropout
                                                pay-leave/salaries-wages/salary-tables/pdf/2018/                        and program level disclosures in the                                     rate increased from 5 percent for a first zone result
                                                DCB_h.pdf.                                                              College Scorecard and other resources,                                   and 15 percent for a first failure to 20 percent for
                                                   35 Ibid.                                                             but, as discussed in the Net Budget                                      the fourth zone, second failure, or ineligibility.



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                                                40180                           Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules

                                                costs by removing the GE regulations                                         ¥1 percent at public institutions, and                                       institutional behavior in response to
                                                from the PB2019 Pell Grant baseline.                                         0.2 percent at private institutions. If we                                   disclosures in the College Scorecard and
                                                   The Department also estimated an                                          attribute all of the excess decline at                                       other resources. Generally, the
                                                impact of warnings and ineligibility in                                      proprietary institutions to the potential                                    Department does not attribute a
                                                the analysis for the final 2014 GE rule,                                     loss of eligibility under the GE                                             significant budget impact to disclosure
                                                that, due to negative subsidy rates for                                      regulations and increase estimated                                           requirements absent substantial
                                                PLUS and Unsubsidized loans at the                                           volume in the 2-year proprietary risk                                        evidence that such information will
                                                time, offset the savings in Pell Grants by                                   group that has the highest subsidy rate                                      change borrower or institutional
                                                $695 million.37 The effect of the GE                                         in the PB2019 baseline by the difference                                     behavior. The Department welcomes
                                                regulations is not specifically identified                                   in the average annual change (12                                             comments on the net budget impact
                                                in the PB2019 baseline, but it is one of                                     percent for subsidized and unsubsidized                                      analysis. Information received will be
                                                several factors reflected in declining                                       loans and 9 percent for PLUS), then the                                      considered in development of the Net
                                                loan volume estimates. The                                                   estimated net budget impact of the                                           Budget Impact analysis of the final rule.
                                                development of GE regulations since the                                      removal of the ineligibility sanction in
                                                first negotiated rulemaking on the                                           the proposed regulations on the Direct                                       D. Accounting Statement
                                                subject was announced on May 26,                                             Loan program is a cost of $848 million.
                                                2009, has coincided with demographic                                            Therefore, the total estimated net                                          As required by OMB Circular A–4 we
                                                and economic trends that significantly                                       budget impact from the proposed                                              have prepared an accounting statement
                                                influence postsecondary enrollment,                                          regulations is $5.3 billion cost in                                          showing the classification of the
                                                especially in career-oriented programs                                       increased transfers from the Federal                                         expenditures associated with the
                                                classified as GE programs under the GE                                       government to Pell Grant recipients and                                      provisions of the proposed regulations
                                                regulations. Enrollment and aid                                              student loan borrowers and                                                   (see Table 5). This table provides our
                                                awarded have both declined                                                   subsequently to institutions, primarily                                      best estimate of the changes in annual
                                                substantially from peak amounts in                                           from the elimination of the ineligibility                                    monetized transfers as a result of the
                                                2010 and 2011.                                                               provision of the GE regulations.                                             proposed regulations. The estimated
                                                   As classified under the GE                                                However, this estimate assumes that a                                        reduced reporting and disclosure
                                                regulations, GE programs serve non-                                          borrower who could no longer enroll in                                       burden equals the ¥$209 million
                                                traditional students who may be more                                         a GE program that loses title IV                                             annual paperwork burden calculated in
                                                responsive to immediate economic                                             eligibility would not enroll in a different                                  the Paperwork Reduction Act of 1995
                                                trends in making postsecondary                                               program that passes the D/E rates                                            section (and also appearing on page
                                                education decisions. Non-consolidated                                        measure, but would instead opt out of                                        65004 of the regulatory impact analysis
                                                title IV loans made at proprietary                                           a postsecondary education experience.                                        accompanying the 2014 final rule). The
                                                institutions declined 48 percent                                             The long-term impact to the student and                                      annualization of the paperwork burden
                                                between AY2010–11 and AY2016–17,                                             the government of the decision to                                            differs from the 2014 final rule as the
                                                compared to a 6 percent decline at                                           pursue no postsecondary education                                            annualization of the paperwork burden
                                                public institutions, and a 1 percent                                         could be significant, but cannot be                                          for that rule assumed the same pattern
                                                increase at private institutions. The                                        estimated for the purpose of this                                            as the 2011 rule that featured multiple
                                                average annual loan volume change                                            analysis.                                                                    years of data being reported in the first
                                                from AY2010–11 to AY2016–17 was                                                 This is a maximum net budget impact                                       year with a significant decline in burden
                                                ¥10 percent at proprietary institutions,                                     and could be offset by student and                                           in subsequent years.

