Effective July 1, 2024, institutions of higher education participating in Title IV Federal Student Aid programs must comply with the U.S. Department of Education’s (Department) Financial Value Transparency and Gainful Employment regulation (Final Rule).
The Final Rule has two significant components. First, the Final Rule advances a new Financial Value Transparency policy intended to provide prospective students with consumer-minded data about important financial outcomes for individuals who complete Title IV programs. Second, the Final Rule establishes an accountability framework that sets minimum thresholds for each Title IV Program around financial outcomes of program completers, along with consequences for institutions who fail to meet those minimum thresholds; for Gainful Employment Programs, those consequences include the loss of Title IV eligibility.
Because most institutions of higher education participate in Title IV, the burdensome requirements of the Final Rule will apply in some manner to nearly all public, non-profit, and proprietary colleges and universities. To assist you in understanding how your institution may be impacted—and what you need to do now to prepare for compliance–we provide a high-level overview of the Final Rule below, as well as specific steps your institution should consider down the long and winding road to prepare for these new requirements.
To which programs does the Final Rule apply?
The Financial Value Transparency and Gainful Employment Final Rule applies to all programs participating in Title IV, with a few exceptions. Programs are classified as either GE programs or eligible non-GE programs, which are broadly explained in the below chart.
In other words, GE programs include all Title IV non-degree programs at public and private non-profit institutions (commonly known as certificate or similar types of programs), as well as all Title IV Programs (including degree and non-degree programs) at proprietary institutions. Non-GE programs include all degree programs at public and private non-profit institutions. Note that public and private non-profit institutions may have both GE programs and non-GE programs.
Based on these classifications, the Final Rule will impose on institutions: (a) burdensome data reporting requirements for all Title IV programs; (b) performance thresholds and consequences for failing to meet those thresholds, for most Title IV programs; and (c) a potential loss of Title IV eligibility for failing to meet performance thresholds over a period of time, for GE programs, exclusively. These requirements and impacts are explained more below.
Financial Value Transparency: metrics, thresholds, and consequences
To increase transparency regarding higher education cost, financial aid, and outcomes for prospective students considering Title IV programs, the Final Rules seek to provide new consumer-minded information about the financial outcomes of individuals who complete a Title IV program. In particular, the Department establishes new Debt-to-Earnings ratios (D/E rates), both annual and discretionary D/E rates, and an Earnings Premium measure (EP measure) as measures of financial outcomes that prospective students and their families should consider in evaluating whether to pursue a particular educational program. The Department will generally calculate these metrics for each Title IV program annually, based on information about eligible program completers obtained from the institution, matched against data reflecting the earnings of those program completers obtained from a yet-to-be-named agency. Notably, the Department has committed to publishing each Title IV program’s annual D/E rates and EP measure on a new Department website beginning July 1, 2026.
In addition to establishing these new metrics and a website to house this information for the public, the Final Rule establishes “passing” thresholds. Also beginning July 1, 2026, all graduate…
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