Gainful Employment Rule Alternate Earnings Appeal: New Deadlines and Process Announced

Duane Morris LLP.

On August 17, 2017, the U.S. Department of Education announced changes to the gainful employment (GE) rule’s alternate earnings deadlines and appeal process. The announcement is in response to the recent District of Columbia Court decision in American Association of Cosmetology Schools v. DeVos that required the Department of Education to review the alternate earnings appeal requirements for cosmetology programs. (Duane Morris LLP serves as counsel to AACS in this litigation. Read the memorandum and the opinion.)

The Department undertook a comprehensive review of the process and chose to expand the new requirements beyond cosmetology programs to all GE programs subject to the GE regulations in 34 CFR 668. The guidance also establishes new deadlines for submitting notices of intent to file alternate earnings appeals and for submitting alternate earnings appeals. Further, the Department has modified the threshold requirements for the alternate earnings appeals:

• Institutions that have already submitted a notice of intent to file an alternate earnings appeal, or an alternate earnings appeal, do not have to resubmit those items or amend their alternate earnings appeal in connection with the modified submission requirements described below.
• Institutions that wish to supplement an alternate earnings appeal that has already been submitted may do so, and should contact Department staff to make those arrangements on or before October 6, 2017.
• All institutions, including those that did not previously submit a notice of intent to file an alternate earnings appeal, may submit a notice of intent to appeal and an appeal.

New Deadlines

October 6, 2017—Deadline to file a notice of intent to file an alternate earnings appeal

February 1, 2018—Deadline to file an alternate earnings appeal

Process

Graduate Surveys

For alternate earnings appeals based on a graduate survey, the Department will not enforce §668.406(b)(3) or (c) to the extent these provisions require that a graduate survey contain responses from all students that are not exempted under §668.404(e), nor will the Department require a 50 percent threshold response rate.

In evaluating the alternate earnings appeal, the Department will evaluate all graduate surveys, regardless of response rate, provided the submissions include the number of responses, the response rate and a nonresponse bias analysis, as well as any other information the Department requests.

For alternate earnings appeals based on data from state-sponsored data systems, the Department will consider the validity of appeals using state-sponsored data on a case-by-case basis, taking into account the response rate and other information requested by the Secretary. The Department will not require a 50 percent threshold be met, or the earnings of 30 students to be included, before the Department will consider the appeal.

Student Warnings

Institutions intending to file a notice of intent to appeal do not have to issue warnings to students unless they fail to timely submit an alternate earnings appeal or the appeal is resolved.

Certifications and Attestations

Institutions must still submit the certifications and attestations required by §668.406(c)(2) and (d)(3). Section 668.406(c)(2) requires a certification signed by the institution’s chief executive officer attesting that the survey was conducted in accordance with the survey standards in the Earnings Survey Form and that the mean or median earnings used to recalculate the Department rates were accurately determined from the survey results, with an attestation by an independent public accountant or independent governmental auditor. Section 668.406(d)(3) requires a certification signed by the institution’s chief executive officer attesting that it accurately used the state-provided earnings data to recalculate the Department rates.

Comments

The Department also invites public comments on this action and notes that they will consider all comments in determining whether to take any future action in connection with the upcoming negotiated rulemaking. Comments may be submitted through the Federal eRulemaking Portal at www.regulations.gov or via U.S. mail, commercial delivery or hand delivery to:

Scott Filter
U.S. Department of Education
400 Maryland Ave. SW, room 6W253
Washington, DC 20202

Comments should include the Docket ID ED-2017-OPE-0090.

Duane Morris Recommendations

The new guidelines provide all institutions an opportunity to appeal the earnings data for their GE programs. Institutions with failing or zone programs that have a reasonable basis for believing their earnings data is inaccurate should file a notice of intent to appeal by the deadline. The notice of intent to appeal stays the student warning requirements and allows institutions time to evaluate the new process and attempt to establish a qualified earnings appeal.

For Further Information

If you have any questions, please contact any of the attorneys in the Higher Education Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm’s full disclaimer.