                                                                                   TABLE 5—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES
                                                                                                                                                         [In millions]

                                                                                                                               Category                                                                                                             Benefits

                                                Discount Rate ..........................................................................................................................................................                 7%                         3%
                                                Reduced reporting and disclosure burden for institutions with GE programs under the GE regulations. .............                                                                       $209                       $209

                                                                                                                               Category                                                                                                               Costs

                                                Discount Rate ..........................................................................................................................................................                  7%                         3%
                                                Costs ........................................................................................................................................................................   ........................   ........................

                                                                                                                               Category                                                                                                            Transfers

                                                Discount Rate ..........................................................................................................................................................                  7%                         3%
                                                Increased transfers to Pell Grant recipients and student loan borrowers from elimination of ineligibility provision
                                                  of GE regulations. ................................................................................................................................................                   $518                       $527
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                                                  37 See 79 FR 211, pp 65081–82, available at

                                                www.regulations.gov/document?D=ED-2014-OPE-
                                                0039-2390.

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                                                                       Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules                                         40181

                                                Regulatory Flexibility Act (RFA)                        economic impact on a substantial                      to the GE regulations in the following
                                                Certification                                           number of small entities.                             previously approved information
                                                                                                           Further, the Department has                        collections.
                                                   The U.S. Small Business                              determined that the impact on small
                                                Administration (SBA) Size Standards                                                                           1845–0107—Gainful Employment
                                                                                                        entities affected by the proposed
                                                define proprietary institutions as small                                                                      Disclosure Template
                                                                                                        regulations would not be significant. For
                                                businesses if they are independently                    these 1,357 institutions, the effect of the              Individuals—13,953,411 respondents
                                                owned and operated, are not dominant                    proposed regulations would be to                      for a total of 1,116,272 burden hours
                                                in their field of operation, and have total             eliminate GE paperwork burden and                     eliminated.
                                                annual revenue below $7,000,000.                        potential loss of title IV eligibility. We               For Profit Institutions—2,526
                                                Nonprofit institutions are defined as                   believe that the economic impacts of the              respondents for a total of 1,798,489
                                                small entities if they are independently                proposed paperwork and title IV                       burden hours eliminated.
                                                owned and operated and not dominant                     eligibility changes would be beneficial                  Private Non Profit Institutions—318
                                                in their field of operation. Public                     to small institutions. Accordingly, the               respondents for a total of 27,088 burden
                                                institutions are defined as small                       Secretary hereby proposes to certify that             hours eliminated.
                                                organizations if they are operated by a                 these proposed regulations, if                           Public Institutions—1,117
                                                government overseeing a population                      promulgated, would not have a                         respondents for a total of 176,311
                                                below 50,000.                                           significant economic impact on a                      burden hours eliminated.
                                                   The Department lacks data to identify                substantial number of small entities.
                                                which public and private, nonprofit                     The Department invites comment from                   1845–0121—Gainful Employment
                                                institutions qualify as small based on                  members of the public who believe                     Program—Subpart R—Cohort Default
                                                the SBA definition. Given the data                      there will be a significant impact on                 Rates
                                                limitations and to establish a common                   small institutions.                                      For Profit Institutions—1,434
                                                definition across all sectors of                        Paperwork Reduction Act of 1995                       respondents for a total of 5,201 burden
