New Guidance Issued on Financial Value Transparency and Gainful Employment Regulations
Highlights
- The U.S. Department of Education issued a Dear Colleague Letter, as well as a new FAQs page, regarding new Financial Value Transparency (FVT) and Gainful Employment (GE) regulations that will go into effect on July 1, 2024.
- The new regulations apply to most Title IV-eligible programs and impose substantial disclosure and reporting obligations.
- The summary includes compliance guidance, reporting deadlines and limited exclusions for certain institutions, programs and students. Additional federal guidance will be posted on a regular basis to the new FAQ page.
The U.S. Department of Education (Department) released an important update and reminder regarding new Financial Value Transparency (FVT) and Gainful Employment (GE) regulations that take effect on July 1, 2024. The Department's update comes in the form of a Dear Colleague Letter (DCL) issued on March 29, 2024, and includes an overview of the regulations and an update on the timing for implementation.
The New FVT/GE Regulations
For a detailed analysis of FVT/GE regulations, see Holland & Knight's previous alert, "New Gainful Employment Rules Impact For-Profit and Nonprofit Colleges and Universities," Oct. 17, 2023. Designed to help students assess the financial value of their programs, the new regulations impose substantial disclosure and reporting obligations on most Title IV-eligible programs that will require significant changes in financial aid compliance operations for institutions. Institutions will be required to report significant information around individual students, program length and cost, and institutional and private loans.
The Department will use the data it collects to calculate certain metrics – a debt-to-earnings metric and an earnings premium metric – designed to measure the financial outcomes of the program. Programs that do not satisfy those metrics will be classified as either "high debt" or "low earnings," and institutions will be required to disclose those classifications publicly and have students acknowledge the classifications prior to enrollment. In addition, certain programs – specifically, all programs at for-profit institutions and nondegree programs at nonprofit or public schools – may lose Title IV eligibility.
The March 29 DCL provides a helpful summary of key compliance elements, including the information that must be reported annually, and also identifies the categories of institutions, programs and students that are excluded from compliance obligations. Of particular note, the initial reporting deadline is Oct. 1, 2024, although the specific requirements for student warnings and acknowledgements and the Department's disclosure website will not be effective until July 1, 2026.
Additional Resources
The Department also opened a FVT/GE topics page and FAQs section on April 5. The FAQs provide useful operational guidance on implementing the regulations and evaluating program performance. They are organized by topic and will be updated periodically by the Department with additional guidance.
These are uncharted and complex issues to navigate, with all too real administrative and risk management implications. For help understanding and complying with the regulations, contact the authors or another member of Holland & Knight's Education Team.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.