GAINFUL EMPLOYMENT DEBT-TO-EARNINGS RATES

On January 9, 2017, the U.S. Department of Education released final 2015 Gainful Employment Debt-to-Earnings rates. Two D/E rates, the Annual Earnings Rate and the Discretionary Income Rate, are calculated for each program as a measure of the ability of program completers to reasonably repay the educational debt incurred for their attendance in the program.
 
For the Annual Earnings Rate, the numerator is the calculated annual loan payment amount– an estimate of the annual loan repayment amount based on the median educational debt of the members of the cohort.  The denominator is the higher of the cohort’s mean or median earnings obtained from the Social Security Administration.
 
The Discretionary Income Rate uses the same annual loan payment amount in the numerator as the Annual Earnings Rate but the denominator is the higher of the mean or median earnings minus 150% of the poverty guideline.
 
Annual Earnings Rates of less than or equal to 8% are considered passing rates.  Annual Earnings Rates greater than 8% but less than or equal to 12% are zone rates, and Annual Earnings Rates greater than 12% are failing rates.
 
For the Discretionary Income Rate, rates less than or equal to 20% are passing rates, rates greater than 20% but less than or equal to 30% are zone rates, and rates greater than 30% are failing rates.
 
Institutions with programs that were in the zone or failing can submit alternate earnings appeal if the use of alternate earnings would improve a zone program to passing or a failing program to either passing or zone.  Institutions seeking to appeal a zone or failing rate were required to email a Notice of Intent to appeal within 14 days of the issuance of Final D/E rates, on or before Monday, January 23, 2017 and have until March 10th to submit supporting data to ED.
 
According to public records released by the FSA Data Center, more than 200 schools have notified ED of their intent to appeal at least one program’s GE D/E rates.
 
These numbers of course, don’t really tell the whole story. The majority of schools and colleges with GE programs failing or in the zone haven’t indicated their intent to appeal the department’s determinations. In fact, according to FSA public data, these 200 schools and colleges represent only about 30% of programs that are in the zone or failing. In other words, more than 70% of affected programs aren’t being appealed. 
 
Out of 1813 programs failing or in the zone, only 536 programs are pending appeal.
 
Combined Zone/Failing Programs:
1813 Total Programs | 536 Under Appeal | 70.44% did not appeal
 
Zone Programs:
1010 Total Programs | 247 Under Appeal | 75.55% did not appeal
 
Failing Programs:
803 Total Programs | 289 Under Appeal | 64% did not appeal