                                                postsecondary institutions, the                                                                               hours eliminated.
                                                Department uses its proposed data-                        As part of its continuing effort to
                                                                                                                                                                 Private Non Profit Institutions—47
                                                driven definitions for ‘‘small                          reduce paperwork and respondent
                                                                                                                                                              respondents for a total of 172 burden
                                                institutions’’ (Full-time enrollment of                 burden, the Department provides the
                                                                                                                                                              hours eliminated.
                                                500 or less for a two-year institution or               general public and Federal agencies
                                                                                                        with an opportunity to comment on                        Public Institutions—78 respondents
                                                less than two-year institution and 1,000                                                                      for a total of 283 burden hours
                                                or less for four-year institutions) in each             proposed or continuing, or the
                                                                                                        discontinuance of, collections of                     eliminated.
                                                sector (Docket ID ED–2018–OPE–0027)
                                                to certify the RFA impacts of these                     information in accordance with the                    1845–0122—Gainful Employment
                                                proposed regulations. Using this                        Paperwork Reduction Act of 1995 (PRA)                 Program—Subpart Q—Appeals for Debt
                                                definition, there are 2,816 title IV                    (44 U.S.C. 3506(c)(2)(A)). This helps                 to Earnings Rates
                                                institutions that qualify as small entities             ensure that: The public understands the
                                                                                                        Department’s collection instructions,                    For Profit Institutions—388
                                                based on 2015–2016 12-month                                                                                   respondents for a total of 23,377 burden
                                                enrollment.                                             respondents can provide the requested
                                                                                                        data in the desired format, reporting                 hours eliminated.
                                                   When an agency issues a rulemaking                   burden (time and financial resources) is                 Private Non Profit Institutions—6
                                                proposal, the RFA requires the agency to                minimized, collection instruments are                 respondents for a total of 362 burden
                                                ‘‘prepare and make available for public                 clearly understood, and the Department                hours eliminated.
                                                comment an initial regulatory flexibility               can properly assess the impact of                        Public Institutions—2 respondents for
                                                analysis’’ which will ‘‘describe the                    collection requirements on respondents.               a total of 121 burden hours eliminated.
                                                impact of the proposed rule on small                    Respondents also have the opportunity
                                                entities.’’ (5 U.S.C. 603(a)). Section 605                                                                    1845–0123—Gainful Employment
                                                                                                        to comment on our burden reduction                    Program—Subpart Q—Regulations
                                                of the RFA allows an agency to certify                  estimates.
                                                a rule, in lieu of preparing an analysis,                 A Federal agency may not conduct or                    Individuals—11,793,035 respondents
                                                if the proposed rulemaking is not                       sponsor a collection of information                   for a total of 1,050,857 burden hours
                                                expected to have a significant economic                 unless OMB approves the collection                    eliminated.
                                                impact on a substantial number of small                 under the PRA and the corresponding                      For Profit Institutions—28,018,705
                                                entities.                                               information collection instrument                     respondents for a total of 2,017,100
                                                   The proposed regulations directly                    displays a currently valid OMB control                burden hours eliminated.
                                                affect all institutions with GE programs                number. Notwithstanding any other                        Private Non Profit Institutions—
                                                participating in title IV aid. There were               provision of law, no person is required               442,348 respondents for a total of 76,032
                                                2,617 institutions in the 2015 GE cohort,               to comply with, or is subject to penalty              burden hours eliminated.
                                                of which 1,357 are small entities. This                 for failure to comply with, a collection                 Public Institutions—2,049,488
                                                represents approximately 20 percent of                  of information if the collection                      respondents for a total of 633,963
                                                all title IV-participating institutions and             instrument does not display a currently               burden hours eliminated.
                                                48 percent of all small institutions.                   valid OMB control number.                                The total burden hours and proposed
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                                                Therefore, the Department has                             The proposed regulations would                      change in burden hours associated with
                                                determined that the proposed                            rescind the GE regulations. That action               each OMB Control number affected by
                                                regulations would not have a significant                would eliminate the burden as assessed                the proposed regulations follows:




