Biden Administration Continues To Move Ahead With Implementation of Financial Value Transparency and Gainful Employment Regulations
Overview
With less than three weeks remaining in the Biden-Harris Administration, the Department of Education continues to forge ahead on key Administration priorities.
On Monday, CSPEN sent out a “Breaking News” email notifying the community of the publication of a new Final Rule (public-inspection.federalregister.gov/2024-31031.pdf) stemming from the 2023-2024 Federal Negotiated Rulemaking. That email is being shared with the community once again today, as we received over 2,000 “out of office” notices given the unique timing of the release on New Year’s Eve eve. Please see below.
Today, we are notifying the community of new guidance related to the Financial Value Transparency and Gainful Employment regulation which the Department released through a Federal Register notice day before yesterday, December 31, 2024.
The notice (www.federalregister.gov/documents/2024/12/31/2024-31271/financial-value-transparency-and-gainful-employment-earnings-thresholds-for-calculation-year-2024), entitled “Financial Value Transparency and Gainful Employment: Earnings Thresholds for Calculation Year 2024” provides state-by-state annual earnings thresholds which are to be used to calculate the earnings premium metric which seeks to compare the median annual earnings of students completing an educational program at an eligible institution to a specified earnings threshold.
As published in the notice:
“This earnings threshold, as defined in 34 CFR 668.2, is based on data from the U.S. Census Bureau and is calculated as the median earnings for working adults aged 25-34 who either worked during the year or indicated they were unemployed when interviewed, with only a high school diploma (or recognized equivalent) in (1) the State in which the institution is located or (2) nationally, if fewer than 50 percent of the students in the program are from the State where the institution is located, or if the institution is a foreign institution. Under 34 CFR 668.404(a), the Secretary uses the appropriate earnings threshold under the definition to determine if an educational program passes the EP measure. A program passes the EP measure by demonstrating that the median earnings for program graduates exceed the appropriate State or national earnings threshold.”
CSPEN Quick Analysis
The median earnings for working adults, as defined above, for each state varies considerably, with Mississippi having the lowest earnings threshold at $27,326 and New Hampshire having the highest at $37,850. The national average is stated to be $31,269.
Quick math shows that there is a delta between the outliers of NH and MS of $10,524. Thirty-one states (including the District of Columbia) have thresholds that exceed the national average, with twenty state having thresholds below the national average.
To try and put this information in context to other national earnings data, CSPEN reviewed the most recent “Usual Weekly Earnings of Wage and Salary Workers” and found an October 17, 2024 press release which among other data stated, “Median weekly earnings of the nation’s 120.8 million full-time wage and salary workers were $1,165 in the third quarter of 2024.” Wage and salary workers are defined as “workers who receive wages, salaries, commissions, tips, payment in kind, or piece rates. The group includes employees in both the private and public sectors but, for the purposes of the earnings series, it excludes all self-employed people, both those with incorporated businesses and those with unincorporated businesses.”
Extrapolating the most recent information available, it appears that the median national annual earnings for full-time wage and salary workers is somewhere around $60,580. Or, stated another way, appears to be approximately $29,284 more than the median annual earnings for workers aged 25-34 who either worked during the year or indicated they were unemployed when interviewed with only a high school diploma (or recognized equivalent).
Admittedly, the data is not an apples to apples comparison by any stretch of the imagination. But the numbers are supposed to tell everyone a story, but what story and is it an accurate story? We honestly aren’t sure yet, but we think there are a lot of things to try and unpack based upon this latest addition to the FVT/GE rollout.
We didn’t have time to do more analysis, but we will have more to look at by the time we have our first CSPEN Federal Legislative & Regulatory Update webinar next Thursday.
Monday’s Breaking News Email
In an official announcement (www.ed.gov/about/news/press-release/us-department-of-education-releases-final-rules-improve-distance-education-reporting) released earlier today, December 30, 2024, the U.S. Department of Education announced the release of Final Rules on portions of the 2023-2024 Federal Negotiated Rulemaking – Program Integrity and Institutional Quality deliberations. As stated in the press release, the Department has submitted to the Federal Register a package of regulatory revisions (public-inspection.federalregister.gov/2024-31031.pdf) on Distance Education requirements, Federal Return of Tile IV Funds (R2T4) calculations, and eligibility requirements for Federal TRIO program funds. The Federal Register will review the regulations and publish them officially on Friday, January 3, 2025.
The Department summarized the Final Rules on each topic as follows:
Distance Education
The Department’s Final Rule improves reporting on distance education and correspondence courses. “Starting July 1, 2027, the final rules require institutions to report information into the National Student Loan Data System (NSLDS) about which students who received Federal financial aid are enrolled in distance education or correspondence courses. These data will help the Department better understand the outcomes and effectiveness of online learning.”
The Department continues, “collecting information on students in distance education courses through NSLDS received greater support from institutions than a second way to get this information proposed in the draft rules. Accordingly, the Department is not moving forward with that second proposal, which would have required institutions to report all of their fully online programs at a virtual additional location. By setting the implementation date for NSLDS reporting in 2027, the Department is also providing schools the time needed to comply with this requirement.”
The Department’s release also states, ”the Department is not at this time moving forward with a proposal to disallow the offering of asynchronous clock-hour programs through distance education. However, we remind institutions that asynchronous clock hours cannot be used for homework and that there must be robust verification of regular and substantive interaction with an instructor.”
(NOTE: While the reporting requirements will not go into effect until 2027, the changes with respect to the other revisions to distance education requirements, as well as the R2T4 and TRIO program changes will go into effect July 1, 2026.)
R2T4
The Department says, “rules related to the Return of Title IV Funds (R2T4) when a student withdraws, meanwhile, increase the accuracy and simplicity of performing R2T4 calculations; address unique circumstances for what constitutes a withdrawal; and codify longstanding policies into regulation. In particular, they create a new optional process for institutions to avoid conducting R2T4 calculations when they treat the student as never having been enrolled, when certain conditions are met. They also allow for flexibilities to schools leave of absence policies in order to increase retention for students who are incarcerated that have unforeseen interruptions to their eligible prison education programs.”
There is a cavate contained within this portion of the Final Rule. As noted in the release, “the Department is giving institutions the option to early implement the withdrawal exemption leave of absence modifications for students who are incarcerated starting in 30 days.”
TRIO
Under TRIO, the Final Rule “adjusts the eligibility for Federal TRIO programs, allow borrowers who never began attendance to repay amounts owed as a loan instead of a lump sum, and require online programs to take attendance.”
What’s Next
CSPEN is very pleased to see that the Department took to heart the comments shared by many interested parties regarding concerns with portions of the distance education proposal which were contested throughout the actual negotiations but were still contained within the Notice of Proposed Rulemaking. The Department acknowledged the public comments in the release as well, sharing that “the Department refined these final rules based upon extensive public comment on a notice of proposed rulemaking.” Concluding, that in consideration of the comments, “the Department decided to not move forward with a number of provisions in the draft rule to allow for greater additional study and consideration.”
CSPEN is already in the process of developing a comprehensive review of the Final Rule package and will share the details with the community on next week’s CSPEN Federal Legislative & Regulatory Update webinar along with a great deal of other information to catch you up on with the conclusion of the 118th Congress and planning already underway for the beginning of the 118th Congress.