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                                                40182                          Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules

                                                                                                                                                                                                                                               Estimated cost
                                                                                                                                                                                                                                                 $36.55/hour
                                                                                                                                                                                                      OMB control
                                                                                                         Regulatory section                                                                                                     Burden hours   for institutions;
                                                                                                                                                                                                         No.                                     $16.30/hour
                                                                                                                                                                                                                                                for individuals

                                                § 668.412 .....................................................................................................................................            1845–0107             ¥3,118,160    ¥$91,364,240
                                                §§ 668.504, 668.509, 668.510, 668.511, 668.512 .......................................................................                                     1845–0121                ¥5,656        ¥206,727
                                                § 668.406 .....................................................................................................................................            1845–0122               ¥23,860        ¥872,083
                                                §§ 668.405, 668.410, 668.411, 668.413, 668.414 .......................................................................                                     1845–0123             ¥3,777,952    ¥116,804,291

                                                      Total ......................................................................................................................................   ........................    ¥6,925,628    ¥209,247,341



                                                  We have prepared Information                                              whether the proposed regulations would                                         Dated: August 9, 2018.
                                                Collection Requests which will be filed                                     require transmission of information that                                     Betsy DeVos,
                                                upon the effective date of these                                            any other agency or authority of the                                         Secretary of Education.
                                                proposed regulations to discontinue the                                     United States gathers or makes
                                                currently approved information                                              available.                                                                     For the reasons discussed in the
                                                collections noted above.                                                      Accessible Format: Individuals with                                        preamble, and under the authority at 20
                                                                                                                            disabilities can obtain this document in                                     U.S.C. 3474 and 20 U.S.C. 1221e–3, the
                                                  Note: The Office of Information and                                                                                                                    Secretary of Education proposes to
                                                Regulatory Affairs in OMB and the                                           an accessible format (e.g., Braille, large
                                                Department review all comments posted at                                    print, audiotape, or compact disc) on                                        amend parts 600 and 668 of title 34 of
                                                www.regulations.gov.                                                        request to the person listed under FOR                                       the Code of Federal Regulations as
                                                                                                                            FURTHER INFORMATION CONTACT.
                                                                                                                                                                                                         follows:
                                                  We consider your comments on
                                                discontinuing these collections of                                            Electronic Access to This Document:                                        PART 600—INSTITUTIONAL
                                                information in—                                                             The official version of this document is                                     ELIGIBILITY UNDER THE HIGHER
                                                  • Evaluating the accuracy of our                                          the document published in the Federal                                        EDUCATION ACT OF 1965, AS
                                                estimate of the burden reduction of the                                     Register. You may access the official                                        AMENDED
                                                proposed discontinuance, including the                                      edition of the Federal Register and the
                                                validity of our methodology and                                             Code of Federal Regulations via the                                          ■ 1. The authority citation for part 600
                                                assumptions;                                                                Federal Digital System at: www.gpo.gov/                                      continues to read as follows:
                                                  • Enhancing the quality, usefulness,                                      fdsys. At this site you can view this
                                                                                                                                                                                                           Authority: 20 U.S.C. 1001, 1002, 1003,
                                                and clarity of the information we                                           document, as well as all other                                               1088, 1091, 1094, 1099b, and 1099c, unless
                                                collect; and                                                                documents of this Department                                                 otherwise noted.
                                                  • Minimizing the burden on those                                          published in the Federal Register, in
                                                who must respond. This includes                                             text or Portable Document Format                                             ■ 2. Section 600.10 is amended by
                                                exploring the use of appropriate                                            (PDF). To use PDF you must have                                              revising paragraphs (c)(1) and (2) to read
                                                automated, electronic, mechanical, or                                       Adobe Acrobat Reader, which is                                               as follows:
                                                other technological collection                                              available free at the site.                                                  § 600.10 Date, extent, duration, and
                                                techniques.                                                                   You may also access documents of the                                       consequence of eligibility.
                                                  OMB is required to make a decision                                        Department published in the Federal
                                                concerning the collections of                                                                                                                            *      *     *     *    *
                                                                                                                            Register by using the article search                                           (c) * * *
                                                information contained in these                                              feature at: www.federalregister.gov.                                           (1) An eligible institution that seeks to
                                                proposed regulations between 30 and 60                                      Specifically, through the advanced                                           establish the eligibility of an
                                                days after publication of this document                                     search feature at this site, you can limit                                   educational program must—
                                                in the Federal Register. Therefore, to                                      your search to documents published by                                          (i) Pursuant to a requirement
                                                ensure that OMB gives your comments                                         the Department. (Catalog of Federal                                          regarding additional programs included
                                                full consideration, it is important that                                    Domestic Assistance Number does not                                          in the institution’s program
                                                OMB receives your comments on these                                         apply.)                                                                      participation agreement under 34 CFR
                                                Information Collection Requests by
                                                                                                                            List of Subjects                                                             668.14, obtain the Secretary’s approval;
                                                September 13, 2018. This does not affect
                                                                                                                                                                                                           (ii) For a direct assessment program
                                                the deadline for your comments to us on                                     34 CFR Part 600                                                              under 34 CFR 668.10, and for a
                                                the proposed regulations.
                                                  If your comments relate to the                                              Colleges and universities, Foreign                                         comprehensive transition and
                                                Information Collection Requests for                                         relations, Grant programs-education,                                         postsecondary program under 34 CFR
                                                these proposed regulations, please                                          Loan programs-education, Reporting                                           668.232, obtain the Secretary’s approval;
                                                indicate ‘‘Information Collection                                           and recordkeeping requirements,                                              and
                                                Comments’’ on the top of your                                               Selective Service System, Student aid,                                         (iii) For an undergraduate program
                                                comments.                                                                   Vocational education.                                                        that is at least 300 clock hours but less
                                                                                                                                                                                                         than 600 clock hours and does not
                                                Intergovernmental Review                                                    34 CFR Part 668                                                              admit as regular students only persons
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                                                  These programs are not subject to                                           Administrative practice and                                                who have completed the equivalent of
                                                Executive Order 12372 and the                                               procedure, Aliens, Colleges and                                              an associate degree under 34 CFR
                                                regulations in 34 CFR part 79.                                              universities, Consumer protection,                                           668.8(d)(3), obtain the Secretary’s
                                                                                                                            Grant programs-education, Loan                                               approval.
                                                Assessment of Educational Impact                                            programs-education, Reporting and                                              (2) Except as provided under
                                                  In accordance with section 411 of                                         recordkeeping requirements, Selective                                        § 600.20(c), an eligible institution does
                                                GEPA, 20 U.S.C. 1221e–4, the Secretary                                      Service System, Student aid, Vocational                                      not have to obtain the Secretary’s
                                                particularly requests comments on                                           education.                                                                   approval to establish the eligibility of


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                                                                       Federal Register / Vol. 83, No. 157 / Tuesday, August 14, 2018 / Proposed Rules                                                  40183

                                                any program that is not described in                    SUMMARY:   The Commission is noticing                 which set forth a standard to determine
                                                paragraph (c)(1) of this section.                       the partial rescindment of a previously               when mail preparation changes require
                                                *     *    *     *      *                               proposed rule. This notice informs the                compliance with the Commission’s
                                                ■ 3. Section 600.21 is amended by                       public of the docket’s reinstatement,                 price cap rules.2 Under § 3010.23(d)(2),
                                                revising the paragraph (a)(11)                          invites public comment, and takes other               the Postal Service must make reasonable
                                                introductory text to read as follows:                   administrative steps.                                 adjustments to its billing determinants
                                                                                                        DATES: Comments are due on or before                  to account for the effects of
                                                § 600.21    Updating application information.           September 13, 2018.                                   classification changes that result in the
                                                  (a) * * *                                             ADDRESSES: Submit comments                            introduction, deletion, or redefinition of
                                                  (11) For any program that is required                 electronically via the Commission’s                   rate cells. The standard established by
                                                to provide training that prepares a                     Filing Online system at http://                       the Commission in Order No. 3047
                                                student for gainful employment in a                     www.prc.gov. Those who cannot submit                  provided that mail preparation changes
                                                recognized occupation—                                  comments electronically should contact                could have rate effects when they
                                                *     *    *     *     *                                the person identified in the FOR FURTHER              resulted in the deletion or redefinition
                                                                                                        INFORMATION CONTACT section by                        of rate cells as set forth by
                                                PART 668—STUDENT ASSISTANCE                             telephone for advice on filing                        § 3010.23(d)(2). Order No. 3047 at 59. In
                                                GENERAL PROVISIONS                                      alternatives.                                         conjunction with Order No. 3047, the
                                                                                                                                                              Commission initiated a separate
                                                ■ 4. The authority citation for part 668                FOR FURTHER INFORMATION CONTACT:
                                                                                                                                                              rulemaking proceeding in this docket to
                                                continues to read as follows:                           David A. Trissell, General Counsel, at                develop a procedural rule that would
                                                  Authority: 20 U.S.C. 1001–1003, 1070g,                202–789–6820.                                         ensure the Postal Service properly
                                                1085, 1088, 1091, 1092, 1094, 1099c, and                SUPPLEMENTARY INFORMATION:                            accounted for the rate effects of mail
                                                1099c–1, unless otherwise noted.                                                                              preparation changes ‘‘in accordance
                                                                                                        Table of Contents
                                                § 668.6    [Removed and Reserved]                                                                             with the Commission’s standard
                                                                                                        I. Introduction
                                                                                                                                                              articulated in Order No. 3047.’’ 3
                                                ■ 5. Remove and reserve § 668.6.                        II. Background
                                                                                                                                                                 While the rulemaking was pending,
                                                ■ 6. Section 668.8 is amended by                        III. Description of the Proposed Rule
                                                                                                        IV. Comments Requested                                the Postal Service requested the
                                                revising paragraphs (d)(2)(iii) and                                                                           Commission reconsider the standard set
                                                (d)(3)(iii) to read as follows:                         I. Introduction                                       forth in Order No. 3047. In response, the
                                                § 668.8    Eligible program.                               The Commission initiates this notice               Commission issued Order No. 3441
                                                *      *    *     *     *                               of proposed rulemaking (NPR) to                       resolving the request for reconsideration
                                                  (d) * * *                                             partially rescind the rule concerning                 and maintaining the standard
                                                  (2) * * *                                             procedures for mail preparation changes               articulated in Order No. 3047.4 The
                                                  (iii) Provide training that prepares a                in response to the recent decision in                 Postal Service petitioned the Court for
                                                student for gainful employment in a                     United States Postal Serv. v. Postal Reg.             review of the revised standard set forth
                                                recognized occupation; and                              Comm’n, 886 F.3d 1253 (D.C. Cir. 2018).               in Order Nos. 3047 and 3441.5
                                                  (3) * * *                                                                                                      During the pendency of the appellate
                                                                                                        II. Background                                        proceedings, the Commission issued
                                                  (iii) Provide undergraduate training
                                                that prepares a student for gainful                        In Docket No. R2013–10R, the                       Order No. 4393 in this docket, adopting
                                                employment in a recognized                              Commission determined that a change                   a final procedural rule concerning mail
                                                occupation;                                             to the Intelligent Mail Barcoding (IMb)               preparation changes.6 The final rule
                                                                                                        requirements constituted a change in                  institutes publication requirements for
                                                *      *    *     *     *                               rates requiring compliance with the                   changes to mail preparation rules and
                                                Subpart Q—[Removed and Reserved]                        price cap under 39 U.S.C. 3622.1 The                  requires the Postal Service to (1)
                                                                                                        Postal Service appealed the                           affirmatively designate whether or not a
                                                ■ 7. Remove and reserve subpart Q,                      Commission’s determination to the                     change to a mail preparation
                                                consisting of §§ 668.401 through                        United States Court of Appeals for the
                                                668.415.                                                District of Columbia (the Court). In                     2 Docket No. R2013–10R, Order Resolving Issues

                                                                                                        United States Postal Serv. v. Postal Reg.             on Remand, January 22, 2016 (Order No. 3047).
                                                                                                                                                                 3 Notice of Proposed Rulemaking on Motions
                                                Subpart R—[Removed and Reserved]                        Comm’n, 785 F.3d 740, 751 (D.C. Cir.                  Concerning Mail Preparation Changes, January 22,
                                                ■ 8. Remove and reserve subpart R,                      2015), the Court found that ‘‘changes in              2016, at 1–2 (Order No. 3048). The Notice of
                                                consisting of §§ 668.500 through                        rates’’ under 39 U.S.C. 3622 could                    Proposed Rulemaking on Motions Concerning Mail
                                                                                                        include changes to mail preparation                   Preparation Changes was published in the Federal
                                                668.516.                                                                                                      Register on February 1, 2016. See 81 FR 5085
                                                                                                        requirements and were not limited to                  (February 1, 2016).
                                                [FR Doc. 2018–17531 Filed 8–10–18; 4:15 pm]
                                                                                                        ‘‘only changes to the official posted                    4 Docket No. R2013–10R, Order Resolving Motion
                                                BILLING CODE 4000–01–P
                                                                                                        prices of each product.’’ Id. However,                for Reconsideration of Commission Order No. 3047,
                                                                                                        the Court remanded the matter to the                  July 20, 2016 (Order No. 3441).
                                                                                                                                                                 5 Petition for Review, United States Postal Serv.
                                                                                                        Commission so that it could articulate
                                                POSTAL REGULATORY COMMISSION                                                                                  v. Postal Reg. Comm’n, 886 F.3d 1253 (D.C. Cir.
                                                                                                        an intelligible standard to determine                 2018).
                                                                                                        when mail preparation requirement                        6 Order Adopting Final Procedural Rule for Mail
                                                39 CFR Part 3010
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                                                                                                        changes constitute changes in rates                   Preparation Changes, January 25, 2018, at 22–23
                                                [Docket No. RM2016–6; Order No. 4751]                   subject to the price cap. Id. at 744.                 (Order No. 4393). The Order Adopting Final
                                                                                                           In response to the Court’s remand, the             Procedural Rule for Mail Preparation Changes was
                                                                                                                                                              published in the Federal Register on March 5, 2018.
                                                Motions Concerning Mail Preparation                     Commission issued Order No. 3047,                     See 83 FR 4585 (March 5, 2018). See also Revised
                                                Changes                                                                                                       Notice of Proposed Rulemaking, March 27, 2017
                                                                                                          1 Docket No. R2013–10, Order on Price               (Order No. 3827). The Revised Notice of Proposed
                                                AGENCY:  Postal Regulatory Commission.                  Adjustments for Market Dominant Products and          Rulemaking was published in the Federal Register
                                                ACTION: Proposed rulemaking.                            Related Mail Classification Changes, November 21,     on March 31, 2017. See 82 FR 16015 (March 31,
                                                                                                        2013, at 5–35 (Order No. 1890).                       2017).



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Document Created: 2018-08-14 02:18:28
Document Modified: 2018-08-14 02:18:28
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionNotice of proposed rulemaking.
DatesWe must receive your comments on or before September 13, 2018.
ContactScott Filter, U.S. Department of Education, 400 Maryland Ave. SW, Room 290-42, Washington, DC 20024. Telephone: (202) 453-7249. Email: [email protected]
FR Citation83 FR 40167 
RIN Number1840-AD31
CFR Citation34 CFR 600
34 CFR 668
CFR AssociatedColleges and Universities; Foreign Relations; Grant Programs-Education; Loan Programs-Education; Reporting and Recordkeeping Requirements; Selective Service System; Student Aid; Vocational Education; Administrative Practice and Procedure; Aliens and Consumer Protection

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